Sale Soft, Inc.

(A) PROCEED Report

The problem identified in the case is that Sale Soft, Inc. needs to show performance before seeking additional venture capital and currently has limited funds. Therefore, it is perceived that in order to keep business going Sales Automation software PROCEED can be produced and distributed in the long run, a detour is necessary in the short run to generate revenue. Trojan Horse should be concentrated upon for the next 2 years. The decision of the company to go ahead with PROCEED was based upon the following criteria: The importance of SA consultants with respect to the industry customers Cost of educating and training potential clients Development and marketing costs of both the products The quickest revenue possible from both the products Competition and growth in the market for both the products

(Exhibit 1)
Industry Total no. of Firms with 50+ Sales Rep 149 137 2,440 198 479 263 547 370 Estimated Number of Employees 251,978 1,211,601 2,770,274 960,615 2,043,614 1,309,515 891,611 1,049,653 Estimated Number of Sales Reps 25,198 121,160 1,523,651 48,031 143,053 78,571 276,399 293,903

Software Industry Computers, Office Equipment Commercial Banking Diversified Service Companies Electronics, Electrical Equipment Scientific, Photo, & Control Equip. Diversified Financial Companies Life Insurance Companies

1% 4.8% 60.7% 1.91% 5.69% 3.13% 11.01% 11.709%

Commercial banking forms about 60% of the customer market and from the data in the case; apparently the banking sector does not need a complex sales order system as Exhibit 7 (in the case book) gives the profile of a Computer Hardware company and a Financial Service company but not of a banking company even though SaleSoft is targeting this sector as well. Promoting Trojan horse in this large segment could give the company the funds it needs. SA consultants are vital if industries like hardware, software are being targeted. But they are willing to partner upon seeing a finished product and the company does not have money to develop PROCEED into a finished product.

(Exhibit 2)

The company has 20 prospects out of which Greg Miller, President and CEO of SaleSoft, Inc. feels that 5 would buy the product within 12-15 months. However salespeople have told Miller that a large number of prospects were looking for a product that would help in the sales forecasting process a product like Trojan Horse. If 5 are possible candidates for PROCEED but a large number of prospects are possible candidates for Trojan Horse, it can be inferred that 15 of the prospects would go for Trojan Horse. The revenue from each scenario has a good opportunity , the deciding factor here is the timing revenue from Trojan Horse could come into the company 8-10 months sooner than that from PROCEED. Along with revenue, both the products incur development and marketing costs. PROCEED as it is already in the market and if SA consultants do become partners would not require heavy general awareness cost but its marketing costs are three times more than that of TH. It would also need $1,000,000 for developing the product over 8 months. Trojan Horse on the other hand requires less development cost and less time to develop ignoring the general awareness
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cost as the product will go to the already 15 prospects, the company would not incur heavy costs as it presently is and turn around its balance sheet. (Exhibit 3)
Company/ Location 1. Product 3. 1993 Estimated/1994 Projected Revenues 5. Price of product 6. Process or data-driven 7. Primary system focus SaleSoft/ Columbus, OH PROCEED $0/$0.3 million $2,400 Process Opportunity and Account Penultimate/ Irvine, CA SalesForce $0/$3.5 million $2,000 Process Opportunity mgmt

Competition and growth opportunity in the market is another criteria in the decision making. Comparison with another start-up company Penultimate shows that SaleSoft has not made enough revenue in 1994 though both companies are providing more or less the same product and service. This could be inferred as that PROCEED is promising too much and becoming too complicated unnecessarily and probably needs to revise the product. PROCEED is a good product. Sales Vice Presidents would be pleased with 2% improvement in their sales cycle but PROCEED can reduce the time by 5-8%. Besides, customer relations are important and the company needs to deliver its product to 5 clients in June 1996, 5 out of the 20 prospective clients in September 1996 and SA consultants, all waiting for a final product. These reasons make PROCEED a priority in the long run but just so that the company does not increase its liabilities and debt Trojan Horse should be the short run priority of the company.