Enterprise 2.0 : Business Plans

Implementing and upgrading a Business into Enterprise 2.0 , is not going to be easy affair . Having a good Business plan, could be a good add-on in this case. It obviously gives a psycological power, to have a complete overview of the Enterprise Architechture , Business Logic and Tools for IT governance.

A proper Business plan, could give the key strategic insight, to understand the issues related to such a complex Enterprise 2.0 system implementation .

The Heart of a Business Plan

People relates heart to emotions . Business Planning relates heart to passion, that is the main reason for the Business plan, in the first place.

What is the passion of a business ?.

It is to give a service or a product which benefits a group of customers which are representatives of society .

The Case Study of Allindialive

In the case of Allindialive , it provides Entreprenuership development education and Business advisory services to Small and Medium Enterprises (SME). Somehow the entire business is based on the idea to help and serve the SME's that they could be successful . This is the heart of Allindialive business plan. It also includes that how the process of these help can be profitable that the entire service could be sustained for a long time.

In the same way the heart of other business plan are based on these same ideas which cane be fragmented into more structured format like these ..

1. Target Customers
2. Service and Product Profile
3. Profit margin out of the Service/product delivered.

If the root of the passion of the business plan is clear , then other components falls in right synchronity.

This month , I have Judged near about 14 Business plans of Indian Institute of Management , Business planning Competetion , Ideas to Implementation (i2i2009)
and found that some of the business plan has heart problems and so the synchron ity was missing.

There are also some plans which are quite healthy in thier heart and so the overall balance is absolutely visible.

Regularity on Business Planning

Some entrepreneurs, do modify there business plans on regular intervals . Some do not . There is an essential disadvantage of not modifying the business plan on regular intervals . One of them, is related to the validity of assumptions made in the plan . The Business plan need to be updated with the changing market scenario . Otherwise , it becomes a part of history .

Infact,I feel Business planning is a process . Once a person starts religiously following the process , he creates clarity in lot of avenues of Business . That clarity helps him to structure the plan in a better fashion , which could lead to better revenue outcome.

Business Plan written by Professionals for aspiring entreprenuers

There is a big doubt on the minds of aspiring entrepreneur, on the practice of recruiting a professional/consulting firm on writing their Business Plans. Most of the aspiring entrepreneur remains in a very excited stage, on the early days of business . This makes them think less of the requirements of the audience, of the business plan. In addition, they are more aligned to their emotional satisfaction and sometimes completely lost in their ego trip.

Obviously , these was hard for them, for sometime, when a person from the opposite side comes and starts dissecting their idea . Suddenly they feel lost of the entire excitement with realizing , the ground realities that a investor looks for .

However ,to me it looks like a stage where the business has start maturing from a seed stage to a sapling stage . The growth of the business brings more objectivity and these is something, an aspiring entrepreneur has to realize, early and not guard his idea in feverish emotional excitement.

I realize the Business Planning Event season has come, as the organization all around India are coming to me for with request for different role play on their business plan event starting from becoming a Judge to Mentor Business Plans .

I have already got the invitation to Judge the Business Plan Event of Indian Institute of Management , kolkata , known as i2i2009. I have been associated with i2i for some and other role, since its inception . But these time , Indian Institute of Management , Indore and National Entrepreneurship Network has invited me to mentor some of the Business Plan which has been selected in the Preliminary round of there Business Plan Competetion Sanjeevini.

Looking for a exciting time ahead with a bunch of aspiring entrepreneur . I had always a great interaction with them and there energy level remains very high ,in these seed stages of business.

Built to Last - Business Plan for Enviromentally Sustainable Business

Business and Financial institutions (FIs) are under closer scrutiny than ever before. Investors and regulators are increasingly asking challenging questions about corporate governance, the social and environmental impacts of operations and investments and how business support their local communities.

Answering these questions is not easy and requires organizations to change policies and practices. This may seem a daunting task.The best place to handle the concerns is having proper planning provision on the business plan itself and allocating expenses for the regulatory scrutiny and turning regulation as a opportunity of growth in new segments.

This seems to be the best way to make business sustainable .

Business Planning in Software Industry

Business Planning is a very regular activity in both off-the-self and custom software Industry. The present fall down of the global financial institute , would definitely lead to contraction of the market on terms of value and growth . As, all financial instruments heavily used both custom and off-the-self software to get their solutions to customer.

Custom and off-the-self Industry background :

The custom software industry grew rapidly during the tech boom of the late 1990's. When the economic downturn hit, however, business spending on equipment and software contracted even more than the overall economy. Business spending on computer equipment and software rose 6.4 percent in 2003, eight percent in the first quarter of 2004, and ten percent in the second quarter. Unlike the prepackaged software industry, which sells to consumers as well as corporate users, the custom software industry relies almost exclusively on corporate demand.

Whether demand for custom software services will continue to rise is far from certain. The present financial crisis is leading to lot of problems in custom software industry. Consumer confidence is declining, as is the rate of job creation. As businesses become more uncertain of the economic climate, they will be likely to control spending and be less likely to initiate new information technology projects. Businesses may be expected to continue to invest in ongoing IT projects and new projects that they believe will help them reduce costs or gain a competitive edge.

Seeking New Markets

In order to remain competitive, the custom software industry must expand into new markets. Fortunately, as long as the business world continues to grow and change, there will be a demand for new systems to keep up with the demands of the current business climate. New challenges facing the business world are often new opportunities for the custom software industry.

One challenge facing the corporate world is the increase of government regulation in the wake of recent accounting scandals. Compliance requirements with new Federal and state regulation can be expected to drive capital spending in the information technology fields of data storage, automation, architecture, and services. New regulations require companies to not only store data for several years, but to be able to retrieve the records quickly at the request of a regulator or auditor. While the regulations rarely require specific technologies, compliance essentially demands sophisticated programs for indexing, tracking, archiving, backup, and retrieval. Many companies are turning to customized software solutions to meet these demands.

Another market opportunity for the industry is the rise of consumer-driven healthcare (CDH), a concept in which consumers make more choices in their healthcare and health coverage. For example, under the CDH paradigm it is sometimes possible that a prescription for a given drug may be charged as either a preventive drug or a treatment for a chronic condition, with the medical coverage being different for each option. The consumer would make the choice, which would need to be tracked by either the consumer's employer of care provider.

Employers instituting more consumer-centric initiatives into their employee health care programs will need to make a number of strategic, operational, and IT decisions. The CDH market has a wide range of variation among regional and employer-specific models, making it ideal for providers of customized information technology solutions. It's also a developing market with little standardized software support in place. Even as prepackaged software solutions are developed for the CDH market, it is likely that they will need to be complimented by custom development in order for companies to create a total IT solution.

Competing with Off-the-Shelf Software

Prepackaged business management software has grown more sophisticated, providing more competition to the custom software industry. Prepackaged software is generally less expensive to acquire and requires less time to implement.

There are still advantages to having custom designed software. Few companies require all the features and functionality that come with off-the-shelf software and often end up adapting the software package to their needs. In many cases, a smaller, simpler application designed to meet the company's needs is more efficient.

Businesses must weigh the pros and cons of each option. Some companies argue that using packaged software forces workers to adopt standard processes that improve overall business performance. Others argue that if the company must change the way it operates to fit a prepackaged software model, such a change may rob it of its competitive advantage.

Conclusion

While economic indicators are uncertain, corporations will likely remain cautious about new information technology projects and investments. It is likely that demand for custom software development will continue, however, as corporations strive to meet new regulatory and business challenges.

Business Plan Editing - Adding the Believability factor

The most important factor of a Business Plan is believability. Infact, that is what Business editors has to focus, very extensively, to write a successful business plan . Often the entrepreneurs write that their products or services are best in the market . However , adding an authority, who is saying that same statement , will add a lot of believability on the plan. Even if the endorsement is not from an authority, mentioning some third person also creates a certain form of believability .Business editors has to realize the fact that any form of endorsement, creates a positive impact in the mind of investors.

Planning for a Holding Company

A holding company is a company that owns part, all, or a majority of other companies' outstanding stock. It usually refers to a company which does not produce goods or services itself, rather its only purpose is owning shares of other companies. Holding companies allow the reduction of risk for the owners and can allow the ownership and control of a number of different companies. Sometimes a company intended to be a pure holding company identifies itself as such by adding "Holdings" or "(Holdings)" to its name, as in Sears Holdings.

There are obviously certain critical advantages , that a Holding company offers to its promoter. At times holding company stands as a parent company for a large conglomerate present in a multiple Industry . This certainly brings some form of focus in the overall strategic moves of the conglomerate which otherwise can loose its focus on the pressure of diversified operation.

So planning for a Holding company was done keeping different situation in mind . Recently , in Indian Banking sector ,it was seen, that two major banking conglomerate SBI and ICICI is looking for the holding companies structure, for the inherent benefit it brings in restructuring the strategic space.

On other cases , planning for a holding company could bring a strong positional advantage in a particular sector or sub sector. It is definite ,that the planning largely depends on the context of the Organizational and industrial environment.

Market Research ; The Building block of a Business Plan

Last year in Octobor, I was into a TiE Networking meet in kolkata. I met a fellow gentleman who raised financed few days back ,at that point of time . He made a very interesting remark about why some business plan are funded and some are not .

He mentioned that normally a business plan made by an entreprenuer is inside-out, which articulates an entreprenuer passion, over the vision of his business. So, it talks about his aspiration to start a business, and which oppurtunity he can handle comfortably. However , in general, the plans which are funded are opposite way . The funded plan talks about a market oppurtunity first, and then elaborates it, and justifies that how the said business could comfortably, handle the market oppurtunity.

I cannot agree with him more . This is the reason , I think Market Research, is the building block of any business plan . Infact , it is orginal research ( known as primary research) which creates orginal data, can show the reliabile justification to the investor, that how the business could make a difference with his money, and give him 5x-10x return.

Types of Business Plan

There can be two types of Business Plan - internal or external .

1.0 Externally Focused Plans

Externally focused plans target goals that are important to external stakeholders, particularly financial stakeholders. They typically have detailed information about the organization or team attempting to reach the goals.

1.1 For Profit

With for-profit entities, external stakeholders include investors and customers.

1.2 Non Profit

External stake-holders of non-profits include donors and the clients of the non-profit's services.

1.3 Government

For government agencies, external stakeholders include tax-payers, higher-level government agencies, and international lending bodies such as the IMF, the World Bank, various economic agencies of the UN, and development banks.

2.0 Internally Focused Business Plan

Internally focused business plans target intermediate goals required to reach the external goals.

2.1 Revamping Systems

This business plans may cover the development of a new product, a new service, a new IT system, a restructuring of finance, the refurbishing of a factory or a restructuring of the organization.

2.2 Reviewing Performance

An internal business plan is often developed in conjunction with a balanced scorecard or a list of critical success factors. This allows success of the plan to be measured using non-financial measures.

2.3 Strategic Plans

Business plans that identify and target internal goals, but provide only general guidance on how they will be met are called strategic plans.

Why do you need a Business Plan ?

There has been always a question in an Entrepreneurs mind that " Do I need a plan ? ". My answer is simple - Yes you need it . And these are reasons why you need it ?

Planning helps to focus and set the priorities right . Often, we find that startups gets overwhelmed, with issues popping one after another . That is where we need a plan, to keep ourselves focused and not get carried away.

Here is how a business plan helps

1. Creates focus in your mind .
2. Helps to define priorities
3. Take rational decision
4. Present the Business to different stakeholders
5. Have the grip in the Cash Flow of the Business
6. Rope in partners, investors , critical employees

Yes .. you need a plan in this complex economic structure of the globalized world to make your business successful .

Business Planning Manager

Recently , I found some of the corporates looking people for the role of Business Planning Manager.It is true that the role of Business Planning manager is more operational than strategic . I have been doing Business planning for last 8 years , and I always found that there is a great loop in business planning, where you move from strategy to operation , and then you research your operation and build new strategy .

Strategy -> Operation ---> Research --> Strategy


Infact, this is how the array of combination between Product,People,Services and Brand is inter played in a marketing battle.The winners of marketing battle not necessarily have best of Product,People,Services and Brand . But they have a great combination , which they build by their business planning skills , where they could balance between the weakness and the strength of each of the component . There is no other way, you can create such an wining combination other than a proper Business planning, which can be both strategic and operational.

The depth of Plan

I have been talking to an investor. We are discussing about the key elements of a business plan from an investor perspective. He told something, which indeed was very interesting. In his view, an average entrepreneur knows the basic structure of a business plan. Naturally, an entrepreneur,is somewhat align, to that structure in less or more intensity. However, what is generally, not addressed is the depth issue. In most of the cases, it was found just some good charts and, paragraph, which fill up the ideal structure. There are no arguments and thoughts structures backing that, which investors are so keen to know. It is what he mentions as depth factor.

Is India heading towards the product game too?

Recently, some of the business plans, I made in Indian Market , is extensively focusing on making a product company . Some of them are online and the others are offline. Has the time for building a product company from India, finally arrived ? Can this transformation possible now, that we start also making global Internet and IT product brands . Following are the indicators , which says the time has finally come. Let me find , whether you agree on it or not ?

- There are no dearths of opportunities. And presently there are no significant players. Along with, there are host of categories – Telecom, Consumer Electronics, Non-Conventional energy, Software systems and tools, Food processing, financial systems, Instrumentation, Automobiles and the list is endless .

- Finally, the Indian Middle class has arrived , with a great purchasing power. One of the problems with products, that companies often use to mention, by not able to build a strong product, is the absence of a large domestic market. Now that problem is not there.

So what do you think ?

Life , Business & Chess

Life is non linear. Chess is not . It takes things definitly. So the competitors know ,there are fixed movements a pawn can have . It is a pure logical game. You do not have such definite and fixed movements of the pawns , incase of life . There is no fixed rule. Things change .

So there is a very important question come here .

We Can plan things for Chess , But can we do it in case of Life ?

It's right that chess is a kind of ideal enviroment . Plans can work there very well.Infact, it is designed in such a way that plans can work. It is less disruptive . More structured and linear.

Life is not like that . It is suprising . It is disruptive . And it is non-linear. The role what plans play in chess , the same role cannot be in life.

The objective of planning in Life is to make that intial preparation for you that you can hadle change and adapt .

The same happens in case of business , which is also full of suprises. As business is a part of economic life .