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Analysis of the Dutch ERP Market
Market opportunities for Avanade’s Microsoft Dynamics
AX Solution
Thesis Supervisor: Prof. Rui Vieira
University of Amsterdam
By: Ruchi Dureja Student Number: 10671498 Course: MBA Fulltime 2013-14 Amsterdam Business School
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Table of Contents
Abstract : ... 3
1. Introduction : ... 4
2. Literature Overview : ... 6
2.1 Resource-based views of competitive strategy ... 6
2.2 Positioning views of competitive strategy: ... 7
2.3 Entrepreneurial views of competitive strategy ... 11
3. Methodology: ... 16 3.1 Research design ... 16 3.2 Data collection ... 17 4. Case Study: ... 18 4.1 Organizational background ... 18 4.2 Microsoft Dynamics AX ... 19
4.3 Dutch Market Status ... 21
4.4 Research Statement Identification ... 23
5. Discussion & Findings: ... 23
5.1 Market Research ... 23 5.2 Analysis: ... 24 5.2.1 Phase I : ... 24 5.2.2 Phase II : ... 25 5.2.3 Phase III : ... 27 6. Conclusion: ... 40 7. Appendices :... 43 7.1 Interviews ... 43 Literature: ... 46
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Abstract :
PurposeThis paper is presented in partial fulfilment of requirements of the Master of Business Administration program of Amsterdam Business School and presents the findings of Avanade Business Case Study Challenge in Avanade Netherlands B.V, an IT & Software consultancy company. This case study aims to contribute to deeper and richer understanding of the factors employed by Enterprise Resource Planning (ERP) suppliers in the process of new market creation or expansion. Much of the research available focuses on ERP implementations from the customer side, but little research material is available on suppliers. Hence, this case study is a small attempt to reduce that gap.
Design/methodology/approach
As part of this company project, a case study challenge was undertaken to study ERP market in Netherlands with the pursuit of exploring new market opportunities for Avanade’s ERP service line. The Student participated in all the discussions, meetings, interviews and presentations as part of case study team and acted as facilitator, strategic and technical advisor to the rest of the team. Equal attention was paid to internal resources and external environment while doing market research and making recommendations.
Findings
Two potential industries were selected for further study, based on Avanade’s internal resources, existing customers and stakeholder influence. These two industries are - Financial Service and Manufacturing Pharmaceutical industries. ERP systems exist in both of these industries, but Avanade has not exploited this market opportunity in Netherlands yet.
The analysis showed that current resources of Avanade are not sufficient to venture full scale in to manufacturing pharmaceuticals industry. However, mixed response was registered in favour of this proposition. The reason for this mixed response was found to be different driving needs of various stakeholders. Stakeholders here imply parent partner companies(Accenture, Microsoft) and Avanade employees. Some stakeholders were found to be more driven by visibility of Avanade Netherlands at worldwide global scale of Avanade. Other stakeholders found the opportunity to be too complex and misaligned with Avanade’s cautious approach business model. Further analysis supported by financial figures and risk map proved it beyond doubt that Avanade would require lot of effort in developing this complex solution and potential local market share may still not be sufficient to justify such efforts. Microsoft, 20% owner of Avanade, also confirmed the same views and gave positive feedbacks for following this proposal at Avanade global level rather than at local level (The Netherlands).
The other industry studied in this case was financial services. It was found that Avanade Australia already possesses projects, experience and technical know in this industry. Therefore, Avanade Netherlands would not need to develop a new solution from scratch. A broad level overview of this industry was presented to Avanade’s senior executives who agreed with the findings.
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1. Introduction :
Enterprise resource planning (ERP), refers to the software system that businesses use to streamline its business processes, centralise and align data and ensure effective utilisation of resources. Al-Mashari et al. (2003) define ERP system as follows: “a basic ERP consists of a database, an application and an integrated interface”. These days, most modern businesses irrespective of their size (whether large, mid-sized, or small) control their software systems and databases within individual departments. As per Bingi et al. (1999), “An ERP system can be thought of as a business-wide integration mechanism of all the organizational IS to take quick reaction to competitive pressures and market opportunities, be more flexible product configurations, achieve reduced inventory, and maintain tightened supply chain links.” ERP market is dominated by three software giants - Oracle, SAP and Microsoft, where each seeks to further grow their global user base. As per annual report by Panorama consulting solutions (2014), each of these three vendors has proved that they can adapt to the ever-changing needs of their clients, anticipate and capitalize on economic trends while developing offerings to suit verticals outside of their original target markets. “As the ERP market continues to flex and flourish, these three titans are coming under even more pressure to retain market share. The competition shows all signs of continuing, with customers being the ultimate beneficiary as these three vendors strive to increase their appeal and utility to clients and industries around the world” (Panorama consulting solutions, 2014)
Oracle
Oracle Corporation is well known for its database systems and expanded its market share in the ERP market through organic growth and a number of high-profile acquisitions including JD Edwards, PeopleSoft, and Siebel CRM etc. Oracle is present in manufacturing industry and large organizations, especially in the public sector and financial services sector. PeopleSoft has eight different application solutions including financials, supply chain, HR, CRM etc., among which HR and CRM solutions are the most desirable. The current PeopleSoft version is based on a web-centric design, which allows all of a company's business functions to be accessed and run on a web browser.
Oracle offers its solutions with different deployment models, including both on premise and on-demand which allows more flexibility to accommodate changing business needs, but this strength can become a weakness when it becomes harder to enforce standardized processes across a larger organization. Some of Oracle’s functional strengths include:
● Strong finance and accounting functionality
● Advanced pricing module supports complex pricing scenarios ● E-portal provides for easy interaction with customers and suppliers ● Well-built IT architecture
● Better product configurator
● Good functionality for production operations
Comparison of Oracle’s as they relate to SAP and Microsoft Dynamics: • Highest success rate
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• Shortest payback period
• Fewest amount of respondents receiving payback in greater than three years • Largest delta between planned and actual implementation duration
• Smallest delta between projected and actual project cost • Lowest rate of operational disruption at go-live
SAP
SAP SE(Systems Applications Products Societas Europaea) is a leading player in the ERP market and fuelled its growth through close relationships with a variety of alliance partners during the 1990s and 2000s. SAP offers integrated business solutions that provide industry-specific functionality and scalability for all sizes of companies. Although very robust and powerful, SAP can be more difficult to change as business evolves which is both a strength and a weakness at the same time. On the other hand, it is tightly integrated and helps enforce standardized business processes across an enterprise. SAP’s core offerings include SAP Business All-in-One, SAP Business One and SAP By Design which is different solutions based on size of the organization from 2500 employees to 500 employees. Some of SAP’s functional strengths include:
● Strong product development functionality ● Ease in supporting Make-To-Order processing ● Integrated retail module
● Clear visibility to goods-in-transit orders
● Good quality control and quality assurance functionality ● Good compliance with Sarbanes-Oxley act and tax regulations ● Strong cash management functionality
Comparison of SAP’s suite of solutions with Oracle and Microsoft Dynamics: ● Largest share of the market
● Highest short-listing rate
● Highest selection rate when short-listed
● Smallest delta between planned and actual implementation duration ● Highest rate of operational disruption at go-live
● Highest failure rate ● Lowest success rate
Microsoft
Microsoft Corporation, already an established premier supplier of operating systems and business software, entered the arena of ERP software market through series of acquisitions like Great Plains, Navison and Damgaard Software Axtapa. Microsoft’s ERP products serve organizations of all sizes but this paper focuses only on Microsoft Dynamics AX, an ERP system geared toward larger, enterprise-wide implementations. Microsoft Dynamics has historically relied upon its large network (10,000+) of partners to develop extended and industry-specific functionality beyond the core products and the core offerings incorporates
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manufacturing, public sector, service industries and distribution. Some of Microsoft Dynamics’ functional strengths include:
● Ease of customization ● High flexibility ● Ease of integration
● Familiarity of user interface
● Strong inter- and multi-company support
● Strong multicurrency and localization capabilities
● Data dimension-enabled tracking of physical moves and financial transactions ● Strong material resource planning and trade capabilities
Comparison of Microsoft Dynamics with SAP and Oracle: • Smallest share of the market
• Lowest short-listing rate • Longest payback period
• Largest delta between planned and actual project cost
• Highest amount of respondents achieving greater than 40-percent functionality • Shortest length of operational disruption
• Shortest implementation duration
This paper deals with selection and evaluation of such opportunities using strategic frameworks for Microsoft Dynamics AX ERP system of Microsoft sold by IT & Consultancy Company Avanade Netherlands B.V. in Almere.
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Literature Overview
:The reason for selecting this particular topic was lack of enough research from supplier side of ERP providers. Most of the research material available is for ERP implementations, their success or failure but the role of ERP supplier had not been studied in enough detail in the past. The area studied in this case were - what factors impact selection of new markets, development of new capabilities to meet demands of such markets from a supplier’s perspective. A qualitative research was pursued and the observer examined the issue closely through active participation and direct interaction in natural settings. Moreover, a holistic approach was much more suitable to gain insight into why and how certain decisions are made and evaluated. This study focused on new market opportunities, but the process of identifying suitable opportunities requires both, supporting figures and stakeholders commitments.
2.1 Resource-based views of competitive strategy
Resource based view advocates that a firm can achieve sustainable competitive advantage (SCA) when it possesses particular valuable resources that can help improve its efficiency and effectiveness over the long run in ways that cannot be imitated by its competitors.
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"Sustainable competitive advantage is the unique position that an organization develops in relation to competitors that allows it to outperform them consistently” (Hofer and Schendel, 1978).
SCA is different from competitive advantage (CA) because it has to be sustainable in the long run and should not be easily imitated. As per Barney (1995), a firm is said to have CA when it is implementing a value creating strategy not simultaneously being implemented by any current or potential player.
It is not always possible to achieve SCA simply by evaluating external environment and then conducting business only in attractive conditions (high-opportunity, low threat environments). Rather, managers must identify inside their firm valuable, rare and costly-to-imitate resources, and then exploit these resources through their organization. It has been a never ending jobs for strategic managers to understand sources of competitive advantage for firms.
As per Barney (1991), below four characteristics are important for a resource to be strategically important -
● Valuable: Resources can be a source of competitive advantage when they are able to add value to a firm by enabling it to exploit opportunities and neutralize threats. ● Rare: Resources have to deliver a unique strategy to provide a competitive advantage
to the firm. If a valuable resource is controlled by numerous competing firms, then it is only likely to be a source of competitive parity and not competitive advantage for any of them.
● Inimitable: Resources can only be a source of sustained competitive advantage if competing firms cannot either easily obtain them or at a cost disadvantage in imitating them.
● Non-Substitutable: Resources should not be replaced by any other strategically equivalent functional substitutes. If competitors can substitute value creating strategy of a company with another substitute, then such resources are not a source of sustained competitive advantage.
Traditionally, SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis, has been used to find SCA. This logic suggests that firms which match their internal strengths to exploit environmental opportunities, neutralize environmental threats and avoid internal weaknesses are more likely to gain CA than its competitors.
2.2 Positioning views of competitive strategy:
2.2.1 Michael Porter’s Five Competitive Forces
Porter five forces analysis is a framework to analyse competition level within an industry, developing business strategy and setting business unit boundaries.
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Porter (2008, p. 89) describes importance of this framework as “Using the five forces framework, creative strategists may be able to spot an industry with good future before this good future is reflected in the prices of acquisition candidates”
Figure 1.
Source: (Porter, 2008, p. 80)
To understand industry competition and profitability, one must analyse the industry’s underlying structure in terms of the five forces. If the forces are intense, than almost no company earns attractive returns on investment. If the forces are benign, many companies are profitable. Industry structure manifested in the five forces drives competition and sets industry profitability in the medium and long run. A healthy industry structure should be as much competitive concern to the strategists as is their company’s competitive positioning. The strongest competitive forces or forces determine the profitability of an industry and becomes most important to strategy formulation. The five forces are -
Threat of Entry: New entrants to an industry bring new capacity that puts pressure on prices, supply, costs and rate of investments necessary to compete. If new entrants are diversifying from other markets, then they can also shake up competition by leveraging their cash flows or existing capabilities. Threat of entry puts a cap on profit potential of the industry and the higher it is, the higher is the pressure on existing incumbents to hold their prices down to deter new investors. Barriers to entry, either high or low directly impacts threat of entry and it is this threat that actually holds down prices irrespective of entry actually taking place or not.
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The Threat of Substitutes: A substitute performs the similar functionality as an industry’s product through different means. Substitutes negatively impact industry’s profitability by placing a cap on pricing. An industry’s growth potential can also be negatively impacted in absence of substantial distance from its substitutes in terms of performance, pricing or marketing etc.
The Power of Suppliers: Powerful suppliers can retain most of the value creation in a value chain by keeping higher prices, shifting costs to industry participants and limiting quality or services etc. A supplier group is more powerful in case of its monopoly or concentration in the market, higher switching cost for other industry participants, product or service offerings differentiation or lack of dependency on the industry for revenue extraction.
The Power of Buyers: Powerful buyers can capture more value for themselves by pushing prices down, demanding better quality or more services and playing industry participants against one another, ultimately adversely impacting profitability of the industry. Buyers are more powerful if there are few of them or they buy large volumes relative to size of single vendor, products or services are undifferentiated or lower switching costs in changing vendors etc.
Rivalry among Existing Competitors: Rivalry in many forms(pricing, new products or improved services, marketing) limits the profitability of the industry. The extent to which industry profitability is impacted by rivalry depends upon intensity of the competition and basis on which competitors compete. Porter (2008, p. 85) states, “Rivalry is especially destructive to profitability if it gravitates solely to price because price competition transfers profits directly from an industry to its customers.”
2.2.2 Porter’s Generic Strategies
The positioning approach, often referred to as the “outside-in” approach, starts by looking at the external environment as opposed to resource based view discussed above. It aims at establishing a position that best meets the five competitive forces within the organisations industry. In order to gain SCA, Porter(1985) has further discussed three strategies that a company can undertake to attain competitive advantage - Cost Leadership (no frills), Differentiation (creating uniquely desirable products and services) and Focus" (offering a specialized service in a niche market). He then subdivided the Focus strategy into two parts: cost and differentiation.
As per Porter (1985), cost leadership implies being a market leader in terms of cost in one’s industry through -
Either through increasing profits by reducing costs while charging industry-average prices.
Or increasing market share through charging lower prices while still making a reasonable profit on each sale because of reduced costs.
Differentiation strategy involves differentiating one’s products or services from its competitors. Differentiation can be achieved through any of the factors like features, functionality, durability, support or brand image etc. This strategy will require extra cost and investments to achieve such differentiation and hence, may not be cheap.
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Focus strategies concentrate on specific niche markets, its dynamics and the unique needs of customers within the market to produce unique low-cost or well-specified products for that market. This strategy serves customers in a unique market and hence, attracts brand loyalty among its customers. This also makes that particular market segment less appealing to its competitors. Companies employ this strategy by focusing on the areas in a market where there is the least amount of competition (Pearson, 1999). It is also possible for a company to make use of the cost leadership or differentiation approach with regard to the focus strategy. It implies that a company using the cost focus approach would aim for a cost advantage in its target segment only. If a company is using the differentiation focus approach, it would aim for differentiation focus in its target segment only, and not the overall market. The downside of using focus strategy could be that niche market may not be large enough to justify investments or a company’s efforts. Porter (1980) argues that a company may be stuck in the middle in case of failure to choose between either cost leadership or differentiation strategy. Such a company would not have any CA and may suffer from poor financial performance. However, there is disagreement between scholars on this aspect of the analysis. Kay(1993) and Miller(1992) have cited empirical examples of successful companies like Toyota and Benetton, which have adopted more than one generic strategy. Both these companies used the generic strategies of differentiation and low cost simultaneously, which led to the success of the companies.
Figure 2.
Source: Internet http://www.mindtools.com/pages/article/newSTR_82.htm [accessed on 30/09/2014]
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2.3 Entrepreneurial views of competitive strategy
2.3.1 Non-Predictive Strategy
Among the most difficult of challenges in business is to create future strategy of -an organization that is doing well because such an organization may not realize the need to reposition itself to match the changing environment. Repositioning one’s next move is also not easy to address in environments characterized by uncertainty. Two prescriptions dominate the topic of firm’s next move in uncertain situations : Planning approaches and Adaptive approaches. Planning approach suggests trying harder to predict better as advocated by planning school while Adaptive approach suggests moving faster to adapt better as advocated by learning school. Both these approaches emphasize on positioning the organization within an exogenously given environment while they differ primarily on appropriate role of prediction in the decision process. Wiltbank et al.(2006) discuss framework for prediction and control and argue that successful outcomes can occur through non-predictive control-oriented approaches.
Figure 3.
Framework of Prediction and Control
Source: (Wiltbank et al., 2006, p. 983)
Strong prediction, strong control: First quadrant denotes visionary approach where one has a strong vision of the future environment and is committed to make this vision a reality through one’s actions. This configuration is assumed by strategy practices that take a vision and mission as a starting point.
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Strong prediction, low control: In this configuration, one develops a strong vision of the future market, but is unable to influence it significantly. The quality of the prediction is essential and success directly depends upon the accuracy of prediction. Hence, this strategy is fragile, especially in uncertain and turbulent environments. Low prediction, low control: This quadrant corresponds to the taker of the
environment, about which one does not develop a vision or a prediction but cannot exert any influence on it either. It is part of classic strategy, but upgraded to handle the case of industries affected by turbulence, such as high-tech sector. The paradigm is that of adjustment or trial and error. The key to success in this configuration is flexibility, i.e. the ability to adapt to a new situation quickly and at low-cost. While this approach is popular especially in today’s seemingly unpredictable world, it always have the risk of being late. Also, being purely reactive means taking the risk of not having the right assets (knowledge, experience) at the right time. As such, adaptation is important, but it cannot be firm’s sole approach in the long run.
Low prediction, strong control: In transformative approach, one does not develop vision or prediction of the future environment, but seeks to exercise strong control on its evolution. This can be done through co-creation with selected stakeholders via partnerships, coalitions etc. This approach also corresponds to Effectuation theory of new market creation in uncertain environments. It is this non-predictive approach to strategy that today offers the most prospects for strategy development and provides an opportunity to learn from entrepreneurs who are experts in dealing with uncertainty.
2.3.2 New market creation through Transformation
Sarasvathy and Dew (2005, p.538) discuss market creation process as a transformation process involving new network of stakeholders. This network is initiated through an effectual commitment that sets in motion two concurrent cycles of expanding resources and converging constraints resulting in a new market.
Entrepreneurial research discusses market creation through either Causation or Effectuation. Causation: Causation is the process of exploring the universe of all possible markets and then exploring most predictable or highly profitable ones. This process begins with exploration resulting in the identification, recognition or discovery of an opportunity, followed by a series of tasks to exploit the opportunity.
Effectuation: Effectuation process on the other hand may or may not start with an opportunity. Instead, this process starts with actual means of the entrepreneur where they identify who they are, what they know, whom they know and then act upon whatever they can afford to do. Most important part of this process is meeting people to identify possible stakeholders and plunging straight into negotiations as series of commitments. An important aspect of effectuation is to note that the opportunity (real, perceived or otherwise) does not determine who comes on board. Instead, people on board along with their commitments and contingencies that occur along the way, determine what opportunities get created.. Effectuation consists of four principles.
Bird in Hand Principle: Perfect opportunity does not always come one’s way. Instead, take action based on current means and network.
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Affordable Loss Principle: Evaluate opportunities based on whether the downside is acceptable, rather than on the attractiveness of the predicted upside.
Lemonade Principle: Embrace surprises that arise from uncertain situations, remain flexible rather than rigid towards existing goals.
Crazy-Quilt Principle: Form partnerships with people and organizations that are willing to make real commitments for co-creation.
Effectuation is not a static, one-time exercise. Rather, it is a logical process that can be used as the firm develops in the start-up phase of growth. Expert entrepreneurs follow the process to gain early customers and committed partners who then create new means and new goals as resources and viewpoints are added to the mix. Thus, instead of having a stated goal and finding means to reach it, expert entrepreneurs use the new means and new goals to drive the creation of the venture in ways they had not expected, leveraging surprises as they present themselves. Effectuation practitioners use this process to lower the risk of the venture by getting customers and income early, by setting affordable loss, and by spreading risk to others. It enables them to find truly new and useful market opportunities by leveraging constraints.
Figure 4.
Dynamic model of an effectual network and new markets
Source: (Sarasvathy and Dew, 2005, p.543)
Business schools have long taught the principles and tools of causal reasoning which is the exact inverse of the effectual reasoning. Effectual reasoning provides an alternate and coherent logic to causal reasoning. Sarasvathy and Dew, (2005) did not create a new theory
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of entrepreneurship that could be pitted against other theories. Rather, she documented logic of entrepreneurial action which has methodical implications for both researchers and entrepreneurs.
2.3.3 Effectuation vs. Causation
Figure 5.
Source: Internet: http://www.effectuation.org/learn/effectuation-101 [accessed 30/09/2014
2.3.4 Stakeholder Theory
Stakeholder theory has been a popular heuristic for describing the management environment for years, but it has not attained full theoretical status (Mitchell, Agle and Wood, 1997). A stakeholder is any person or organization, who can impact or be impacted by an organisation’s achievement of objectives. Stakeholders can be:
Primary stakeholders: are ultimately affected by an organization's actions.
Secondary stakeholders: are the ‘intermediaries’ who are indirectly affected by an organization's actions.
Key stakeholders: have significant influence within an organization and may or may not be part of above two groups. (Wikipedia, 2009)
Stakeholder analysis refers to analysing the actions of stakeholders towards a project and is frequently used during the preparation phase of a project to assess the attitudes of the stakeholders regarding the potential changes. Stakeholder analysis can be done either periodically or once to track changes in stakeholder attitudes over time.The main purpose behind doing this analysis is to ensure successful outcome of the project by developing cooperation between the stakeholders and the project team. This process requires developing a categorized list of the members of the stakeholder community, assigning priorities to them as per pre decided criteria, and finally translating the ‘highest priority’ stakeholders into a
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table or a picture. Since potential list of stakeholders for any project almost always exceed both the time available for analysis and the capacity of the mapping tool, therefore it is very important to focus on the ‘right stakeholders’ and use the tool to visualize this critical subset of the total community. The most common presentation styles use a matrix to represent two dimensions of interest with frequently a third dimension shown by the colour or size of the symbol representing the individual stakeholders.
Figure 6.
Source: Internet: http://en.wikipedia.org/wiki/Stakeholder_analysis# [accessed on 30/09/2014]
Some of the commonly used ‘dimensions’ include: Power (high, medium, low)
Support (positive, neutral, negative) Influence (high or low)
Need (strong, medium, weak)
The entrepreneurial process is an interactive combination of three components which ultimately result in market innovation (Park, 2005).
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Source: [Park, 2005, p. 747]
Entrepreneur is the first component, who decides to create a firm to pursue the entrepreneurial technology venture. The second component studied is the organization that the entrepreneur builds around themselves and its impact upon the success of the venture. Third and the final component of the process is the base technology for the venture, how it develops, evolves after interacting with the other two components of the process (Park, 2005). This interaction among the components will ultimately define the final output of the innovation process. While all of these factors have been identified in the literature, the actual interaction of the components has yet to be the focus of any real detailed empirical study (Granstrand, 1998).
As per Park (2005), above model proposes that new technology development is a key component in the innovation process for all high-tech firms, large or small. However, the innovation is not based on technology alone. Innovation is the end result of complex interaction of the inanimate technology with the living components of the model. Studying these interactions across a wide range of firms would start to identify how to effectively synthesise the various model components. This could provide a useful blueprint for effective innovation strategies and resultant market success in a variety of technology and market sectors.
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Methodology:
3.1 Research design
Every year Avanade conducts this case study challenge for its products to understand the driving forces behind market. International students from various countries and diverse backgrounds are selected to find innovative ways to create new markets or expand existing ones. A very interesting dimension of this case study is that although same steps are followed each year in the process, but human interaction coupled with environment and product findings always bring out the unique outcome.
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As per project plan provided by Avanade’s case study supervisors, entire case study was executed in four distinct phases with deliverables due at the end of each phase.
Planning and market analysis Market research
Strategy identification and development Final conclusion
Phase I: Planning and market analysis: The first phase in the case study was to identify all such stakeholders with in Avanade who would be impacted by this project, identifying their expectations and concerns and accordingly managing the final deliverables. As employees were the only source of information, and approaching the issue from a new viewpoint meant having no clear framework or previous example from which to work on. Thus, the project scope required pulling the initial data to conduct market analysis as the very first step. The following deliverables were required at the end of this phase - Detailed project plan, initial market study, team formation and identification of role, stakeholder identification report. Phase II: Market research : Second phase required identifying key tasks in the project plan, acquainting oneself with the product (Dynamics AX) including SWOT analysis, identifying current market situation in Netherlands and possible new industries for market entry supported by data. In this phase, two potential attractive industries (manufacturing pharmaceuticals, financial services) were identified. These two verticals were completely opposite to each other in terms of product developments, complexity and target customer segments and it was none the less very challenging to concentrate on two industries in a short timeframe of three months. Hence, detailed attention was given to manufacturing pharmaceuticals, the more complex but lucrative of the two options. The following deliverables were required at the end of this phase - Detailed market research along with supporting documents, feasibility analysis and running log of stakeholder interactions.
Phase III: Strategy identification and development : Third phase required clear understanding of manufacturing pharmaceuticals industry, possible long and short term strategies for market penetration supported by financial and risk analysis, consolidation of all the data to reach final conclusion of go/no go to market decision. The following deliverables were required at the end of this phase - Financial and risk analysis, Long term and short term business strategy, stakeholders commitments or response etc.
Phase IV: Final conclusion : Last step in the study and shortest of all the phases required consolidation and presentation of the findings to Avanade senior management and identified stakeholders. Final project report and presentation was due at the end of this phase.
3.2 Data collection
Primary source of data was Avanade’s employees and data was collected using individual interviews both structured or semi structured. To gather understanding of the ERP system and ERP service line operations, loose questions like “how is Dynamics AX performing in the Dutch market?”, “are existing customers satisfied and would they be happy to give recommendations?”, “how does Dynamics AX stand in competition to its main rivals in the Dutch market” were asked. Most of the meetings were planned but interview setting was
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almost always informal. Data was collected through recorded and unrecorded interviews, emails, minutes of meetings etc. Prior permission of the interviewee was always sought before recordings. In some cases, the recording request was denied due to the confidentiality of data.
Secondary sources of data collection were research reports by previous interns, official statistics, web information, sales enablement team of Avanade Research etc. The geographical area covered in the study is The Netherlands.
4.
Case Study:
4.1 Organizational background
Avanade Netherlands
Avanade is a consulting company providing solutions based on inside knowledge, innovation and deep knowledge of the Microsoft technology in seven service lines:
● Enterprise Resource Planning (Microsoft Dynamics AX) ● Application development
● Collaboration
● Business Intelligence
● Customer Relation Management ● Outsourcing
● Technology infrastructure
Avanade is a joint venture established by Microsoft and Accenture to be an exclusive provider of Microsoft solutions. The premise of this venture was to create an organization that would focus solely on delivering Microsoft consulting services, a service not yet provided by a single company. Accenture owns the majority piece (80%) of Avanade, aligning more closely with the consultancy business. The company operates in more than twenty countries, the headquarter in the Netherlands is located in Almere and corporate headquarters is in Seattle, WA., USA. The company was founded in 2000 and opened office in the Netherlands in 2004. The service delivered by Avanade is simple: “enhance business agility while lowering client cost, reduce time-to-market increasing sales and improving customer loyalty, and improving efficiency and productivity of employees.” Current tag line of Avanade is to do more with fewer customers by providing them great service and cross selling. Avanade is comprised of various service lines including application development, customer relationship management, enterprise resource planning, technology infrastructure, business intelligence, collaboration, and outsourcing and this paper deals with enterprise resource planning service line, in particular about their ERP solution named Microsoft Dynamics AX.
Source: Internet:
http://www.avanade.com/Documents/Press%20Releases/Msft%20Alliance%20Partner%20A ward%20news%20release%20FINAL.pdf [accessed on 30/09/2014]
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4.2 Microsoft Dynamics AX
Dynamics AX (AX) is relatively new product in the market monopolised by ERP giants like SAP & Oracle. It is gaining popularity and market share because of it user friendliness, lower cost and ability to integrate with other Microsoft products used worldwide like Microsoft Office or Outlook. At the moment the most recent version is AX2012 R2. Originally the software was owned by Damgaard Data; which merged with Navision and was later acquired by Microsoft in 2002. The system was developed to include the following functionality in the core system:
● General Ledger ● Bank Management
● Customer Relationship Management ● Accounts Receivable ● Accounts Payable ● Inventory Management ● Master Planning ● Production ● Product Builder ● Human Resources ● Project Accounting
Avanade has three distinct delivery methods to implement ERP systems, the regular implementation method is based on Avanade Connected Methods (ACM), which describes how projects should be executed and which deliverables should be produced. This methodology provides guidance to the consultants during the implementation; however deviations from the method are possible, common and allowed. This implementation method results in a custom tailored ERP system, customized for a specific organization. The second method is the “Fast Implementation Track” (F.I.T.) in which a standardized ERP system is implemented out of the box. Many items are pre-configured with standard datasets and much is practically ready to go. This method is available for most commonly used ERP modules. The third method, RapidResults aims to bridge the gap between regular implementations and the Fast Implementation Track, making the ERP solution non-standard and tailored for the specific organization, while at the same time being able to deliver in a highly structured and standardized way. At the same time RapidResults aims to add deep vertical industry knowledge to the implementation. Using industry specific best practices build on Avanade and Accenture experience, it tries to differentiate the ERP solution from the competitor’s solution based on the same ERP system.
Fast implementation track
For Dynamics AX, a specific delivery method called Fast Implementation Track (F.I.T.) was developed to achieve higher project success rates, add value to the ERP system, reduce costs and ensure higher user acceptance. This method incorporates preconfigured Dynamics AX environments that include business flows, business process training manuals, static data, parameters, security and data-load templates for customer data for frequently used ERP modules. This results in a more “out of the box’ ERP solution. The F.I.T. method is relatively static and needs investments from Avanade to develop “the out of the Box” package for specific ERP modules, identifying best practice processes, developing standard implementations and generating training material. At the moment this method is available
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for: administration, basic, accounts payable, accounts receivable, CRM, general ledger, inventory management, production, MRP and a few others.
A strong point of F.I.T. regarding the customers is the aim of the implementation to generate value to the system by providing the best practices, process flows, training material and short implementation cycles. This however is at the cost of the flexibility of the implementation, for example: the number of possible order types or system users can be limited in a F.I.T. implementation. The flexibility of Dynamics AX solutions is however a strong point of the Microsoft ERP solution.
Regular dynamics AX implementations
In other Dynamics AX implementations in which the F.I.T. method cannot be used for all the modules, the Avanade Connected Methods (ACM) framework and its specified deliverables are used. These deliverables are based on predefined standards and templates which guide consultants about activities that should be performed in each phase of the project; define standard documentation, gap analysis, blueprints etc. It contains roles, milestones, implementation processes, project management processes and deliverables. The deliverables in practice are extremely important because they are the criteria of judgement by Avanade’s client organizations use to judge Avanade. However in practice project managers and consultants don’t always follow these best practices and sometimes perform their job “like they have always done” and create documentation such as gap analysis, data conversion blueprints, test plans e.g. based on their own experience and templates. In contrast to F.I.T. the process and deliverables are less standardized (although they should be). An Avanade consultant described this as: “In theory these ACM defined deliverables and practices should be the best practice which should be used. However in practice during projects theory and practice have a larger distance between them and people tend not to use these best practices as they don’t really see the added value or simply are used to something else.” The deliverables and methodology rules as described in ACM are not expected to be followed strictly, but may be (slightly) adapted to fit specific project needs.
In general it can be stated that Dynamics AX is flexible and ready to configure to a customer’s requirements while F.I.T. is a predefined implementation which is ready to go out of the box. Together with a customer, decision is made regarding the best applicable method in every implementation.
RapidResults
Avanade has developed a new delivery method for ERP systems, RapidResults. This method aims to combine a number of assets into a total package and bring the “flexible and ready to configure” Dynamics AX implementation closer to the F.I.T. “more out of the box” implementation making it into a faster, cheaper, higher quality and more valuable approach. RapidResults combines four main components:
● An industry specific set of leading best practices, knowledge, processes, techniques and points of view. Developed by Avanade, Accenture or other partners with deep industry knowledge. Going further than the standardized practices incorporated in an ERP system.
● Solution accelerators such as standardized documentation, data formats, configuration blueprints, standardized documentation and testing tools.
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● Application building blocks and functional assets such as the MECOMS system, able to execute the defined processes.
● Implementation methodology and tools, like Avanade’s Connected Method to execute the implementation process.
Using the RapidValue modelling tool, the best practices are modelled and incorporated in the Dynamics AX environment. Using a top down approach an organization and the processes used are modelled in flows and activities. On the top level organizational visions, goals, requirements and scope are defined. On the lowest level individual activities are linked to ERP functionality step by step.
Source: Internet: http://www.avanade.com/Documents/Research%20and%20Insights/Why-delivery-approach-matters-for-IT-initiatives.pdf [accessed on 30/09/2014]
4.3 Dutch Market Status
At the moment, ERP market is very lucrative and there are significant opportunities in it. However, with opportunities bring with itself competition and challenges. Avanade had pioneered in health care market by providing ERP solutions to hospitals with in Netherlands and they are the only one service provider with global size and scale. In spite of such illustrious credentials, Avanade is facing challenges in this market because their customer service level is not as per promised standards and it is impacting their reputation negatively. The primary reason is slow performance either due to poor technical infrastructure at client location, problems with in Microsoft’s Dynamics AX solution or quality of the Microsoft partners.
Microsoft has a network of 10,000+ partners who distribute their products and there are two possible types of partnerships – value added reseller (VAR) and Independent software vendor (ISV). The difference between these partnerships is that ISV partners develop solution from scratch on top of Microsoft’s product while VAR partners distribute it in the market after buying from ISVs. Avanade has both types of partnerships with Microsoft and when Avanade implements/sells some solution to the client whose part functionality is built by another Microsoft partner, then quality of the final deliverable directly impact Avanade’s reputation in the market as the clients do not recognise any other third party. Similarly if the technical infrastructure likes fibre optic cables, internet bandwidth, network hardware or computers do not have the right configuration for optimal exploitation of supreme technical solution like Dynamics AX resulting in slower performance and customer dissatisfaction. Dynamics AX downward trend can also be gauged from its positioning on renowned Gartner magic quadrants in 2012 & 2013.
This downward trend in Dynamics AX rankings on Gartner quadrant implies Microsoft’s failure to guarantee necessary delivery capacity leading to reputation and market share loss. As a result of these concerns and in order to increase market share for ERP service line, a business case study challenge was conducted to identify new business development opportunities for Dynamics AX.
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Source: Gartner (2012) Figure 9.
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4.4 Research Statement Identification
There are two ways to identify new opportunities either by selling the existing solution as is or venturing into a new industry by developing new solution from scratch. Selling existing solution would be a quicker and cheaper way of market penetration but it will also be the one to reach saturation point earlier, lesser revenues and tougher competition from existing rivals. On the other hand, developing new solution from scratch is more challenging, complex and time consuming way to penetrate market but it also means more revenues, first or late mover advantages and competitive advantage. To identify possible opportunities with in Netherlands ERP market, two markets – Financial Services and Manufacturing Pharmaceuticals were studied.
Using strategic theoretical model, this case journey study focused on the following questions like what factors should be taken into account while identifying new opportunities, how and to what extent such opportunities are affected by external environment i.e. regulatory, competitive or economic, impact of executive and business model alignment before identifying a long and short term strategy that aligns with the business model of the company.
5.
Discussion & Findings:
In this case study, both outside-in and in-side out strategic perspective were used to come up with final recommendations for Avanade’s problem. Outside-in approach first focuses on the opportunities and threats, to then develop its internal strengths and weaknesses, whereas the “inside-out” approach develops its internal strengths and weaknesses, before focusing on the external opportunities and threats (Barney, 1991; Porter, 1985). Various interviews and discussion were scheduled to understand the value chain, current business process and competency of Avanade. These interviews and discussions have helped to outline any new knowledge and skills required by Avanade to implement the recommendations.
5.1 Market Research
The market research was at first very broad in scope. The motivation behind having a somewhat large scope was to have a sound understanding of the ERP market as a whole in the Netherlands before generating any type of conclusions.
Present State of the ERP Market in the Netherlands: The ERP market worldwide is expected to grow between 5 to 8%. According to “Gartner Market Share: IT Services, Worldwide 2012” report, the total ERP market opportunity for Microsoft in Netherlands is forecasted to be $120.7 million in 2014, which experienced a growth of 6.2% from 2013. As per Gartner Enterprise IT spending by vertical industry market, it was found that Healthcare, Banking and Insurance are one of the top IT spenders in 2014. IT spending capacity of an industry is extremely important for identifying technical opportunities.
Product level competition: Avanade’s competitors on product level basis were identified in the broad market research. As per “Gartner - Software Market Share, 2013”, three major market players in 2013 in the Netherlands were SAP 23%, Unit4 20% and Oracle 7%.
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Service level competition: The competitive situation had been assessed in terms of service-oriented companies. For that, Microsoft Gold partners in Netherlands were good source for information. Those companies could be divided into two groups: those that offer only Dynamics AX and those who work also with SAP, IBM, Oracle and other, smaller software companies. The former group is Avanade’s direct competitors. It was not always possible to find enough information about those competitors.
5.1.1 Attractive Market Identification
After initial market research, it was found that there are a number of different attractive industries in which Avanade could seek to enter. A number of search criteria’s were used in this research.
● Main focus was given to most innovative industries that have the funds to spend on IT as ERP is a very expensive investment which cannot be easily rolled back. It requires careful planning for successful implantation, manpower training and yearly maintenance.
● Second major criteria was industries that have participants matching Avanade’s scale and size as very small companies may not be able to afford Avanade’s high costs.
● Third criteria was to look for opportunities that could possibly be expanded at the global level.
Based on above mentioned criteria’s and data collected through “Gartner Forecast: Enterprise IT Spending by Vertical Industry Market, Worldwide, 2012-2018”, Financial Services(Banking & Insurance) 2.33% and Healthcare 2.25% were selected for further exploration.
5.2
Analysis:
5.2.1 Phase I :
Avanade is an IT consultancy & service company, not a specialised ERP provider. This means that Avanade is in business of selling technical services and not products. Product being sold is of Microsoft and for Avanade; any industry would be beneficial which would require services on top of these products. The more is the customisation in any product implementation; the better is the revenue for Avanade. Competitive scope can be global or local based on chosen industry. Some industries can require similar functionality irrespective of the region requiring little code changes in the software like financial services, but some industries can vary a lot based on the geographic boundaries like pharmaceuticals (health care
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regulations). This by no means suggests that either of the case is more advantageous than another, but it would impact market entry and software design decisions.
Buyers are mid or enterprise level organisations having spending capacity on ERP of at least $1.2 million and at least above 50 employee organization. Avanade would not be able to serve a client having 10-20 employees organisation. Main competitors in the market are SAP and oracle but Avanade also has to compete with other Dynamics AX providers in the market. Such providers should be one of the greatest concerns for Avanade as they are cheaper and provide same product or services(Dynamics AX).
Microsoft is the main supplier of the solution and may favour Avanade over other partners due to its global reach and size. Threat of substitute is very high from other competitors also being Microsoft vendors. There are not high barriers to enter in to ERP industry as value added reseller where anyone can enter by taking Microsoft licenses but barriers are high specifically in industry specific verticals. Switching costs are extremely high for customers, resulting in supreme advantage for Avanade and a customer is gained for life unless there are major problems with the product.
In summary, Porter’s five competitive forces(Porter, 2008) analysis showed that ERP industry is characterised by high competition, large number of rival firms, saturated market, high switching costs and substitutes, low level of product differentiation and high bargaining power of buyers being a very niche market on local level.
5.2.2 Phase II :
Interviews with Avanade employees at several level showed that the strongest force in the ERP industry is the competition both from in and out of Microsoft. Having a good reputation with existing clients in the market is the only way to surpass the competition. Profitability in ERP industry was squeezed due to the intense pressure and abundance of substitutes both at product and service level.
Manufacturing pharmaceuticals industry is characterised by frequently changing and highly complex health care regulations. Furthermore, there are high barriers to entry, aggressive competition and low substitutes. Strong bargaining power of buyers makes it a very niche segment. Aggressive competition from SAP would be Avanade’s biggest concern and it would also misalign with their business model of venturing in to least competitive markets. Hence, Avanade needs to carefully assess their capabilities, gap and competition before entering into this market. Another pressing concern for Avanade in this market would be lack of knowledge in handling regulations . Avanade, in the past did not have good experience with handling such regulations. At present, Avanade does not deal with this complexity and it is something to be carefully analysed before venturing in to this market. Avanade also need to improve its market reputation before making investments in this industry. One important advantage of capturing this opportunity will be controlling the entire value chain (hospitals and their associated large pharmaceutical suppliers).
Financial services, on the other hand are a technologically moving industry with good growth rates and ever increasing demand for latest systems. Major parts of existing system(Dynamics AX) can serve the needs of clients. This industry is characterised by low barriers to entry, high competition, high threat of substitutes and strong bargaining power of
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buyers. Well-placed rival specialists Actuera and SAP would be main competitors but Avanade’s already established global expertise in this industry can help Avanade faster penetrate this market. Since ERP market in Netherlands is very competitive, therefore Avanade would need to have more proactive and aggressive business model to capture significant market share.
5.2.2.1 SWOT Analysis
This analysis starts with the collection and portrayal of information about internal and external factors which may have an impact on business. Stacey (1993, p.52) describes “SWOT analysis as a list of an organization's strengths and weaknesses as indicated by an analysis of its resources and capabilities, plus a list of the threats and opportunities that an analysis of its environment identifies. Strategic logic obviously requires that the future pattern of actions to be taken should match strengths with opportunities, ward off threats, and seek to overcome weaknesses. “ In this case study, Avanade’s employees were primary source of information and interviews(as recorded in appendix) with various stakeholders helped collect needed information.
Strengths
• Together with Accenture, Avanade provides highly differentiated, market-leading ERP capabilities and industry offerings, powered by the Microsoft Dynamics AX platform.
• With its global reach and delivery capabilities, Avanade serves the enterprise-level and mid-market clients in retail, public sector, manufacturing, distribution and service industries in nearly all geographies and countries.
• Avanade is one of the biggest Microsoft’s partners in Netherlands and therefore, can expect Microsoft’s help in positioning itself favourably in any industry vertical, expecting relief from small sized Microsoft vendors in the market.
• One of Avanade’s biggest plus point is its strong technological capabilities to serve innovative clients. Coupled with Avanade’s global reach and size, this can be a very strong differentiation point to serve a niche market.
Weaknesses
• Misalignment of Avanade’s business model with current state of ERP Dutch market which is highly competitive.. Avanade tries to enter less competitive markets but Dutch ERP market is already saturated requiring more aggressive and proactive approach from Avanade.
• Lack of sufficient skilled resources with in ERP service line. At the moment, ERP service line is facing crunch of sufficient capable resources to meet present demands of health care industry. On top of that, highly skilled resources are being snatched away by better opportunities outside the company in presence of unnecessary pressure
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on them within Avanade. This will also lead to loss of core competences and tacit knowledge and is a serious cause of concern.
• Lack of collaboration and knowledge sharing among various service lines leading to loss of opportunities, delay in decision making and bad mouthing.
Opportunities
• At the moment, Avanade is struggling with ISV charging structure knowledge in health care industry and acquiring such knowledge can help in other ISV projects. • New Microsoft updates in Dynamics AX in the future can open up smaller customer
segments where Avanade can compete with cheap service providers by charging fees per module rather than entire ERP system. Avanade can exploit this opportunity by keeping technologically ahead abreast of other vendors in the market due.
• Avanade can also target customer segments as complementary service provider to main competitor SAP. As Dynamics AX is much cheaper than SAP, its lighter version would be more suitable to large multinational companies having intermediaries or subsidiaries at various locations making Dynamics AX more feasible and cheaper option.
Threats
• Avanade’s struggling reputation in healthcare industry can lead to bad name and loss of clients.
• Avanade cannot be lowest cost provider; hence it faces stringent competition from small and cheaper ERP specialists in any particular industry. It needs to work on either reducing its costs or entering in to such markets where it can benefit from its global reach and size.
• It may be difficult to find niche customers justifying specific investments for market penetration only in Netherlands.
5.2.3 Phase III:
In this phase, due to time constraints and lack of financial data for financial services, focus was given only for pharmaceuticals industry. Hence, this paper present broad analysis and findings for financial service but detailed level of analysis for pharmaceuticals industry. 5.2.3.1 Financial Services Opportunity Overview
Financial Services include banking & securities, pension funds and insurance which are technologically mature and innovative industries. Together these services are almost as big IT spenders as health care services, which can be very lucrative for Avanade being an IT
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consultancy company. Another reason in favour of this industry is that Avanade Netherlands has not tapped into this market but Avanade in other countries have. Hence, this global experience can be really helpful in local market penetration. Avanade has done eight Dynamics AX projects for six financial companies global, out of which six were for banks (Avanade internal resources).
Pension funds were narrowed in the search because of the sheer size and the number of the pension funds. It is also one of the biggest pension systems in the world. However, this market is also extremely competitive with presence of main competitors like Actuera (industry specialist), Oracle (most popular), Sapiens and SAP. This strong competition raises barriers to entry to this market. Avanade can capture some market share due to its cost competitiveness, but it can hardly be the lowest cost provider due to its highly skilled technical resources.
The following modules are required for AX for Pensions: ● CRM ● HRM ● Financial ● Asset-liability matching ● New business ● Claims processing ● Investment management
The first three modules are already existent, so Avanade needs to develop the rest of the modules to enter into this market.
Dynamics Customer Relationship Management (CRM) has been one of Avanade’s most successful product in the Financial Industry selling more than half of the total number of services. Due to popularity of Dynamics CRM, it is proposed that Avanade Netherlands should enter into ERP market through cross-selling Dynamics CRM. This market penetration also aligns with Avanade business model of doing more with existing customers. Avanade Australia has also leveraged on Dynamics CRM and cross-sold Dynamics AX to Fixed Income Investment Group. They also achieved significant synergy from it. As per Adrian Dixon, CIO of FIIG, “The fact that there were synergies between the CRM platform that Avanade had already implemented and the Dynamics AX solution was a much valued bonus”.
Source: Internet:
http://www.avanade.com/Documents/Case-Studies/FIIG%20Case%20Study%20Final%20in%20Template.pdf [accessed 30/09/2014]
Furthermore, this cross selling of AX can be easily expanded to Data & Analytics service line because big data or business intelligence is very popular these days and ERP system has access to huge data that can be converted into useful information.
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5.2.3.2 Manufacturing Pharmaceuticals Opportunity Overview
Pharmaceuticals are considered leaders in utilization of new, innovative technology in R&D. In order to survive in this industry, it is essential for manufacturing pharmaceutical companies to have high sales margins, technological advances and rapid product introductions. Dynamics AX can help provide tools needed to manage that growth and overcome challenges like: improve quality control, monitor product distribution, adhere to regulatory authority controls, improve efficiencies between multiple production lines, control stock levels and minimize excess expired stock etc. A proper ERP system can provide SCA via eliminating costly paperwork errors, speeding up information distribution and collaboration, enabling strategies for improving product quality and process efficiency and achieving compliance.
The Netherlands is one of the largest markets for pharmaceutical products in the EU with its pharmaceutical consumption increasing at stable rates, ageing population contributing to sales of specific product groups like oncologic, cardiovascular remedies and analgesics etc. The downsides for this industry reflect the strong presence of consolidated international pharmaceutical companies, which restricts the entry of new suppliers.
5.2.3.2.1 Stakeholder Analysis
Stakeholder analysis (Bourne and Walker, 2005) shows the individuals or parties who will be affected by the projects. The stakeholder analysis looks from Internal and external perspectives. Internal stakeholder analysis shows the interested groups within Avanade who could be affected by the affected.
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Figure 10.
Internal Stakeholder Analysis
Avanade employees are in all the quadrants because there will be some employees who will fit into each of the quadrants.
External Stakeholder Analysis
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5.2.3.2.2 Potential Strategies to enter in to Netherlands Market
There are three ways to enter in to the market – ● Partnership as Value Added Reseller ● Development as Industry Specific Vendor
● Acquisition of an existing ISV vendor in Pharmaceuticals Industry
Partnership as Value Added Reseller
Value added reseller makes money via implementations. By taking this approach to enter in to the market, Avanade can reduce time to market, quickly acquire domain experience, provide opportunity for training resources by learning by doing first hand.
Development as Industry Specific Vendor
ISV vendors provide industry solutions and make money through selling licenses. This approach of entering in to the market will benefit from Avanade’s scale & size. It also means longer time to market because all the resource and capabilities need to be either hired or developed from scratch. It would also be difficult to penetrate the market due to nonexistence of an existing client base. Add on module development will also need to be aligned with next major release of AX as major changes are in the pipeline. It can also be beneficial for Avanade because it may expand target customer segment to include small scale clients through cloud deployments.
Acquisition of an existing ISV vendor in Pharmaceuticals Industry
Acquisition of an existing ISV vendor in the pharmaceutical industry is the third possible strategy for entering in to the market which would be a quicker way and would leverage from existing client base. Avanade will also benefit from synergies realized through already established ISV charging structure as Avanade mostly operated as VAR partner.
Any of these possible strategies can be adapted based on Avanade’s long term or short term focus but we need to justify investments through detailed financial projections in order to proceed further in this market.
