Entrepreneurship & New Ventures – EPR 511
Final Project
Human Resources Software Company
Done by:
XXXXX
XXX
Submitted to:
XXX
Human Resources Software Company
2
Table of Content
Abstract ………………………………………………………………………………………………………………….. 3
Introduction ……………………………………………………………………………………………………………. 4
Company profile …………………………………………………………………………………………………….. 7
About us: ……………………………………………………………………………………………………………………….. 7 Our Mission: …………………………………………………………………………………………………………………………………………….. 7 Our Vision: ……………………………………………………………………………………………………………………………………………….. 7 Values: ………………………………………………………………………………………………………………………………………………………. 7
The Strategist of the project ……………………………………………………………………………………. 9
Opportunity Recognition and the Opportunity Assessment Plan …………………………… 9
Opportunity checklist: ………………………………………………………………………………………….. 18
The Business Model Canvas …………………………………………………………………………………. 19
Our packages are: ………………………………………………………………………………………………… 25
Actions framework (Eliminate, Reduce, Rise and Create)……………………………………. 29
Feasibility Analysis ………………………………………………………………………………………………. 30
Financial Feasibility:…………………………………………………………………………………………………. 31
Conclusion ……………………………………………………………………………………………………………. 43
References …………………………………………………………………………………………………………….. 44
Human Resources Software Company
3
Abstract
Three co-founders combining their professional and educational skills to form a business
startup of Human Resource Software Company. According to the development of technology
and the new Saudi Arabia‘s vision of 2030, it helps the companies to look for improvements
and challenges to enter the global market. Nowadays most companies look to eliminate the
waste specially by decreasing the expenses as much as they can. The future innovation in
technology will eliminate various jobs in market, and one of the jobs eliminated will be
human resource jobs because companies will depend more in technology than staff of
employees. Our objective is to give our clients all Human Resources services that make them
successful. Our services will give the clients the right way to compete on the global market
because our employees have an experience and knowledge of the trends in global market and
we will fulfill that need with developing unique resources to makes our services more
professional. The main objective of our project is to make the local companies compete on
the global market and be the leader of Human Resources software services in Saudi Arabia.
We choose this project because we researched for the demand of a need of HR software in
the market of KSA by providing service to the employees saving their cost and time.
Human Resources Software Company
4
Introduction
• What Is Entrepreneurship?
Developing a HR Software which will be focused on creating a workplace that
complies with government regulations for compliance, safety, and health providing
legal protection for your company. Regulations changes often by the government,
which is where a dedicated HR software company team can help ensure you‘re in
compliance with government laws.
• Corporate Entrepreneurship
Corporate entrepreneurship involves vast business structure which is followed based
on the hierarchy of the business organization.
• Stages to Establish Startups Firms
1. Concept research
2. Detail analysis of market
3. Feasibility study
4. Creating and establishing plan
5. Starting up the business
• Factors Influencing an Entrepreneur
Economic factors, Political Factors, Social factors, Geographical factors
• Creativity and the Business Idea
It generally involves creating the human resource requirement and need in the
domestic market and standing based on the need and demand of the market.
• Trends
Personalization, Development of user-friendly software, Hiring professionals,
implementation and generation
• Sources of New Ideas
Human Resources Software Company
5
Each day new rules and regulations are implemented by the MOL thus generating the
idea by providing the required service is very important to keep the track in the
market for the HR needs.
• Opportunity Assessment Plan
It is a plan in which the opportunities are found and the implementation is done based
on the business model.
• Strategy & Innovation
The software technology will help HR departments. Human Resource Information
Systems to track employee time, recruit new employees, manage paychecks and
benefits, automate administrative tasks, track compliance, keep records, and much
more. However. HRSC will have all the features that are required to be part of Saudi
Labor market and it doesn‘t mean your company needs to spend the extra cash to
purchase everything. Your HR can take some services if he feels that work is
overloaded for him.
• Blue Ocean Strategy
Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open
up a new market space and create new demand. Blue ocean strategy will help Human
resource Software Company to expand and grab the customers in the market. As this
strategy is basically about creating and capturing uncontested market space, thereby
making the competition irrelevant. Basically, Human resource Software Company
will create the desire and demand for the Human resource as already the market is
facing this issue because of lack of professionalism. So, it will help Human resource
Software Company to capture the market as it will be the innovation which will be
solving the problems of the companies in HR. The blue ocean strategy is based on the
view that market boundaries and industry structure are not using the given Human
Resource plans and it can be reconstructed by the actions and beliefs of the innovative
players in the market. In blue oceans, Human resource Software Company will create
the demand rather than following old process. There is ample of opportunity for the
growth of Human resource Software Company that is both profitable and rapid. The
key to Human resource software business success is to define the terms of
competition and move into the "blue ocean," where the space for HR tools are for
Human resources only. The goal of these strategies is not to beat the competition, but
Human Resources Software Company
6
to make the competition irrelevant so that HR can not only benefit but also expands
its areas of operations.
Traditional Human Resource Human Resource software Company
Low System adoption
High cost
Made from Firms own strategy
Involved Less numbers of Labor
Need Time
Takes more days to solve
Simplifying the work on System
Low cost
Works on Domestic Requirement
Involves more numbers labor
Informs about time
More work in less time
Human Resources Software Company
7
Company profile
About us:
We aim to provide services for local and multinational, small and medium size companies
with online services. Our business includes dealing with companies by providing services
such as; hiring, contract, training, attendants, terminations, transfers of sponsorship,
performance appraisal services, rewards and benefits, compensation and planning with
policies and procedures.
Our Mission:
―Be a leader by providing excellent HR software services to customers to become the global
king in the Human Resources software services industry.‖
Our Vision:
To become the leading HR software services company offering word class solutions.
Values:
Clients
Our priority is to satisfy our clients by providing solution in HR needs with affordable
prices.
Honesty
To be truthful and trustworthy in all types of business dealings.
Integrity
We act ethically and professionally.
Passion
Human Resources Software Company
8
We are energetic and driven to do the best we can for our clients
Partnership
We add value to our client's businesses and establish long relationships based on trust
and respect.
Proactive: Whether you manage schedule workers or staff at a medium size or small
company, HR Software company saves your time, money and effort. Support service
for small businesses.
Innovation: The world of work is changing at an un expected rate. The question
before HR professionals is not whether they should adapt to these changes or follows
with the old methods of HR strategy, to keep pace with the needs of the business HR
software company is born. We are prepared to take hold of the changes and
innovations into the future.
Capability: We have the skills, ability, aptitude and knowledge which you as
customers look for in relation to the job. We know that lack of capability will lead to
unsatisfactory HR performance which in turn is likely to cause problems for both
managers and colleagues. We have the capability to solve these problems. In HR your
staff might be underperforming due to overload we give support to them to improve
to the required standard of competence. Our policies are to set commitment and
responsibilities in all HR area and provide you with information and guidance on how
to solve this HR issues.
Development: We understand that Human Resource and Learning are the part of a
healthy culture in professional growth, and working of organization. We help
support HR and learning staff in their critical roles by providing training, consulting,
and guiding them in this area. We connect with your teams in HR and learning so as
to create a development to connect and post issues for real-time solutions.
Human Resources Software Company
9
The Strategist of the project
The company innovation space:
1) The competitive services presently available filling this need and their feature and
prices: (Radical doing something different) what makes the company different
from others is it will provide Human resource solutions to the small and medium
sized companies with the human resource planning and service. It will not only be
limited to companies but also client who are actually working in HR in their
respective firm by making their work load less and giving or helping them to
create efficiency in working.
2) The companies in the service market space and the unique selling proposition of
this service: There are some in the domestic market that provide this kind of
services but we are the only company that provides packages with suitable price
for startup companies. The price we offer includes all services that come in HR
whereas the other companies do the work of outsourcing only. We have our own
software which will guide the person using the step by step work to make the
work easier for them.
Opportunity Recognition and the Opportunity Assessment Plan
1. The major section (Market need filled, social condition underlining the market need,
any data available to describe the market need, the size, trends and characteristics of
the domestic market, the growth rate of the market)
HR in Saudi Arabia is evolving at a fast rate to keep up with the global market trends
and improvement in the local digital transformation that is taking place with the
introduction of vision 2030. The country‘s educated and youthful workforce is
accepting and operating well with new digital transformation journey by observing
the changes in the international. Attracting, engaging, developing and retaining talent
is reshaping the current Human Resource position, role and expectation in the
kingdom of Saudi Arabia. The following data show the need of HR requirement in the
domestic market.
Human Resources Software Company
10
The above data shows the country has 54.5% of the youth group which will be in the
employment sector. Thus, creating a demand and need of the HRS for different types
of firms.
The Labor Market results for Q3, 2018 showed that total number of employees
reached 12,688,042 individuals, out of which the private sector employed 70 percent
in the domestic market.
The illiteracy rate in the Kingdom of Saudi Arabia was 60 percent in 1972, but in
2018, the illiteracy rate was less than 5.6 percent.
Thus, from the data it can be said that the youthful society, educated talent and a
nationwide transformation will influence HR trends in KSA.
Human Resources Software Company
11
The data collected by KPMG helps us in formulating or finding that will there be
demand for our company service or not?
The above data shows that 63% of the human resource position holders of the firms
agree that they are initiated with the new changes in the government rules and
regulations where as 42% accepts that they cannot do the tasks which are to be
followed by the company as per MOL rules.
It can be seen that 60% of the HR managers are not able to do their tasks because of
the required capability or skills it means that 60% only have degrees but no practical
experience of the HR work.60% cannot do HR tasks related to IT or they lack
computer skills. 33% are not able to accept the exposure in their work place. So, these
findings show us that business will need Human resource software company to take
their service which will cover up their areas of lankiness. The Chart below shows the
Perceived value of HR capabilities to the enterprise, top five Saudi Arabia vs Global
(in %)
Human Resources Software Company
12
.
Human resource is now required at every level of the organization and play a key role
in top management decision making. By introducing Human resource software, the
managers will find ways to cut costs and increase service by efficiency.
2. Minor section:
What is exciting about this opportunity?
Organizations in Saudi Arabia are facing significant challenges especially due to
continuous changes in the external environmental factors. Technological,
economical, demographical and political factors are affecting how organizations
operate especially in Human resource department. In responding to the external
challenges, Human resource Software Company will take measures particularly
related to workforce to adapt to change and minimize the effects on the small and
medium sized business organizations.
How this Environment trend effect our business:
Economic trend:
The new Vision of Saudi Arabia 2030 will increase the competitions between local
companies because of being under global standards. Nowadays. Saudi Arabia is changing
to become beyond oil, and by this changing the country will depend more on technology,
so the companies need to apply HR software systems to eliminate their expenses. Our
Human Resources Software Company
13
clients will have a great human resource management services packages that will increase
their HR performance by an excellent price with high quality.
Social trends:
With the changes taking place in the social trend of the kingdom, the human resource
management by firms also needs to change. The women are now working shoulder to
shoulder with females in all the areas of the business structure. Our company human
resource software does not do any discrimination with gender and is keen on simplifying
the task for both males and females. People are more willing to use social media to
cooperatives and with all the introduction of new services in the market. Using social
media and being updatable will help us to attract clients. Being a part social
responsibility for example; volunteering and events will increase the trust between us and
the clients. Helping the companies is one of our goals to have a successful company.
Technological advances:
As we wrote on the economic trends that Saudi Arabia now is changing and the new
vision is helping us to become a global competitor. The technology in Saudi Arabia is
updateable and most of the companies now are eliminating their expenses and depending
more in technology than human. So our company will afford the clients with new and
updatable services. For example, using training program through online class system.
Registered via mobile application. Using Cloud system to protect the data. All this
process will Save time and money.
Political and regulatory changes:
The Ministry of labor has changed the old laws and created new changes in the
employment regulations which are affecting a lot of the companies. Most of the
companies now are eliminating their staffs so that they meet the Saudization laws in their
company‘s size and number of employments. Also, the taxation system is affecting the
savings of company as they have been imposed with collection of 5% VAT and with this
the effect is seen on medium and small size companies. Our services will help those
companies to get their work successfully done without any extra payment for extra
employees.
Human Resources Software Company
14
How does the service idea fit into the background and experience of the management
team?
The Professional HR teams of the company have a full knowledge and background of
human resource management. The co-founders are graduates of human resource
bachelor‘s degree program and they have a master in business administration which is
specialized with HR, so they have gained vast experience and with that a knowledge of
the business, they will manage and organize their work. They are able to improve their
business and they have the ability to solve their problems. The company idea is fitting the
co-founder human resource knowledge.
What business skills and experience are present and needed?
The business skills that the company need are as follows:
Human recourse skills
MIS skills
Management skills
Organizing skills
Is there someone who has these needed skills and experience?
As co-founders we have most of these skills. Our service includes hiring a management
information system which will combine a team of employees to design the packages of
services for us. One of the co-founders is a finance graduate and she will do the financial
plan and how to have a finance system on the company. Also, we will hire a manager
who has a management and organizing skills to help us on managing our company to
achieve our goals.
What are the successful steps to launch the business? (Planning, Organizing, Staffing,
Directing and controlling)
Planning: It is the basic function of Human Resource management. Planning helps with
finding out a future course of action & deciding in advance the most appropriate course of
actions for achievement of pre-determined goals. Planning is determination of courses of
action to achieve desired business goals. planning is a systematic thinking about ways &
means for accomplishment of human resource management.
Human Resources Software Company
15
Organizing: Human resource software will bring together physical, financial and
productive relationship amongst different size of businesses for achievement of HR
goals. To organize in Human Resource Software Company, it involves determining &
providing human and non-human resources to the organizational structure.
Organizing involves:
Identification of Human Resource activities.
Classification of grouping those activities in different groups.
Assigning of tasks.
Delegation of authority and responsibility to the staff.
Coordinating in delegations.
Staffing: Staffing involves hiring of proper and qualified employee for the Human
Resource software so that the main aim and objective is established. The main
purpose of staffing is to put right man on job Staffing involves:
Manpower Planning (estimating man power and to choose the person and
giving the right place)
Recruitment, Selection & Placement.
Training & Development.
Remuneration.
Performance Appraisal.
Promotions & Transfer.
Directing: Directing is guiding the work in from the first process to the last. As
without guidance no work can be successful. Direction is that aspect of management
which deals directly with influencing, guiding, supervising, motivating sub-ordinate
for the achievement of Human Resource software goals. Direction involves
supervision of staff, Motivation, leadership and communication.
Supervision- implies overseeing the work of subordinates by HR professionals. It is
the act of watching & directing how the work is done by the HR staff.
Motivation- it involves inspiring, stimulating and encouraging the sub-ordinates with
monetary, non-monetary incentives.
Human Resources Software Company
16
Leadership- it is the process by which HR manager guides and influences the work of
subordinates in desired direction.
Communications- is the process of passing information, experience, opinion etc from
one person to another. Human resource Software Company will communicate so that
things work as per the service required.
Controlling: is measurement of performance against the standards and correction of
performance to ensure achievement of Human resource software. The purpose of
controlling is to ensure that everything occurs with the standards. Controlling is the
process of checking whether or not proper progress is being made towards the
objectives and goals. Controlling has following steps:
Checking of standard performance.
Measurement of performance.
Comparison of performance with standards
Determining the sequence of activities and putting these critical steps into some
sequential order:
Human Resource Software Company will include the following activities in
sequential order:
Establish the organizational structure
Planning Human resource
Manage performance
Training and development
Personal relation
Supply of services
Identifying what will be accomplishment in each step
Establish the organizational structure
Human Resources Software Company
17
First and foremost, step is to establish a structure through which the business
will operate. It includes the structure of functional department, organizational
structure etc.
Planning Human resource
In this Human Resource software will decide how much of the work force will
be required in the staffing process so that the basic management function is
performed.
Manage performance
In this HRSC will see what are the sales plan, how the business is opting the
plans and what strategy is followed so that performance work increases and
plans are implemented.
Training and development
Based on the requisites of the orders from different business requirement the
training and development will be implemented so that the new or working
staff does not follow as a work load on them and instead does the work on or
before the dead line.
Personal relation
In this the company will create personal relations with its small and medium
sized business so that the the revenue for the firm is generated.
Supply of services
Once things go as per plan the supply of services can be varied based on
timely manner.
Determining the time and acquiring the cost, the total amount of time and cost
which might occur at each step, identifying the source of getting the finance.
An assumption is that the administrative costs will not exceed 20% of the total
staff costs approximately 2000SR.
Staff costs do not exceed 60% of the total sales value approximately 20000SR
Staff costs do not exceed 40% of the value added that is 5000 SR
Total estimate cost of creating the software will be 10000 Sr
Human Resources Software Company
18
Opportunity checklist:
Customer
Small and
medium sized
business,
HR employs
Competition
Human
resource
service
providing
firms
Vendors
Software,
Firmware
Government
State,
Local,
International
Global
environment
No
environmental
effects
involved
Trend
Human
Resource
software and
usages
Market size
Small and
medium sized
business firms
Price
Ranges from
500sr to
1500Sr
Market
growth
Based on
employment
trend
Distribution
From Top
level to
medium level
management
Human Resources Software Company
19
The Business Model Canvas
Value Proposition: our value proposition is to deliver online service related to Human
Resources and we provide it 24/7 with affordable prices so it can suet small and medium
companies.
The collection of Human resource software we offer will meet the needs of the companies.
Human resource software company value proposition is what distinguishes it from the HR
field. There is no such firm with this innovative idea in the kingdom. Human resource
software company will provide value through various elements such as newness,
performance, customization, "getting the HR work done on time", less price, cost reduction,
risk reduction, accessibility, and convenience/usability by the HR department.
The value propositions will be in two forms:
Quantitative – price and efficiency
Qualitative – overall business or employee experience and outcome
Business companies as customers will be able to solve their HR problems by an app and our
software. With a single click by them they will get a confirmation of their requirement and
contacted by our employee to collect more information. The free employees will be notified
by the software to the computer operating system which will help the customers to know how
much cost and time will be incurred.
Customers: Human resource Software Company believes in the term ―Customer is king‖ and
for this customer oriented and easy interface application will make it easier for the customers
to take the benefit of the services offered by Human resource Software Company.
Customer Segments:
We have different segments such as: small and medium companies, Candidates,
Employees and Managers there will be a user interface in the software which will
make the working easy for all the above segments of customers and their work will be
easily handled by our HR team. The main job will be providing the HR solutions to
the business customers.
Human Resources Software Company
20
Customer relationships:
To build relationships with customer we will give them membership, automated
system and club to keep them close and know their needs. To ensure the survival and
success of Human resource Software Company, Human resource Software Company
identifies the type of relationship it should create with their customer segments. Now
a day‘s widely used methods are used to contact or create interest in the business.
Various forms of customer relationships include:
Personal Assistance: Assistance in form of employee-customer interaction. Such
assistance will be performed during sales and/or after sales.
Dedicated Personal Assistance: The most intimate and hands-on personal
assistance in which a sales representative will be assigned to handle all the needs
and questions of a special set of clients in the HR.
Self Service: This type of relationship involves indirect interaction between the
Human resource Software Company and the clients. Human Resource Software
Company will provide the tools needed for the customers to serve themselves
easily and effectively with proper guidance on the software user interface.
Automated Services: A system similar to self-service but more personalized as it
has the ability to identify individual customers and their preferences. Human
resource Software Company will be making changes based on suggestions based
on the characteristics or requirements of Customer Company.
Various sets of customers (Small and medium sized business firms) can be segmented
based on their different needs and attributes to ensure appropriate implementation of
their HR strategy and to meet the characteristics of selected groups of clients. The
different types of customer segments include:
Mass Market: There is no specific observation here. All types of customers will
be able to access the service through HR software and no restrictions will be
there on any type of customers who accepts to purchase it.
Niche Market: Customer segmentation based on specialized needs and
characteristics of its clients. e.g. foreign company, outsourcing company like
Human Resources Software Company
21
their employees in India and service provided in KSA (Zain, Souk.com call
centers)
Segmented: Human resource Software Company will apply additional
segmentation if the clients need more source of attractions if they lack in HR
knowledge.
Channels:
channels either face to face, email, phone call for both communication channels and
distribution channels or for information about this type of service can use system. Human
resource Software Company can deliver its value proposition to its targeted customers
through different channels. Effective channels will distribute its value proposition in ways
that are fast, efficient and cost-effective. The best source will be mobile app, internet and
website. Use of face to face meetings, replying through emails, answering phone calls
will be the channel for Human resource Software Company to communicate.
Key Activities:
we need software courses, workshops and tutors. The most important activity in
execution by Human resource Software Company will be value proposition by giving
solutions in HR. Through the use of software application customer and the companies
will know what are their need and how will it be solved. This will help the firm to be
effective and efficient in its service to the customers. Human resource Software
Company will be creating an efficient supply of to the small and medium sized
companies in the kingdom and to drive down costs so that all are benefited from it.
Key Resources:
Software and web development, IT employees and programmers. The resources that
is necessary to create value for the customers will be IT employees who will help the
customers to enter in the software and take the service they want. The database
system will also help in knowing which customer is regularly using the software or
using the service very often. Through this different pricing strategy will be created.
software engineers and the IT employee will be the main assets to Human Resource
Human Resources Software Company
22
Software Company as they will be needed to sustain and support the business. These
resources will be in form of human, financial, physical and intellectual.
Key partners:
Investment company, license and government authority. The main key partners for
Human resource Software Company will be the main commercial businesses, investment
companies, government authorities, and some companies with high number of staff. The
technical support from the company who is going to follow our model in preparation of
software is the prime investors as they are seeing this idea as a positive innovation in
meeting their HR solution in the kingdom of Saudi Arabia. In order to optimize
operations and reduce HR work, we will usually cultivate buyer-supplier relationships so
that we can focus on our activity. We are also looking for complementary business
alliances through joint ventures or strategic alliances.
Revenue streams:
Purchasing and joining fees. Several ways to generate the revenue stream will be:
Asset Sale –Selling ownership rights of the software
Usage Fee – Money generated from the use of our HR software
Subscription Fees – Revenue generated by selling access to a continuous service.
Lending/Leasing/Renting – Giving exclusive right to a HR software for a particular
period of time.
Advertising – Revenue generated from charging fees for product advertising at our
software about some departments like insurance company etc.
Cost structure:
Characteristics of Cost Structures:
Fixed Costs – Costs are unchanged across different expenses. e.g. salary, rent
Variable Costs – Costs vary depending on the production of services. e.g.
hardware and installation
Economies of Scale – Costs go down as the software is sold with minor changes
required by client.
Human Resources Software Company
23
Economies of Scope – Costs go down due to more sale and usage of software
application.
Key
Partners
Small and
medium sized
companies
with high
number of
staff
Key
Activities
Value
proposition.
use of
Software
application
Value Propositions
"getting the HR work
done on time", less price,
cost reduction, risk
reduction, accessibility,
and convenience/usability
for the customers.
Quantitative – price and
efficiency
Qualitative – overall HR
experience and outcome
Customer
Relationships
Personal
Assistance
Dedicated
Personal
Assistance
Self Service
Automated
Services
Customer
Segments
Mass
Market
Niche
Market
Segmented
Diversified
Platform
Key
Resources
Intellectual
Human
Resource
software
Channels
Software- Direct
Customers
Firms- Number
of Staffs and
employees
Service- By
customers self
Human Resources Software Company
24
Cost Structure
Fixed Costs
Variable Costs
Economies of Scale Economies of
Scope
Revenue Streams
Service Fee
Subscription
Lending/using/ Advertising
Human Resources Software Company
25
Our packages are:
Our business includes:
Employees database
Job information
Current and historical salary data
Full time/ part time status
Employee availability
Employee anniversaries
Payroll:
Salary tracking
Bonuses
Direct deposit
Reporting
Administration
Employee access to personal information
Insurance information
Wellness programs
Life events management
Performance review:
Goal sitting
Employee feedback
Competencies
Performance appraisal system
Reward system
Employees self-service:
Time off request
Payroll information
Human Resources Software Company
26
Company announcement
Time and Attendance:
Workforce Scheduling
Absence management
Sick time monitoring
Learning management:
Certification management
E-learning management
Training administration
Applications
Job requisitions
Job description
Candidate database
Interview management
Package #1: 250 SR per employee
Employees database
Current and historical salary data
Payroll
Performance appraisal system
Absence management
Training administration
Package #2: 350 SR Per employee
Employees database
Insurance information
Life events management
Performance appraisal system
Reward system
Sick time monitoring
Human Resources Software Company
27
E-learning management
Job description
Package #3: 450 SR per employee
Employees database
Job information
Employee availability
Employee anniversaries
Salary tracking
Bonuses
Employee access to personal information
Reward system
Certification management
Package #4: 650 SR per employee
Payroll reporting
Competencies
Performance appraisal system
Reward system
Time off request
Certification management
E-learning management
Training administration
Candidate database
Interview management
Package #5: 1500 SR per employee
Employees database
Job information
Current and historical salary data
Full time/ part time status
Human Resources Software Company
28
Employee availability
Employee anniversaries
Salary tracking
Bonuses
Direct deposit
Reporting
Employee access to personal information
Insurance information
Wellness programs
Life events management
Goal sitting
Employee feedback
Competencies
Performance appraisal system
Reward system
Time off request
Payroll information
Company announcement
Workforce Scheduling
Absence management
Sick time monitoring
Certification management
E-learning management
Training administration
Job requisitions
Job description
Candidate database
Interview management
Human Resources Software Company
29
Actions framework (Eliminate, Reduce, Rise and Create)
Strategically Reduce Cost:
Eliminate
1. Free trial for less than 1 month.
2. Discounts after 100 employees after 3 times using the service.
3. Price competition.
4. Price generation on special demands
Reduce
1. Capital
2. Net strategy; labor and depend on technology
3. Packages
4. Installation charges
Strategically Invest In:
Raise
1. Outsourcing
2. Quality of service
3. Data security
4. Data safety
5. Data management
Create
1. Platform
2. Brand image
3. Innovation ideas
4. HR solutions
5. Decreasing gap in firms HR
Human Resources Software Company
30
Feasibility Analysis
The kingdom of Saudi Arabia, is diversifying its economy by changes in market labor force.
The Saudi labor market is multicultural, characterized by a distinctive tradition, including
new labor laws implemented by the MOL. The market has struggled to meet expectations
because of lack of professional experience and management. Providing additional service in
HR software is necessary element in pursuing this goal for the vision of 2030.
Service Feasibility:
Over the past few years, The Small and medium sized business have taken multiple steps
toward improving the Human resource departments. By 2014 changes have been observed in
the HR strategy as new laws started implementing creating it a form of new innovation and
strategic plan for the human resource department. Thus, Human resource software company
knows the need of the market and can wit stand those needs.
Target Market Feasibility:
Reexamine HR design options followed over the past few years
Evaluate changes in the domestic market requirements
Analyze software development options and prepare projections
Reach the target customers through providing them services they require
Organizational Feasibility:
Management prowess: The group of Human Resources professional staff with other
employees to provide the service of smooth operations
resource sufficiency: human resources, Technical support, Software, HR knowledge
etc
Human Resources Software Company
31
Financial Feasibility:
Business Name
Human Resource Software
Company
Start Date 01-12-19
Financial Assumptions – Income
Statement
Turnover
Year 2 Year 3 Year 4 Year 5
Annual Turnover Growth
%
8.0% 8.0% 10.0% 10.0%
Gross Profit %
Operating Expenses
Year 2 Year 3 Year 4 Year 5
Annual Expense Inflation
%
6.0% 6.0% 6.0% 6.0%
Depreciation &
Amortization
Annual Depreciation
Charges
263,000
307,000
250,000
275,000
12,000
12,000
12,000
12,000
Interest, Taxation &
Dividends
Financial Assumptions – Balance
Sheet
The following balance sheet balances are projected by entering the appropriate monthly
movements during the first year on the cash flow
Human Resources Software Company
32
Year 2 Year 3 Year 4 Year 5
Reserves
–
–
–
–
Loans & Advances
(20,000)
–
10,000
15,000
Other Receivables
(7,000)
–
(5,000)
(10,000)
Other Accruals
6,000
(16,000)
20,000
10,000
Other Provisions
(9,000)
19,000
15,000
18,000
Purchases of property,
plant & equipment
(300,000)
(180,000)
(200,000)
(350,000)
Purchases of intangible
assets
–
–
–
–
Purchases of investments
(400,000)
(600,000)
(500,000)
(400,000)
Proceeds from
shareholders'
contributions
–
–
–
–
Human Resources Software Company
33
Forecast set up Cost:
Set-up costs
Setting up the business
Accountant's fees SR1,000
Solicitor's fees SR500
Business registration SR5,000
Domain name registration SR5,000
Insurance premiums SR500
Licenses SR5,000
Workers compensation
Setting up the Office
Lease deposit and advance SR50,000
Fitout SR5,000
Utility and connection SR1,000
Stationery and office supplies SR500
Plant and equipment
Equipment SR10,000
Vehicles SR20,000
Telecommunications SR6,000
Computers and software SR50,000
Human Resources Software Company
34
Starting operations
Advertising and promotion SR2,000
Raw materials and supplies SR2,000
Working capital SR50,000
Start-up capital
Equity investment SR100,000
Borrowings
Total SR100,000
The result
Total set-up costs SR213,500
Surplus funds 0
Borrowings required SR113,500
Forecast Income Statement:
Dec-
2019
Year-
2020
Year-
2021
Year-
2022
Year-
2023
Year-
2024
Product Sales
305,200
3,662,300
3,955,284
4,271,707
4,698,877
5,168,765
Income From
Services
131,200
1,535,100
1,657,908
1,790,541
1,969,595
2,166,554
Total Turnover
436,400
5,197,400
5,613,192
6,062,247
6,668,472
7,335,319
Software
Products
195,328
2,362,230
2,452,276
2,563,024
2,819,326
3,101,259
Human Resources Software Company
35
Total Cost of
Sales
195,328
2,362,230
2,452,276
2,563,024
2,819,326
3,101,259
Products
109,872
1,300,070
1,503,008
1,708,683
1,879,551
2,067,506
Services
131,200
1,535,100
1,657,908
1,790,541
1,969,595
2,166,554
Total Gross
Profit
241,072
2,835,170
3,160,916
3,499,223
3,849,146
4,234,060
Gross Profit % 55.2% 54.5% 56.3% 57.7% 57.7% 57.7%
Other Income
500
6,000
6,480
6,998
7,698
8,468
Operating
Expenses
Accounting
Fees
2,000
24,000
25,440
26,966
28,584
30,299
Advertising &
Marketing
5,000
131,000
138,860
147,192
156,023
165,384
Bank Charges
250
3,000
3,180
3,371
3,573
3,787
Cleaning
Expenses
860
9,420
9,985
10,584
11,219
11,893
Computer
Expenses
4,200
8,000
8,480
8,989
9,528
10,100
Consumables
–
5,289
5,606
5,943
6,299
6,677
Electricity &
Water
1,200
13,400
14,204
15,056
15,960
16,917
Software
developer
Hire
–
18,000
19,080
20,225
21,438
22,725
Insurance
2,300
25,800
27,348
28,989
30,728
32,572
Human Resources Software Company
36
Legal Fees
–
74,000
78,440
83,146
88,135
93,423
Motor
Vehicle
Expenses
–
1,800
1,908
2,022
2,144
2,272
Printing &
Stationery
300
3,600
3,816
4,045
4,288
4,545
Professional
Fees
–
32,000
33,920
35,955
38,113
40,399
Rent
22,000
244,000
258,640
274,158
290,608
308,044
Repairs &
Maintenance
–
5,880
6,233
6,607
7,003
7,423
Training
–
12,000
12,720
13,483
14,292
15,150
Total
Operating
Expenses
41,045
664,139
703,987
746,227
791,000
838,460
Staff Costs
Salaries
70,000
840,000
890,400
943,824
1,000,453
1,060,481
Wages
30,000
360,000
381,600
404,496
428,766
454,492
Total Staff
Costs
100,000
1,200,000
1,272,000
1,348,320
1,429,219
1,514,972
Depreciation
&
Amortization
Depreciation
19,000
188,000
263,000
307,000
250,000
275,000
Amortization
1,000
12,000
12,000
12,000
12,000
12,000
Human Resources Software Company
37
Total
Depreciation
&
Amortization
20,000
200,000
275,000
319,000
262,000
287,000
Profit / (Loss)
before Interest
& Tax
80,527
777,031
916,409
1,092,675
1,374,625
1,602,096
Profit / (Loss)
before tax
60,797
558,434
674,280
852,107
1,163,172
1,405,688
Taxation
17,023
156,362
188,799
238,590
325,688
393,593
Profit / (Loss)
for the year
43,774
402,072
485,482
613,517
837,484
1,012,095
Dividends
40,207
40,207
48,548
61,352
83,748
101,210
Retained
earnings for
the year
3,566
361,865
436,934
552,165
753,735
910,886
Profit / (Loss)
%
10.0%
7.7%
8.6%
10.1%
12.6%
13.8%
Human Resources Software Company
38
Forecast Cash Flow Statement:
Dec-
2019
Year-
2020
Year-
2021
Year-
2022
Year-
2023
Year-
2024
Cash flows from operating
activities
Profit / (Loss) for the
year
43,774
402,072
485,482
613,517
837,484
1,012,095
Interest
19,730
218,597
242,128
240,568
211,453
196,408
Taxation
17,023
156,362
188,799
238,590
325,688
393,593
Depreciation
19,000
188,000
263,000
307,000
250,000
275,000
Changes in operating
assets & liabilities
Inventory
2,605
(32,153)
(7,706)
(9,478)
(21,934)
(24,127)
Receivables
(831)
(62,638)
(34,611)
(37,380)
(50,463)
(55,509)
Advances
–
–
(20,000)
–
10,000
15,000
Software Receivables
–
–
(7,000)
–
(5,000)
(10,000)
Service Payables
(1,161)
(7,785)
4,988
5,981
12,643
13,867
Other Accruals
60,000
5,000
6,000
(16,000)
20,000
10,000
Human Resources Software Company
39
Other Provisions
30,000
(12,000)
(9,000)
19,000
15,000
18,000
Cash generated from
operations
221,144
914,035
1,124,123
1,382,472
1,625,848
1,866,192
Taxation paid
(81,714)
(156,362)
(188,799)
(238,590)
(325,688)
(393,593)
Net cash from operating
activities
119,700
539,076
693,196
903,314
1,088,707
1,276,191
Cash flows from investing
activities
Purchases of property,
plant & equipment
–
(240,000)
(300,000)
(180,000)
(200,000)
(350,000)
Purchases of investments
–
–
(400,000)
(600,000)
(500,000)
(400,000)
Net cash used in investing
activities
–
(240,000)
(700,000)
(780,000)
(700,000)
(750,000)
Cash flows from financing
activities
Repayment of finance
leases
(7,791)
(88,761)
(99,524)
(111,592)
(125,124)
–
Net cash from financing
activities
(21,650)
123,420
(41,887)
(250,080)
(307,546)
(131,677)
Increase / (Decrease) in
cash equivalents
98,050
422,496
(48,691)
(126,766)
81,161
394,514
Cash & cash equivalents
at beginning of year
495,446
171,000
593,496
544,806
418,040
499,201
Cash & cash equivalents
at end of year
593,496 593,496 544,806 418,040 499,201 893,715
Forecast Balance Sheet:
Dec-2019 Year-
2020
Year-
2021
Year-
2022
Year-
2023
Year-
2024
Human Resources Software Company
40
ASSETS
Non-Current Assets
Software & Equipment
1,102,000
1,102,000
1,139,000
1,012,000
962,000
1,037,000
Intangible Assets
108,000
108,000
96,000
84,000
72,000
60,000
2,010,000
2,010,000
2,435,000
2,896,000
3,334,000
3,797,000
Current Assets
Inventory
202,153
202,153
209,859
219,337
241,270
265,397
Trade Receivables
432,638
432,638
467,249
504,629
555,092
610,601
Other Receivables
53,000
53,000
60,000
60,000
65,000
75,000
Cash & Cash Equivalents
593,496
593,496
544,806
418,040
499,201
893,715
1,336,288
1,336,288
1,356,914
1,277,005
1,425,563
1,894,714
Total Assets
3,346,288
3,346,288
3,791,914
4,173,005
4,759,563
5,691,714
EQUITY & LIABILITIES
Equity
Retained Earnings
761,865
761,865
1,198,799
1,750,964
2,504,700
3,415,585
761,865
761,865
1,198,799
1,750,964
2,504,700
3,415,585
Non-Current Liabilities
Finance Leases
336,239
336,239
236,716
125,124
–
–
2,248,420
2,248,420
2,246,741
2,045,209
Human Resources Software Company
41
Fore Cast Break-even
Average selling price per unit $5,000
Average cost of each unit $2,000
Gross profit margin 60%
Fixed costs $5000
sales to break even $2000
Current Liabilities
Bank Overdraft
–
–
–
–
–
–
Trade Payables
122,215
122,215
127,203
133,184
145,827
159,693
VAT Tax
62,580
62,580
61,423
68,825
76,454
84,890
Accruals
20,000
20,000
21,200
22,472
23,820
25,250
Other Accruals
60,000
60,000
66,000
50,000
70,000
80,000
Other Provisions
30,000
30,000
21,000
40,000
55,000
73,000
335,002
335,002
345,374
375,832
454,849
524,042
Total Equity & Liabilities
3,346,288
3,346,288
3,791,914
4,173,005
4,759,563
5,691,714
Human Resources Software Company
42
Financial decision
The startup capital is 100000 Sr and the borrowed capital planned is 130000. The reason of
being the capital high is the software production and maintenance which will be one of its
kinds in the market and it will require IT professional assistance. Once the software is sold to
different firms it will be an asset as the firm will grow in sales and the software cost will be
decreased. The first two years are crucial as it will be analyzed based on equilibrium point.
Another reason for the investing of money is the above study which shows that there is a high
gap of HR professionalism in the Saudi market which needs to be fulfilled. Thus, our service
will definitely be helpful for small and medium sized firms to be availing that service. From
financial analysis view though the startup capital looks high but once two to three small or
medium sized firms are joined as our customers our cost will definitely be controlled and
after that there is 100% chance of earning profit.
Human Resources Software Company
43
Conclusion
Many well-known examples of the use of information technology for competitive human
resource systems has been generated to establish an organization in the areas of Human
resources. But few have been of success as every country labour markets has some changes
based on international market changes. In general, these systems use information or
processing capabilities in small and medium sized organization to improve the performance
inside the organization. Human resource Software Company knows the areas where Saudi
market stands and what are the ways theses changes can be tackled. The future innovation in
technology will eliminate various jobs in market, and major jobs will be eliminated which
will affect companies and their employees. Human Resource software objective is to give the
clients all Human Resources services that make them successful in the areas of HR. HRSC
services will give the clients the right way to compete on the global market because
professional employees have an experience and knowledge of the trends in global market The
main objective of our project is to make the local companies compete on the global market
and be the leader of Human Resources software services in Saudi Arabia. Thus, the demand
of a need of HR software in the market of KSA will be providing service to the employees
saving their cost and time.
Human Resources Software Company
44
References
Purcell J and Hutchinson S (2007), Front-line managers as agents in the HRM-performance
causal chain: theory, analysis and evidence, Human Resource Management Journal 17(1), pp.
3-20
Purcell J (1993), The challenge of human resource management for industrial relations
research and practice, The International Journal of Human Resource Management, 4(3),
pp.511-527
Reilly P (2012), The practice of strategy, Strategic HR Review. 11(3), pp.129-135
Strauss, G. (2001). ‗HRM in the US: Correcting Some British Impressions‘, International
Journal of Human Resource Management, 12(6): 873–97.
Streeck, W. (1987). ‗The Uncertainties of Management in the Management of Uncertainty:
Employers, Labour Relations and Industrial Adjustment in the 1980s‘, Work, Employment &
Society, 1(3): 281–308.
Sturdy, A. and Fineman, S. (2001). ‗Struggles for the Control of Affect—Resistance as
Politics and Emotion‘, in A. Sturdy, I. Grugelis, and H. Willmott (eds.), Customer Service,
Empowerment and Entrapment. Basingstoke, UK: Palgrave, pp. 135–56.
Taylor, P. and Bain, P. (1999). ‗An Assembly Line in the Head: The Call Centre Labour
Process‘, Industrial Relations Journal, 30(2): 101–17.
Terry, M. (1999). ‗Systems of Collective Employee Representation in Non-Union Firms in
the UK‘, Industrial Relations Journal, 30(1): 16–30.
Tesser, A. and Rosen, S. (1975). ‗The Reluctance to Transmit Bad News‘, in L. Berkowitz
(ed.), Advances in Experimental Social Psychology, Vol. 8. New York: Academic Press, pp.
193–222.
37