The last SGND's mandate went from the end of 2000 to the end of 2004. The customer's company was founded in 1983 and was initially offering custom applications development and this until 1997-1998. These were the years where the first VC's investments were made.
Then a new Business Plan was developed. The main items of this Plan are shown in Table 1 hereafter.
TABLE 1
| BUSINESS PLAN ITEMS | BUSINESS PLAN DECISIONS OR FOCUS |
|---|---|
| Company's Business Sector | Software Developer |
| Business Sector Targeted | Consumer's Goods |
| Geography | USA, Western Europe, Canada |
| Software Suite | Sales Force Automation and Promotion Management |
| Size of Targets Clients | More than 300 Millions usd per Year |
| Revenues' Model | Licenses, maintenance and Implementation |
| Sale Model | Direct |
Massive investments were made in R&D and this contributed to major progresses and leaps forward in the products' functionalities and technology. Massive investments were also made to penetrate the US market that resulted in major cash shortage and major debts for the organization, this at the end of Fiscal 2000 (August).
At this point, the Board of Directors (BOD) and the VCs decided to mandate SGND for three months in order to Assess the situation (Diagnostic) and prepare a preliminary Plan of actions. They were satisfied with the outcome and they extended the contract for an additional 2 months in order to refine the Plan of actions. See Table 2.
Following this, an additional 3 months was signed in order for Mr. Drouin to star the Execution of the Plan and also in order to conclude an annual contract with SGND. The permanent annual contract for Mr. Drouin was to be the President and Chief Operating Officer and acting Chief Executive Officer.
TABLE 2
| ANALYSIS-DIAGNOSTIC | PLAN OF ACTIONS |
|---|---|
| Top 5 Financial Ratios under the Company's bankers requirements | Raise Equity Financing |
| Top 20 Operational Ratios under the Industry Standard ratios | Reduce HR cost by 20% |
| US sales practically non existent | Hire US Sales Executive in NY area |
| Marketing next to nothing | Budget multiply by 5 |
| No Industry Analysts coverage | Appoint an internal coordinator for Gartner-Forrester |
| No official involvement from the industry/clients to the company evolution | Created an external Advisory Committee and a Users' Group |
| Publicity inexistent | Outsource to US agent |
| Low employee Moral | Financial Incentives implemented |
| Very Low Communication manager-employees | Feedback Policy Enforced vigorously |
| Poor communication from Executives with employees | General Meetings enforced quarterly: Canada, US, Europe |
| Some isolated individual management unfairness | Open Policy enforced with 2nd level of management |
| Software Price list too low | Increased by 25% |
| Services Price list too low | Increase by 15% |
| Products: no Web version in place | Accelerate launch date by 6 months |
| No strategic Plan Supporting our Vision | Quarterly Strategic Planning Session established |
In the previous Table 2 we have shown only the main action for each of the Diagnostic.
The formal Plan was far more detailed. As an example of this, we list some of the additional actions planned for the Diagnostic:
Top 5 Financial Ratios Under the Company's Bankers' requirements
- Develop a new Business Plan to attract new investors
- Execute a « Road show » with the potential investors
- Prepare the Due Diligence process (administrative, financial and technological)
- Negotiate the investment and specifically the pre-money valuation
As a consequence of the Diagnostic and the detailed actions, the Company has positively and significantly improved its overall situation between the beginning and the end of the mandate.
We can verify this positive change in analyzing Table 3 (graph 1) that follow. The specific financial information are confidential, this is why we are providing improvements in %. Note that the company revenues was several millions.
TABLE 3
| 2004 / 2000 | IMPROVEMENTS |
|---|---|
| Revenues | 148% |
| US Revenues over Total Revenues | 52% |
| Back Log | 467% |
| Debts | -53% |
GRAPH 1
As we can see the improvements have been considerable and this is without considering the recognitions received in Fiscal 2004. Table 4 shows some of these.
TABLE 4
| RECOGNITIONS | ORGANISMS |
|---|---|
| Top 3 Worldwide 2004 | Gartner-Forrester |
| Top 3 SME Exporter in Quebec 2004 | Chamber of Commerce |
| Top 100 Employer in Canada 2004 | Maclean Magazine |
| Top 5 IT HR Growth 2004 | PME Magazine |
SGND has had the opportunity to participate to many exciting situations since its foundation in 1982 and we are looking forward to share our expertise and experience with you.
It would an honor to contribute and help you to achieve more with your talented company.
"It has been my experience that folks who have no vices have very few virtues."
Author: Abraham Lincoln
