Precise Software Solutions Existing Operations - Case Study Example

?Executive Summary Precise Software Solutions has plans to launch a new product called Insight, which can assess and manage the entire IT infrastructure of organization. Any newly launched products including Insight can be successful, only if they are launched after all its functionalities have been developed and tested. However, that does not seems to be the case with Insight. At the same time, the issue of timing is also important because, if Insight is launched at Oracle Open World 2000, it can get good visibility and initial acceptability, and fight off the competition. However, Precise will not be able to launch in 2000, because it does not have the human resources capabilities including technical personnel and sales team to develop the functionalities and sell product. Even if they try selling it earlier, it could lead to many short-term as well as long term-problems. Precise Software Solutions Introduction Organizations will always want to expand their markets, including the geographical markets as well as the product markets, so they can optimally tap the opportunities that may be available in those markets. When an organization finds that there are optimal opportunities in a particular product market, they will launch new products catering to that market. As new product launch can be the ‘key’ that enables the organization to open the ‘doors’ of success, organization can or need to come up new products or services at regular intervals or at appropriate times. However, one of the key issues regarding new product launches is the functionality of the product and timing of the launch. Background and the Problem Precise’s existing operations Precise Software solutions, located in Westwood, Massachusetts, launched its first product in 1996 called Precise/SQL, which has applications in the performance management market. Within three years, this single offering had expanded into an optimal suite of performance management tools, mainly for Oracle databases and other software applications. With these products, Precise had built a strong reputation as a developer of high quality products, who can deliver products with all the functionalities, which they promised or advertised before the launch, without any fail. Although, Precise/SQL remained the company's core offering, and accounted for a major portion of the Precise's revenue, the management felt there is a good scope to launch a new product. New Product, Insight and its market The product is called Insight and is to be launched to cover the product market of "performance management and availability". Broadly speaking, this market included products that measured and/or managed the efficiency and effectiveness of the various components of the IT system. Importantly, Dataquest estimated that this market to be $2.4 billion in 1999, with a doubling expected by 2003. With such high potential existing in that particular product market, Precise initiated plans to develop the software Insight. Through that product, as envisioned by its President and CEO, Shimon Alon, Precise thought they have an important new product, which can establish the company as a leader in the market on a much broader level. In addition, it would allow them to diversify its customer base, and importantly enable it to achieve its immediate goal of building Precise into a $100 million company. Main problems of functionality and timing However, the problem arose mainly regarding the launch timing of the product. That is, certain sections of the management are of the view that if the product is launched at the Oracle Open World in September 2000 in San Francisco, it will get good visibility and reach among the target customer base. On the other hand, rest of the management opined that Insight should be launched as a Generally Available (GA) version after all its functionalities were developed. As it would take sizable time to develop those functionalities, they stated it would be better if the launch can be postponed by another year (2001). This divergence of views between the management team regarding the timing of launch created confusion about the next course of action. In addition, when all the operational processes that need to be implemented during the pre-launch as well as the post-launch of Insight were discussed, it led to further confusion and disagreements. Analysis Importance of launching the product with full functionality according to customers’ expectations As pointed out above, the key problem facing the Precise Software Solutions is the timing of the launch, as both the factors of launching a fully functional product and launching the product in a correct place at a correct time, appears to be important. Launching a fully functional product meeting all the customers’ expectation is a key necessity for the success of the product. Organizations will normally develop and manufacture products with specific functionalities, mainly keeping in mind the expectations and interests of the customers. Importantly, they will announce about those functionalities before the launch of the products. So any deficiencies in the announced functionalities will create a negative image about the product in the mind of the customers, leading to its failure. This being the case, if Precise decides to launch the product in 2000 Oracle Open World itself, they will have to announce its functionalities particularly the software’s role in assessing and managing the functioning of the complete IT infrastructure in an organization. However, as mentioned above, if Precise wishes to launch in 2000 itself, they will only have a ‘half-baked’ product, with many of the functionalities missing. Thus, when the customers senses that these functionalities are missing during the demo phase or trial phase or even after purchase and installation, it will lead to many problems. The existing customers could raise complaints with the company, thus necessitating Precise to clarify with a lot of difficulties. In addition, the prospective customers could also abhor the product, leading to its total failure. Thus, it is clear that it would be very risky for a company including Precise to launch a product, without its complete set of functionalities. Factors of timing and competition However, when one focuses on the timing aspect, it is clear that Oracle Open World in 2000 provides an optimal platform for Precise to launch its Insight software solutions. As stated in the case, Oracle Open World provides many “motivated and qualified prospects in the room at one time.” (Godes, 2006). Normally, during the launch of any product, the organization and the marketing team will look at the most opportune time to launch the product. The most opportune time could be some occasions or seasons, when the product will receive heightened attention and could be bought by the customers in high numbers. In the case of Precise’s Insight software solution, if it is launched at the Oracle Open World conference, it can garner optimal attention from the prospective customers. As the conference will be attended by many industry leaders and even by IT leaders or managers of various companies, and could also be covered extensively by various forms of media, the product can get high visibility, garnering enquiries there itself. In addition, launching at the 2000 conference instead of waiting till 2001, can give Precise an early mover advantage without any competition. That is, Insight is the only product in the market, which can assess the whole IT infrastructure, then diagnose whether any problem exists and importantly can provide inputs about the source of the problem. Other currently available products cannot perform all these functionalities, so, if Precise delays its launch for till 2001, then there are high chances that one or other competitor of Precise could come up with a similar product. This could lead to unwanted competition, and Precise has to put in more financial as well as manpower resources to fight against the competitors. Thus, when viewed from this perspective, launching the product in 2000 itself, will provide the product optimal visibility and can give it an edge over its competitors. Lack of employees or lack of capabilities to develop, test and launch product inside Precise Precise Software solutions’ inability to launch the product with all the functionalities by 2000 could also be attributed to the lack of qualified employees. That is, as stated in the case, developing an end-to-end product with all the functionalities requires a skill set that was very different from Precise's existing capabilities. Although, their software development team built the product, Insight using their expertise in database environments, to get a Generally Available (GA) end-to-end product with full functionalities, they believed that experience in a networking environment would be crucial. However, there are not enough employees, who have that particular qualification and experience. This being the case, new employees with the above mentioned skill sets have to be recruited to incorporate all the functionalities. As that recruitment and training process could take sizable time, the launch could be naturally delayed. In addition, each module or functionality has to be fully tested, before being developed into a GA version, and for that, tests including alpha-test and a beta-test has to be conducted. However, the issue with that is, each test could take between 1 and 3 months, and importantly Precise has to recruit participants in each of the test phases. This recruitment of participants is also a time consuming process. Thus, it is clear that it would be difficult for Precise to launch by 2000, as there are no apt Development team of employees to develop, test and come up with a product, which has all functionalities. Sales and Pricing strategy The problem that may arise if Precise goes for a rushed launch in 2000 itself is, the existing sales team may not be able to or even equipped to handle the new product as well. That is, the sales team is already have their hands full, as they have to market and sell Precise’s existing products in different markets. As existing products and Insight have different target markets or customers, it would be difficult for the sales team to manage both the products. In addition, this new product has different functionalities, applications and potential, and so the existing sales team may not be equipped to handle it, thus necessitating the recruitment and development of a new sales team with the needed skill sets. This process of recruiting and developing new sales team could also take time, thus making the supposed early launch problematic. Recommendation From the above analysis of the various factors concerning the launch of the software product, Insight, it is clear that many factors is against the rushed launch in 2000 itself, and is in favor of the launch in 2001. That is, firstly, launching a product without the complete set of functionalities would be too risky, as the customers could find fault with it, and would disfavor even at the outset. An organization will normally develop a new product mainly to fulfill a particular necessity of a customer, and then will market or release details about the product clearly mentioning that it will fulfill those necessities of the customer. The customer will also buy that product based on those details, with the expectation that it will fulfill their needs. However, if the product does not carry out or exhibit all the functionalities, it was promised, then the customer will be unhappy with the product. They will raise complaints against the product with the company and even in the public forums. This will create bad publicity for the product as well as the company in the marketplace and also in the media, thus preventing new customers from buying the product. This worst case scenario can happen to Precise, if it goes for a rushed up launch. This was further validated by the statement in the case study, which is “Going to market too early could be just as damaging as going too late.” (Godes, 2006). Importantly, it will ruin their hard built reputation of a developer of high quality products, who can deliver products with all the functionalities as committed. In addition, Precise Software Solutions does not have expected capabilities particularly equipped employees to develop and test all the functionalities that need to be incorporated in the final GA version. As the recruitment and training of those apt employees could take time, Precise have to launch a half-baked product, and as discussed above, it is too risky to even try. Apart from this lack of availability of technical personnel, Precise Software Solutions also lack equipped sales team to sell this new product. The new product necessitates different skill sets from the employees, and for that also Precise have to recruit new employees and train them, which could consume sizable time. Thus, it is clear that Precise should set its launch target for Insight in 2001 only at the Oracle Open World conference at San Francisco. After setting that target, they should first recruit and train apt technical personnel, who can develop and test all functionalities. Then, on the same lines, Precise should recruit and train the sales personnel as well, so they can be allocated the task of marketing and selling Insight. The new sales team could market the product to all the prospective customers, and could even sell the high cost products with sizable discounts. Even the opportunity at the 2000 Oracle Open World can be tapped in another way by launching some other lightweight product and importantly by talking about the latest enhancements to SQL, and how it could positively impact its current products. Thus, the best case scenario is to launch the complete product with full functionalities in 2001, after all the functionalities were developed and tested by the in-house team, and a dedicated and trained sales team is ready to market. Reference: Godes, D. (2006). Precise Software Solutions. Harvard Business Review. Read More