SaleSoft, Inc. (A)
SaleSoft was founded in July 1993 with the objective of marketing PROCEED, a Comprehensive Sales Automation System (CSAS). Despite the fact that there was a good level of enthusiasm amongst the prospective buyers, the high level of supply time was a drawback with a meagre five such systems being sold till date. Thus converting the interest to sales was a real problem. Now, to seek additional funding from the Venture Capitalists for future developments, the company was under dire pressure to show performance and is in a dilemma whether or not to introduce a new product christened Trojan Horse (TH). This product can be developed, with some work, using the existing modules of …show more content…
Therefore, A will be earning $6 x .20 = $1.2 million extra in the first year after implementing PROCEED.
Now the total cost of implementing PROCEED = PROCEED License Fee + Implementation and
Training cost + Hardware costs + Project start-up costs + Annual Cost of Internal resources
= $(0.6 + 0.18 + 1.5 + 0.2 + 0.15)mn
= $2.63 mn Therefore, to recover the cost it will take company A 2.631.2 = 2.2 yrs
Similarly, for company B the total cost of implementing PROCEED = $(1.44+ 0.43 + 3.6 + 0.45 + 0.35)mn = 6.27 mn.
Additional Sales due to Sales cycle reduction = 15180 X $350m = $29 mn per yr
Therefore, to recover the cost it will take company B 6.2729 = 3 months
Thus company B will gain more quickly by implementing PROCEED.
THE TROJAN HORSE OPPORTUNITY:
Trojan Horse (TH) is a sales automation system which provided solutions that took a process view to automating the sales order cycle. Its major objective is to increase productivity of an enterprise by improving efficiency and effectiveness and reducing order cycle time. Trojan Horse allows sales manager in anticipating any shortfall in sales and set up early