NECG was engaged by a major multi-business Group in Lebanon, to assess the opportunity of expanding its IT Department’s services to external clients, locally and regionally.
After successfully completing the development of the IT Group’s infrastructure (Hardware, Software and Networking), the Group’s IT Department serving all the companies Group, was facing a dormant phase with few challenging projects upcoming. Thus, in order to retain the outstanding human talent recruited and trained while developing the IT infrastructure, and because the department has cumulated skills and abilities to design / implement turn-key IT solutions, the company considered extending the IT department‘s services to external clients.
The objective of the study was to identify the range of IT services and capabilities of the Department, while assessing the attractiveness of various segments within the IT sector (locally and regionally) and matching the IT Department’s capabilities with key success factors within each segment, in order to suggest the best strategy/approach for the start-up of the company.
The study also included the projection of the new Company’s future cash-flows, the calculation of its value, and the suggestion of an architecture for the start-up of the Company.
Within the Scope of its engagement, NECG performed the following:
Identified criteria for market segmentation: Applications, Industries and Size of Companies;
Conducted a market segmentation and estimated segments size;
Understanding of successful business models in the industry and key factors for success as an essential platform for building the new Company’s strategy and game plan;
Identified the Group’s IT Department’s strengths and measured their fit with key success factors;
Established a grading model to evaluate attractiveness of
models along 4 major criteria:
o Internal fit with the new Company,
o Competition intensity,
o Reliance on external factors,
o Financial attractiveness;
Based on the attractiveness evaluation, issued a final recommendation to adopt two models simultaneously;
Highlighted the implications of each model on
implementation, in terms of offer differentiation, organization structure and development, marketing, and financial needs;
Calculated break-even point, estimated future years cash- flows and established the value of the new Company.
In order to perform the above, NECG relied on primary data gathered from (1) interviews with the Company’s and Department’s staff, (2) field interviews with key service providers and potential users in the market, and (3) a tracker-survey with potential users, along with available data from secondary sources.