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Business Plan for a New Software Quality Assurance Company 28 August 2005 The information provided in this business plan is confidential. Please do not disclose it to anyone without checking with us first. Thanks. Innofy Software Labs: Quality Assurance Specialists

Personal Goal To build an effective and lasting software quality-assurance organization To found it on a set of shared professional and social values Innofy Software Labs: Quality Assurance Specialists

Values Make & meet Improve continuously commitments Recognize accomplishment Teach & learn from each other Communicate without fear Act with a sense of urgency Play to win-win Require quality beyond Think & act like an owner customer expectations Deliver more than what Keep a balance in your life Have fun was promised Give back to the community Innofy Software Labs: Quality Assurance Specialists

Overview Executive Summary Company Summary Services Market Analysis Strategy & Implementation Management Financial Info Innofy Software Labs: Quality Assurance Specialists

Innofy Software Labs Quality Assurance Specialists A provider of quality assurance services that cover the complete software life-cycle Focused on the financial and telecom domains Headquartered in Dubai, Innofy will have sales and support offices in Singapore, Washington and London, and engineering centers in Dubai, Lahore, Karachi and Islamabad Summary Company Services Market Analysis Strategy Management Financials

Mission Planned and sustained growth in: Number of professionals Revenue per professional Profits per professional Summary Company Services Market Analysis Strategy Management Financials

Mission Build lasting relationships with our clients by consistently exceeding their expectations Summary Company Services Market Analysis Strategy Management Financials

Key Objectives 1st Year 5th Year Number of Professionals 50 800 Revenue US 630,000 US 47,430,000 Summary Company Services Market Analysis Strategy Management Financials

Strategy Sales Sell to Asian operations of US businesses; Leverage them to get work from their parents Domain Focus on no more than two biz domains Cultural focus Speed through innovation; Craftsmanship HR retention Ensure prof. growth; Share ownership HR growth Separate training institute; Dubai center Summary Company Services Market Analysis Strategy Management Financials

Main Risks Short Term Sales Long Term Growth in the number of professionals Summary Company Services Market Analysis Strategy Management Financials

Overview Executive Summary Company Summary Services Market Analysis Strategy & Implementation Management Financial Info Innofy Software Labs: Quality Assurance Specialists

Functional Structure Corporate Lahore Singapore Dubai Institute Washington London Islamabad Karachi Summary Company Services Market Analysis Strategy Management Financials

Growth in the No. of Professionals 1st Year 2nd Year 3rd Year 4th Year 5th Year Corporate 3 4 6 8 10 Lahore 42 96 169 317 490 Sales & Support Singapore 2 3 4 5 5 Sales & Support Washington 3 10 20 30 40 Dubai - 15 35 45 50 London - 2 3 4 5 Engineering Islamabad - - 25 60 100 Engineering Karachi - - - 45 100 Total 50 130 262 513 800 Institute 5 8 11 14 17 Engineering Engineering Sales & Support

Legal Structure The Innofy family will consist of six sister companies: Two registered in Pakistan; One each in Singapore, US, UAE and the UK Initially, all six will have the same Board of Directors Summary Company Services Market Analysis Strategy Management Financials

Start-Up Expenses Total start-up expenses (for the Corporate, Lahore engineering center, and the Singapore and Washington sales and support offices) for the 1st year, including: Short-term assets (computers, UPSes, generators, furniture, etc.) Cash required to handle the operations US 1,362,000 Summary Company Services Market Analysis Strategy Management Financials

Overview Executive Summary Company Summary Services Market Analysis Strategy & Implementation Management Financial Info Innofy Software Labs: Quality Assurance Specialists

Service Description We will provide quality assurance services covering the complete software life-cycle Our distinguishing feature will be the rapid pace of our assurance process We will focus on the financial & telecom services’ domains Summary Company Services Market Analysis Strategy Management Financials

Verification, then Validation The focus during the first three years of operation will be on verification, i.e. testing a design against specifications, testing code against design, etc. Starting in the 4th year, activities related to validation, i.e. testing against operational goals, will commence Summary Company Services Market Analysis Strategy Management Financials

Request for proposal QA Software supplier capability assessment Requirements & specifications document QA User’s manual QA Operation & maintenance manual QA Software development plan QA Acceptance testing document QA Test plan QA System architecture document QA Detailed design document QA Coding standards QA Design compliance QA Black-, gray-, white-box testing Automated testing Load testing Integration testing List of Services

Competitive Comparison (1) The competition comes in several forms: No competition at all: – – – – In-house SQA team Most significant Disadvantages: Inefficiency; High employee turn-over Our advantages: Focus; Speed; Cost; Long-term support Summary Company Services Market Analysis Strategy Management Financials

Competitive Comparison (2) Large, international SQA companies: – Disadvantages: Generalists; They drive their clients; Cost; Lack of innovation – Our advantages: Specialists; Innovative solutions; Speed; Fixed-cost Summary Company Services Market Analysis Strategy Management Financials

Competitive Comparison (3) Off-shore SQA Companies – Not many, yet! – Low cost – Disadvantages: Inefficient; Unfocused; Lack of domain knowledge; Weak marketing – Our advantages: Domain focus; Professional service; On-site presence; Methodology fine-tuned for speed; Partnerships with established players Summary Company Services Market Analysis Strategy Management Financials

Sales Supplements The business will begin with a corporate Website establishing the positioning, followed by a printed brochure Summary Company Services Market Analysis Strategy Management Financials

Overview Executive Summary Company Summary Services Market Analysis Strategy & Implementation Management Financial Info Innofy Software Labs: Quality Assurance Specialists

The Worldwide SQA Opportunity Annual world-wide spending on software is approaching a trillion dollars The developer to SQA-engineer ratio in reasonable software development organizations ranges from 3:1 to 1:2 Estimate of the SQA component of software development spending: 300 billion Summary Company Services Market Analysis Strategy Management Financials

Summary We will be focusing on small to medium sized projects We will be targeting businesses that are in a hurry (2-10 week turnaround time) to get the quality of their (or their client’s) software assured Our focus will be on software systems for the financial and telecom sectors Summary Company Services Market Analysis Strategy Management Financials

Market Segmentation Software Developer Organizations Organizations looking for assistance in getting the quality of the software they are developing assured according to worldclass standards Software User Organizations Organizations looking for third parties to assist them in getting software of high quality developed Summary Company Services Market Analysis Strategy Management Financials

SQA in Pakistan: The Opportunity Summary Company Services Market Analysis Strategy Management Financials

SQA in Pakistan: 2002 Survey Number of Number of Deficit* Developers SQA-Engineers Survey sample 394 74 57 Estimate for the whole country 5000 939 728 * With respect to a suggested developer-to-SQA-engineer ratio of 3:1 Summary Company Services Market Analysis Strategy Management Financials

SQA in Pakistan: The Opportunity There is a clear deficit, widening at a rate greater than the rate of growth of the industry The deficit has resulted in an industry-wide weakness in quality, and correspondingly, rates The local software export companies will very much appreciate any effort that can help them improve their rates Summary Company Services Market Analysis Strategy Management Financials

Distributing Our Service Through the Internet Software-to-beassured will be delivered to one of our engineering centers through the Internet, and the results will be delivered through the same channel Through On-Site Presence Our highly-trained professionals will move to the client’s premise and assure the quality of the software by following Innofy’s high-performance methodology Summary Company Services Market Analysis Strategy Management Financials

Overview Executive Summary Company Summary Services Market Analysis Strategy & Implementation Management Financial Info Innofy Software Labs: Quality Assurance Specialists

Why Pakistan? Majority of SQA activities require little knowledge of software development expertise The key requirements for that majority are analytical skills and domain knowledge Innofy will hire persons with superior analytical abilities and domain knowledge in her focus areas from the engineering, banking and finance professions. Pakistani institutions possesses a record of producing professionals of high-quality in these disciplines Summary Company Services Market Analysis Strategy Management Financials

Selling Our Services Our services will be sold and purchased mainly on a word-of-mouth basis, with relationships and past experience being the important factors The key to a favorable decisions made by our initial clients and partners will be the trust in the international experience, professional reputation and academic qualifications of our executive team Summary Company Services Market Analysis Strategy Management Financials

Sales Strategy Innofy will start its sales effort first in Singapore, and then in Washington The focus in Singapore will be on getting projects through established international players The emphasis in Washington will be on leveraging those initial partnerships Summary Company Services Market Analysis Strategy Management Financials

Certification Targets Year Certification 1 ISO9000 3 CMM Level 3 4 CMM Level 4 5 CMM Level 5 Summary Company Services Market Analysis Strategy Management Financials

Revenue Growth Targets for Revenue-per-PakistanBased SQA-Engineer (1000xUS ) 20% 60 10% 30% 20% 40 20 0 1 2 3 4 Year of Operation 5 The key corporate goal of Innofy is to systematically increase the overall per-SQA-engineer productivity An advantage of working in partnership with established players is that our rates can be the same as those for their in-house engineers Summary Company Services Market Analysis Strategy Management Financials

Revenue Forecast 50 Million US 40 30 20 10 0 1 2 3 4 Year of Operation 5 Summary Company Services Market Analysis Strategy Management Financials

Exit Strategy Listing on the Karachi Stock Exchange/Regional Exchanges/Nasdaq

Overview Executive Summary Company Summary Services Market Analysis Strategy & Implementation Management Financial Info Innofy Software Labs: Quality Assurance Specialists

Organizational Structure The company will start with 3 key executives: CEO CTO CMSO They will have a high level of international experience, excellent professional reputation and expertise in software development and quality assurance Summary Company Services Market Analysis Strategy Management Financials

Overview Executive Summary Company Summary Services Market Analysis Strategy & Implementation Management Financial Info Innofy Software Labs: Quality Assurance Specialists

Forecasts: Costs, Revenue, Profits 50 Million US 40 30 20 10 0 -10 1 2 3 4 5 Year of Operation Summary Company Services Market Analysis Strategy Management Financials

Investments 1st Year US 1,362,000 2nd Year US 2,117,000 3rd Year US 1,381,000 Returns Over Five Years NPV @ a discount rate of 17% IRR US 4,395,000 55% Summary Company Services Market Analysis Strategy Management Financials

Start-up year’s ramp-up discount is shown in italics Financial Worksheet All currency figures in Thousand US 1st Year 2nd Year 3rd Year Revenue Lahore 30x42x0.5 630 36x96 3,456 47x169 7,943 Dubai 54x15x0.5 405 70x35 2,450 Islamabad 47x25x0.5 588 Karachi Total 630 3,861 10,981 Costs for the SQA-Engineering Workforce Lahore 20x42x0.8 672 22x96 2,112 25x169 4,225 Dubai 50x15x0.8 600 56x35 1,960 Islamabad 25x25x0.8 500 Karachi Total 672 2,712 6,685 Costs for the Sales and Support Workforce Singapore 120x2 240 110x3 330 100x4 400 Washington 240x3 720 200x10 2,000 190x20 3,800 London 200x2 400 190x3 570 Total 960 2,730 4,770 Costs for the Corporate Office Corporate 120x3 360 134x4 536 151x6 906 Total 360 536 906 Profit (1,362) (2,117) (1,381) P/ S -216% -55% -13% The number of professionals is shown in bold 4th Year 5th Year 56x317 17,752 84x45 3,780 56x60 3,360 56x45x0.5 1,260 26,152 62x490 30,380 93x50 4,650 62x100 6,200 62x100 6,200 47,430 28x315 8,820 63x45 2,835 28x60 1,680 25x45x0.8 900 14,235 31x490 15,190 70x50 3,500 31x100 3,100 28x100 2,800 24,590 90x5 180x30 180x4 169x8 450 101x5 505 5,400 170x40 6,800 720 170x5 850 6,570 8,155 1,352 189x10 1,890 1,352 1,890 3,995 12,795 15% 27% NPV @ 17% 4,395 I RR 55%

Number of Professionals Revenue/Professional Profits/Professional Thousand US 60 800 40 513 20 0 -20 50 130 1 2 262 3 4 5 Year of Operation -40 Summary Company Services Market Analysis Strategy Management Financials

Appendix: The Institute A for-profit organization - registered as a separate private limited company in Pakistan – focused on the training of SQA personnel Requires an initial investment of US 200,000 Innofy Software Labs: Quality Assurance Specialists

Institute's Output Program 1st Year 2nd Year 3rd Year 4th Year 5th Year Short Courses (1-10 days) 100 200 400 700 1000 Post-BSEngg Diploma (6 mo) 40 80 150 300 500 Appendix Appendix