Alternative Technologically Advanced System Incorporated

Start Up Business Summary

Meeting Summary: September 8, 2011 JJ Vazquez

ATA Systems Incorporated is a Security Product and Service Provider specializing incapacitating security products.

Contents
Introduction .............................................................................................................................................. 3 Description ................................................................................................................................................ 3 Census Data............................................................................................................................................... 3 Business Indicators.................................................................................................................................... 4 Business Support System (BSS) ................................................................................................................. 5 Outsource Guideline ................................................................................................................................. 6 Metrics ...................................................................................................................................................... 7 Methodologies .......................................................................................................................................... 7 Service Culture ...................................................................................................................................... 7 Reward and Recognition ....................................................................................................................... 8 Lean Six Sigma ....................................................................................................................................... 8 Business and Operational Overview ......................................................................................................... 9 Sales .................................................................................................................................................... 10 Customer Account .................................................................................................................................. 11 Customer type..................................................................................................................................... 11 Contract information .............................................................................................................................. 11 Call Center ............................................................................................................................................... 11 Billing and Collections ............................................................................................................................. 12

Page

THE PLAZA NORTH TOWER 121 SOUTH ORANGE AVENUE SUITE 1110 N ORLANDO, FLORIDA 32801

ATA Systems Incorporated is a Security Product and Service Provider specializing incapacitating security products.

Business Summary
Date
September 15, 2011

Introduction
ATA Systems Incorporated is headquartered in Orlando Florida, USA with offices in Santiago, Dominican Republic, Middle East, Argentina, Brazil, Colombia, Mexico, and Panama. It is a Security Product and Service Provider with an international scope, holding rights to all ATA Products in Europe, North, Central, and South America. ATA specialize in the manufacturing and distributing of incapacitating security products ranging from security systems to personal protection devices. We are currently selling in throughout Europe, North America, Central America and South America and continue to expand globally. We strive to supply our customers with security products that offer results, providing products that are as reliable as they are effective.

Description
ATA Systems Incorporated (ATA) has a need to launch a commercial and operational strategy to perform all facets of the business cycle in new territories from sales to bill. The need requires to develop procedures to manage inventory control, product and service logistic, market research, sales and distribution channels, installations and technical support, customer service and quality standards, among other activities. Currently, ATA is looking for an integrated and unified plan to start up operations efficiently, effectively, and comprehensively in new markets in Latin America and Puerto Rico. ATA, therefore, is soliciting a summarize business plan to help the start up implementation process and satisfy the corporate quality standards and requirements.

Census Data
Data for Puerto Rico show that the five most heavily populated places and their 2010 Census counts are San Juan, 381,931; Bayamn, 185,996; Carolina, 157,832; Ponce, 132,502; and Caguas, 82,243. The largest municipality is San Juan, with a population of 395,326. Its population decreased by 9.0 percent since 2000. The other municipalities in the top five include Bayamn, with a population of 208,116 (decrease of 7.1 percent); Carolina, 176,762 (decrease of 5.0 percent); Ponce, 166,327 (decrease of 10.8 percent); and Caguas, 142,893 (increase of 1.7 percent).

Page

THE PLAZA NORTH TOWER 121 SOUTH ORANGE AVENUE SUITE 1110 N ORLANDO, FLORIDA 32801

ATA Systems Incorporated is a Security Product and Service Provider specializing incapacitating security products.

Business Indicators
Business indicators are used by organizations to evaluate its success or the success of a particular activity in which it is engaged. Sometimes success is defined in terms of making progress toward strategic goals, but often, success is simply the repeated achievement of some level of operational goal (For example, zero defects, 10/10 customer satisfaction, etc.). 1. Subscriber Acquisition Cost (SAC) is the average cost of signing up a new customer like advertisement, commissions, installation fee, and equipment. Service companies frequently pay incentives to retailers who bring in customers to monthly recurring payment plans. They also usually subsidies the costs of equipment and installations charges (Heavily so in the case of contract customers). 2. Average Revenue per User (ARPU) is a measure most often used by telecommunications companies, although it is also sometimes used by others in similar industries. It states how much money the company makes from the average user. This is the revenue from the services provided divided by the number of users buying those services. ARPU is important because it provides a breakdown of what is driving revenue growth, and it also gives some indications of what is driving margins. Growing by increasing revenues from users tends to be better for margins than increasing revenues by increasing the user base, as the latter incurs additional costs. ARPU growth can also indicate how successful a company is being in moving users to new services that are regarded as strategically important and an indicator of how margins will fare (Newer services tend to be higher margin). 3. Churn is the proportion of subscribers to a service who cancel it but are replaced by new subscribers over a given period of time. It is most often disclosed by media and telecom companies. Suppose ATA has a million customers. Of these 50,000 (5%) cancel their subscriptions over the course of a year. Over the same year it gains 70,000 new customers. It ends the year with 20,000 more customers than at the beginning of the year. This means that its customers numbers grew by 20,000 or 2% and it had a customers churn of 50,000 or 5%. a. Churn is important as it measures customer loyalty, and therefore how stable a company's subscription revenues are likely to be if sales growth flags. 4. Return of investment (ROI) is one way of considering profits in relation to capital invested. This indicator is very useful for big account sales where the initial investment is higher than standard products. a. Each project should include the financial scope before sales completion. 5. Service level agreement (SLA) use to refer to the contracted delivery time (of the service) or performance. As an example, security providers will commonly include service level agreements within the terms of their contracts with customers to define the level(s) of service being sold in plain language terms. In this case the SLA will typically have a technical definition in terms of meantime between sales and installation, meantime between service requests to completion, timeframe to answer a service call at a call center, etc
THE PLAZA NORTH TOWER 121 SOUTH ORANGE AVENUE SUITE 1110 N ORLANDO, FLORIDA 32801

Page

ATA Systems Incorporated is a Security Product and Service Provider specializing incapacitating security products.

Business Support System (BSS)

The system must have wholesale functionality with remote access and web interface for customers. The role of business support systems in a service company is to cover the following main areas: 1. Inventory Control to manage and locate objects or materials and facilitate the supervision of supply, storage and accessibility of items in order to ensure an adequate supply without excessive oversupply. 2. Product Management - supports product development, sales and management of products, discounts and appropriate pricing, offers and bundles to businesses and mass-market customers. 3. Customer Management - service corporations require a single view of the customer and regularly need to support complex hierarchies across customer-facing applications (CRM Customer Relationship Management). Customer management also covers requirements for partner management and 24x7 web-based customers self-service. Customer management can also be thought of as full-fledged customer relationship management systems implemented to help customer care agents handle the customers in a better and more informed manner. a. A CRM system may be chosen because it is thought to provide the following advantages: i. Quality and efficiency ii. Decrease in overall costs iii. Decision support and enterprise agility iv. Customer Attention b. CRM is a widely implemented strategy for managing a companys interactions with customers, clients, and sales prospects. It involves using technology to organize, automate, and synchronize business processes principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, catch the attention of former clients back into the fold, and reduce the costs of marketing and customer service. c. Customer relationship management describes a companywide business strategy including customer interface departments as well as other departments. Measuring and valuing customer relationships is critical to implementing this strategy. 4. Order Management - as a beginning of assurance is normally associated with Operational Support Systems though Business Support Systems are often the business driver for fulfillment management and order provisioning. a. Operational Support System (OSS) - this term in telecommunications is more oriented to the networks elements; probably in this case it does not apply. 5. Trouble Ticket - maintains lists of issues, as needed by an organization. Tracking systems are commonly used in an organization's customer support call center to create, update, and resolve reported customer issues, or even issues reported by that organization's other employees. 6. Revenue Management - is a BSS focus on billing, charging and settlement that can handle any combination of services, products and offers. BSS revenue management supports service order provisioning and often partner settlement. Billing is an integral function offered by BSS systems. 7. Workflow - consists of a sequence of connected steps. It is a depiction of a sequence of operations, declared as work of a person, a group of persons, an organization of staff, or one or more simple or complex mechanisms.
THE PLAZA NORTH TOWER 121 SOUTH ORANGE AVENUE SUITE 1110 N ORLANDO, FLORIDA 32801

Page

ATA Systems Incorporated is a Security Product and Service Provider specializing incapacitating security products.

Outsource Guideline
The following guideline contains areas to analyze for outsourcing or formalize a professional service agreement with a supplier and to set rules to contract outsource services by ATA for business functions with an external provider such as distributors, franchiser and installers among others. Request the following information to each vendor: a. Founded Date b. Years Proposed Solution have been on the Market c. Number of Employees (Exempt, Hourly and Outsource Agreements) d. Location of Headquarters, Operations e. Number of Customers i. New last three years ii. Lost last three years f. List whether you have international customers and if so, where are they located g. Previous year Annual Income (Percentage) h. Provide three References Selection criteria will use the following guideline: Cost to value Fulfillment of solution requirements Product and/or services maturity Demonstrate level of service and performance Completeness, timeliness, and feasibility of proposed solution Vendors industry reputation and experience Vendors account team organization and experience Quality assurance commitment Vendors financial strength and proven success Training and certification Vendors ability to adhere to the contractual requirements Examples of customer referrals Flexibility of contract and financial terms

ATA does not represent the above items to be the complete set of decision criteria and reserves the right to adjust the criteria at any time at its discretion. ATA is committed to fairness, but is under no obligation to reveal how proposals are assessed or to provide specific information relative to the decision-making process. Evaluations shall be based on all elements of the response, including intangible factors such as ATA experience or perception of each vendors ability to meet its commitments. While cost shall remain a critical decision factor, satisfaction of business and technical requirements, quality and level of service, and the expected operating efficiencies are of equal importance. ATA shall select the solution providing the best overall value.

Page

THE PLAZA NORTH TOWER 121 SOUTH ORANGE AVENUE SUITE 1110 N ORLANDO, FLORIDA 32801

ATA Systems Incorporated is a Security Product and Service Provider specializing incapacitating security products.

Metrics
Long term business success will be achieved by setting up business indicators. The goal is oriented to create a set of practices designed to improve processes and minimize deficiencies. Example: A new service order should be measure to track areas to improve timeframe and maximize revenue generation from sales to bill assuring quality standards. Sales date Operations approval date a. Quantify rejects and root causes Order submission for: a. Installations New orders and add services to existing customer b. Re-fill equipment or material on existing customer or distributors Customer appointment confirmation Installation or delivery date a. Quantify change date orders and reasons Completion date Customer acceptance a. If applies, warranty and root causes Quality assurance a. Inspection or survey Billing Date Collections

Methodologies
The company needs a guideline for solving a problem, manages service standards and measure performance with specific components such as phases, tasks, methods, techniques and tools. Service Culture Among other things, a culture includes values, beliefs, norms, rituals, and practices of a group or an organization. Any policy, process or procedure, action, or inaction from an organization, and its employees contribute to the service culture. Most importantly, each employee plays a key role in communicating the culture to its customers. This may include such things as personal appearance, the way employees interact with customers, and service provider's knowledge, skill and attitude level. Culture also encompasses an organization's products and services, and the physical appearance of the organization's facility, equipment, or any other aspect of the organization with which the customer comes into contact. Some qualities of service culture are: 1. Extend a warm welcome 2. Anticipate and fulfill stated and unstated needs 3. Provide a fond farewell
THE PLAZA NORTH TOWER 121 SOUTH ORANGE AVENUE SUITE 1110 N ORLANDO, FLORIDA 32801

Page

ATA Systems Incorporated is a Security Product and Service Provider specializing incapacitating security products.

Reward and Recognition When you survey your customers on the quality of service, make sure that everyone, from the top down, knows the results and receives recognition for the things that are going well. Behavioral research has shown that you get more of the employee by the behavior you reward. Lean Six Sigma Lean principles Specify what creates value from the customers perspective Identify all the steps along the process chain Make those processes flow Make only what is required from the customer Strive for perfection by continually removing wastes Seven (7) types of waste Transport - moving products that are not actually required to perform the processing Inventory - all components, work in process and finished product not being processed Motion - people or equipment moving or walking more than is required to perform the processing Waiting - waiting for the next production step Over Production - production ahead of demand Over Processing - resulting from poor tool or product design creating activity Defects - the effort involved in inspecting for and fixing defects Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes. The methodology requires five phases known as the DMAIC. The DMAIC project methodology has five phases:

Define the problem, the voice of the customer, and the project goals, specifically. Measure key aspects of the current process and collect relevant data. Analyze the data to investigate and verify cause-and-effect relationships. Determine what the relationships are, and attempt to ensure that all factors have been considered. Seek out root cause of the defect under investigation. Improve or optimize the current process based upon data analysis using techniques such as design of experiments, poka yoke or mistake proofing, and standard work to create a new, future state process. Set up pilot runs to establish process capability. Control the future state process to ensure that any deviations from target are corrected before they result in defects. Implement control systems such as statistical process control, production boards, visual workplaces, and continuously monitor the process.

Page

THE PLAZA NORTH TOWER 121 SOUTH ORANGE AVENUE SUITE 1110 N ORLANDO, FLORIDA 32801

ATA Systems Incorporated is a Security Product and Service Provider specializing incapacitating security products.

Business and Operational Overview

There are components that an organization uses to run its business operations towards customer and profit. The main areas to document procedures, set business rules, and key performance indicators (KPI) are: 1. Commercial definition a. Pre-paid (no risk) versus pos-paid (financing) b. Market share/customer base versus less volume more profitability c. Others 2. Product catalog and pricing 3. Leads and prospects a. Opportunities of new customers 4. Pre Sales For big accounts or non standard products a. Site survey b. Project Managers 5. Inventory control 6. Sales a. Credit reference 7. Account management a. Welcome call b. Document digitalization c. Fraud control Subscription fraud, sales estimations or missing documentation, payments and adjustment patterns 8. Service orders 9. Installations 10. Quality assurance 11. Trouble tickets 12. Billing Multiple contacts and address 13. Revenue assurance 14. Commissions Charge back 15. Payments 16. Customer service a. Service order follow up b. Trouble tickets follow up c. Billing and payments issues d. Others 17. Pos sales 18. Customer base retention 19. Accounting interface 20. Reporting and/or Business Intelligence
THE PLAZA NORTH TOWER 121 SOUTH ORANGE AVENUE SUITE 1110 N ORLANDO, FLORIDA 32801

Page

ATA Systems Incorporated is a Security Product and Service Provider specializing incapacitating security products.

Sales There are different ways to build a sales department using your own employees or outsourcing the sales process. Most of the professional on this field have a monthly quota and receive commissions from their results. Quality standards and service culture are important elements to be clear during the sales process and customer expectations. Direct Sales o Stores o Kiosks o Tele Sales For this scenario ATA will need to create a commission plan based on quotas and projections. Hiring, supervision, and performance evaluations are made by ATA. 1. Commissions examples: Upfront payment on the sale Usually used for residential products and services. Its also use for projects with long installation time frames in order to keep the Sales Consultant motivated while the account starts billing. Recurrent commission The model is to minimize future retention efforts establishing long term business relations with the customer. The model assigns service follow up and customer relation to the Sales Consultant receiving a recurrent commission of the payment received. This commissions model is used very often for corporate accounts. The company can use both scenarios at the same time, but its very important to set charge back rules for non payments accounts and other scenarios. Sales Channels are independent contractor or employees from ATA but with a mutual agreement. o There are multiple business model: Authorize dealer Distributor 1. Commission example: Authorize dealer will buy the inventory to ATA at a wholesale pricing. The dealer commission will be the sales price margin and the first invoice monthly recurrent charge. Consignation model is also used but more risky depending on the Point of Sales.

Page

THE PLAZA NORTH TOWER 121 SOUTH ORANGE AVENUE SUITE 1110 N ORLANDO, FLORIDA 32801

10

ATA Systems Incorporated is a Security Product and Service Provider specializing incapacitating security products.

Customer Account
The information will be stored in the CRM to manage additional information regarding the customer. Customer type We can classify customer type depending on the corporate needs. There are three main types we used to classify customers: 1. Residential 2. Business o Small accounts o Major accounts 3. Government

Contract information
This area will be use to add the information regarding the contract date and expiration date for renewal purposes. This information is very important for Government accounts with monthly recurring services, warranties, and for customer service renewal efforts.

Call Center
Call recording, IVR and skills functionality to maximize resources, available 24 hours a day, 7 days a week to assist in the following areas: Welcome call Service Acceptance Billing inquiries Balance due Invoice requests Updating emergency contact information Modifying account information Monitoring questions Customer referrals Equipment repair System operation Payments Request new products and services Relocations Contract transfer

Page

THE PLAZA NORTH TOWER 121 SOUTH ORANGE AVENUE SUITE 1110 N ORLANDO, FLORIDA 32801

11

ATA Systems Incorporated is a Security Product and Service Provider specializing incapacitating security products.

Billing and Collections

Billing is the legal document to start the collection process for a service followed by the sale process. The invoice needs to be sent to the customer and we need to assure receiving. Multiple delivery options o United States Postal Service (USPS) - Postal address o Email address PDFs E bill Electronic files o CD or other media source Returned mail module to quantify and fix non receipt envelopes by customers o Confirm delivery to assure payment and cash flow. Multiple cycles Messaging o Include messages in the invoice about new offers and services o Classify messages by customer type Discounts for: o Paperless invoice o Direct debit or auto payment o Pay in advance discount (lower risk) Multiple payment options o Lockbox o Direct debit to Credit card Savings and check bank accounts (ACH) o Website Customer self-care o Stores and dealers payment stations o Call center o Among others Collections process o Outgoing call and customer contact efforts o Service suspension letters o Service suspension o Service termination o Collection agency legal action referral Minimize bad debts

Page

THE PLAZA NORTH TOWER 121 SOUTH ORANGE AVENUE SUITE 1110 N ORLANDO, FLORIDA 32801

12