Decision-making ability is one of the key factors to increase sustainability and consistent growth of the business, today we are takeing on this using rational decision-making. It is a nice way for outlining choices to set new directions for your product or business. You can then start to implement them on the basis of comparing numbers of each choice that was found greater than other choices.
Here we are taking on a scenario of a software house whose sales are declining and are looking to cope up the fallback. They are eagerly looking to start making sales within 3 to 6 months. Let’s take this assumption on how they will make new choices for their business:
Your Company has been launched and it is operational for the last six months. You are consistently paying your employees creating small IT based software products that can either resell or licensed to potential customers on a time-durational basis. However, the company is unable to make any significant sales in selling those software and having a hard time approaching new clients or making them a long-term customer. If your organization’s unable to take critical decisions immediately, then in the next 3-5 months you may lose most of your capital pumped into them because of such an unpromising profit/loss ratio.
You are the CEO, but a leader who set directions on what software or app to develop depending on the changing scenarios of business problems in your region. Now, If you keep paying your employees in such a way your financial loss could get worse. Assume you’ve decided to attack some crucial business problem in your region while keeping the buyer’s affordability and could develop a new unique solution within 2-4 months, you still have a chance to get your business on the line and make it profitable.
What steps you would take as a CEO & Managing director in building such solutions that could help improve sales and make the company stand out among all of your competitors and how you’ll able to add innovation to your business?
2- Decision Criterias:
The company must need to increase its ROI while knowing there is competition will be involved in each solution. To build any software solution there will be following necessary decision criteria:
3- Allocate Weights to the Criteria:
- Looking outside the company what competitor’s selling that requires less time & amount to build :
- Building innovation based can eventually change whole dynamics of the company and can turn into highly profitable but big investment needed.
- The idea for Traditional software products are usually based on building things cheaply so any company can anyone afford them however ROI would be lesser, but they may not require much time as you have already built for someone else and a bit of customization needed.
Hence, from the knowing all above, we have given the weights to criteria Profitability is a big concern so weight rate as high as 0.6, Time 0.1, Amount 0.1 and Competition 0.2 and yes these are all of our own assumptions. You can decide on whatever number is best using your judgment.
4- Develop the Alternatives:
|Watch out Competitor’s Selling product||9||5||7||4|
The company can build:
- Traditional software has a very heavy competition that is why ROI is not that good. Yet that software takes less time and money. Hiring research analyst/marketing assistant who will watch out the competitor’s selling trends to help the company get development ideas with a report.
- Innovation based software or application that solve crucial business problems like Foodpanda, Careem, and Daraz.pk have higher ROI yet they need extensive research and expertise. Such app development could massively increase profit if succeed require more time, money and bigger system development team. In the case of developing an innovation-based solution, you can look out for investors to fulfill the high cost of development and R&D. For innovative based software, you want to avoid the cost of training so you can go ahead outsource such development tasks but
- The company can look outside watch out for what’s actually selling better from competitors you can hire research
5- Evaluate the Alternatives:
- Due to short funds, rather than hiring marketing assistant you could self survey outside for competitor selling product to save cost
- Ideas might be rejected by investor so you’ll have an alternative business problem solution ideas. It will be like restart, that require more creative thinking and innovative minds
- Outsourcing can save the cost of training and quickly help you reach the most eligible person for the tasks could be risky as well.
|Time (0.1)||Cost (0.2)||Profitability (0.5)||Competition (0.2)|
|Watch out Competitor’s Selling product||
9 * 0.1 =0.9
|5 * 0.2 = 1||7 * 0.5 = 3.5||4 * 0.2 = 0.8||
2 * 0.1 = 0.2
|3 * 0.2 =0.6||8 * 0.5 = 4||9 * 0.2 = 1.8||
5* 0.1 = 1
|7 * 0.2 = 1.4||6 * 0.5 = 3||5 * 0.2 = 1||
So, What’s the Optimal Solution?
The most optimal solution is to build software that competitor’s built and sold the most but without copying it completely. Because, it is very easy, quick to research and cost-effective as compared to working on an innovative solution, which requires heavy investments. As it’s common that startup can fail, means all of the investor capital will be gone in the air. Thus, for a limited budget it might not be a good idea and too risky to try, however, still worth the risk, if you capable of.