SAS Tech

SAS Tech

Proposal of Software House

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Submitted To:

Sir Riaz-ud-din

Submitted by:

Amna Riaz
Shahab Mustafa
Sadaf Zehra
MBA III

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Table of Contents
Sr # Particulars Page No
SAS TECH 4
1 Market analysis 4
2 Industry at a glance 6,7
3 Main idea 8
4 Technical analysis 9,10,11
5 Software House Sequence 12
6 Financial analysis cont... 13
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7 Bibliography 17

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SAS Tech is the software house which is concentrating on Pakistani projects

specially to participate in development of Pakistan thus enhancing IT value and strength
in country.

1-Market Analysis
The Pakistani IT & ITES industry today has an impressive story to tell. Much like the
successful startup that one would have not heard of a few years ago but is all of a sudden
the talk of the town. The Pakistan IT and ITES industry has started to appear on the radar
of firms like Gartner and IDC and in reports by AT Kearny and the World Bank. It is a
transformed industry growing exponentially and creating a stir.

1.1 Estimated Size of IT Industry

From its nascent beginnings in the late 1980s, the industry has successfully arrived to a
point where its value proposition has been validated over and over again. The largest
members are grossing 15-25 million dollars in revenues, and receiving 100 million dollar
valuations. Most tech companies are growing in excess of 30% a year annually. The
industry as a whole is doing over 2 billion dollars a year in revenue, up from less than a
billion dollars a few years ago.

1.2 Software & Services Sector with 39% Growth

for 2007 – 08
About half of this growth is coming from foreign, software and high end services
projects. IBM, Cisco and Microsoft are expanding Pakistan operations aggressively while
several startups are now backed by VCs such as e-Planet Ventures, Motorola, and Adobe.

1.3 Employment of Professionals by 41% Growth

Sectors and countries have achieved in 15-20 years, Pakistan’s technology scene is poised
to achieve in less than a decade.

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Putting it all together, the Pakistani Technology industry is very different from what it
was in the early 1990’s. From 4 founding companies in 1994, PASHA’s current
membership exceeds 370. From 4,619 full-time employees in 2004, current employment
is at 12,232 and rising.
The number of QA Professionals has doubled in the last 3 years and 20% of those
employed in the sector are foreign qualified. Fast becoming a hub of high performance
business, the questions now asked are if growth this year will be 28% or 50%, if there
will be enough skilled HR to staff demand, if there will be enough office space available
next year.

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2-The Industry at Glance

Software/BPO

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3-Main Idea
Our main idea is to open a software house in Karachi which would be the biggest
software house in the Pakistan. We will have mainly two departments.

Departments

Direct Projects Out sourcing

3.1 Prospecting Projects

Supporting ANR (Afghan National Refugee):

We will support ANR project in collaboration with NADRA by using SQL, Oracle
Data Base for Institutions
Basically concentrating on the projects and solutions for institutions like Educational ,
Medical and Business Growing Institutes.

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4-Technical Analysis:
4.1 Labor

. A professional software house normally consists of at least three dedicated sub-teams :

• business analysts who define the business needs of the market

• software designers/programmers who creates the technical specification and next
do a coding
• software testers who are responsible for the whole process of quality management

The pros:

• each person has full knowledge about the full production cycle
• people are doing various tasks what makes especially young people excited about
their work
• there is a very good possibility to manage the work load especially in crisis
situations like "all hands on pump"

4.2 Location and Size:

Our software house will be situated in main SADDAR area of Karachi. Size of our
software house would be approximately 2 acre.
4.3 Machineries and technology
We need to install high quality machinery. For this purpose we will import our computers
from U.S market and their technical people will install the computers and networking.
4.4 Training
For better and efficient use of the imported machinery we will send our experiences
programmers to U.S for training.
4.5 Software House capacity:
We will arrange 24-hours open at our software house and employees will have morning
and night shifts. So we can increase the production capacity of our software house and
ultimately more people will get employment.
4.6 Input Constraints

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Biggest constraint is load shedding. For this purpose we will arrange generators.
Generators will increase our cost but it will increase our results accordingly.

4.7 Methodologies

Software house may use a number of various methodologies to produce the code. These
can include:

• the waterfall model, including project management methodologies like PRINCE2

or PMBoK
• agile software development, such as Extreme Programming and SCRUM

There are also some methodologies which combine both, such as the spiral model, RUP
or MSF.

4.8 Projects in Controlled Environments

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We will mainly follow PRINCE2. (Projects in Controlled Environments)

Fig: PRINCE2 Methodology

5-Software House Sequence

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The sequential working of the our Software house with the team and procedures of IT is
given in pictorial form

6-Financial Analysis

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6.1Cost of Project

The estimated cost of project is Rs 15,670,000 according to proposal research and market
study.

6.2 Means of Financing

 Partner’s Equity:

Partners Name Equity in Rs Shareholding

Ms Amna Riaz 700,000 25%
Ms Sadaf Zehra 700,000 25%
Mr. Shahab Mustafa 700,000 25%
Ms Khudija Riaz 700,000 25%

 Borrowings

o Borrowing from bank Rs 420,000

o Long-term Loan Rs 840,000

6.3 Projections

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Start-Up Expense
Expense Heads Amount in Rs
Legal 10,000
License 2,000,000
Marketing 210,000
Furniture 900,000
Fixtures 350,000
50, 00,000
Computers
 Hardware & software
 Laptop
 Printer
 Projector
 Main Server
-Networking

Equipments 50, 00,000

 Photostat machine
 Fax machine
 Stationery
 Generator
Telephone
Research & Development 30, 00, 000
Rent Advances and Rent 700,000
Other expenses 500,000
Total Start-Up Expense 15,060,000
Required cash in hand 610,000
TOTAL 15,670,000

Financial Projections:

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Three years projected profit and loss and balance sheet are made to show an estimate of
S.A.S in coming years.
Projected Profit And Loss Statement

Projected Profit And Loss Statement

2009 (in Rs) 2010 (in Rs) 2011 (in Rs)
Sales 2,000,000 2,150,000 2,500,000
Less: Cost of Sales (1,200,000) (1,450,000) (1,500,000)
Gross Profit From Sales 800,000 700,000 1,000,000
Selling and Administration Expense
Salaries and wages 250,000 250,000 250,000
Commissions 15,000 15,000 30,000
Office suppliers 90,000 90,000 70,000

Legal fees 50,000 50,000 100,000

Advertising 210,000 250,000 300,000
Equipment 50,000 10,000 70,000
Research & development 25,000 35,000 50,000

Interest 70,000 70,000 140,000

Sundry expense 100,000 50,000 90,000
Less: other income 860,000 800,000 1,100,000
Total expenses (75,000) (130,000) (910,000)

Net Profit 5,000 30,000 90,000

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Projected Balance Sheet

Assets
Current Assets
2009 2010 2011
Cash 400,000 450,000 650,000
Accounts Receivable 600,000 550,000 500,000
Inventory 165,000 165,000 200,000
Prepaid rent 600,000 675,000 650,000
Bill Board 50,000 (100,000) 250,000
Total Current 865,000 1,940,000 2,250,000
Fixed Assets
Furniture 900,000 900,000 1,000,000
Fixture 350,000 350,000 350,000
Computer Hardware 345,000 345,000 500,000
Equipment 425,000 425,000 500,000
Less: Accumulated (100,000) (100,000) (100,000)
Depreciation
Total Fixed Assets 1,920,000 1,920,000 2,250,000
Total Assets 3,785,000 3,860,000 4,450,000

Liabilities And Capital

Current Debt:
2009 2010 2011
Accounts Payable 200,000 300,000 250,000
Accrued Expense 100,000 200,000 150,000
Current Borrowing 210,000 210,000 420,000
Subtotal Current 510,000 710,000 820,000
Liabilities
Short term loan Long- 560,000 420,000 840,000
term Loan
TOTAL LIABILITIES 1,070,000 1,130,000 1,660,000

Capital Stock
2009 2010 2011
Ms. Amna Riaz 700,000 700,000 700,000
Ms. Sadaf Zehra 700,000 700,000 700,000
Mr. Shahab Mustafa 700,000 700,000 700,000
Ms. Khudija Riaz 700,000 700,000 700,000
Profit 15,000 30,000 90,000
Total Capital 2,715,000 2,730,000 2,790,000
Total Liab & Capital 3,785,000 3,860,000 4,450,000

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Bibliography:
Resources from where the primary research work is done
 http://www.pasha.org.pk/
 IT professional of NADRA and Plexus (Pvt) Limited
 www.wikipedia.com

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