In order to capitalise on the large, growing market for software, cloud and services, SoftwareOne aims to drive profitable growth by growing and digitising Software & Cloud Marketplace, cross-selling and up-selling services, expanding our portfolio to serve clients’ digital journeys and scaling our global-local operating model. We will also continue to add capabilities and gain geographic reach via a strategic M&A programme.
Five strategic pillars to drive profitable growth
Grow and digitise Software & Cloud Marketplace
We aim to grow our Software & Cloud Marketplace business line by acquiring new clients and leveraging our existing 65,000-strong client base, which continues to provide additional revenue potential through contract renewals, volume and feature upgrades and growing SaaS and cloud adoption.
We are also enhancing our delivery model to offer clients the fastest and most digital purchasing experience based on a client-centric and expertise-led approach. Depending on client needs, we offer the traditional route, self-service or a dedicated approach for more complex requests. In addition, larger clients who want to outsource the procurement of their tail-end software and cloud spend can choose Software Sourcing Services.
While we offer multiple delivery models today, our vision for the future is to disrupt the market by creating a digital marketplace with Goatpath.
Cross-sell and up-sell services
With Software & Cloud Marketplace as our ‘engine’, we seek to cross-sell and up-sell services to existing clients to increase the number of clients who purchase both software and services to drive share of wallet and the proportion of recurring revenues. In addition, we aim to go deeper with selected high-value clients, taking a multi-service line or ‘land, deliver and expand’ approach.
In 2022, 71% of gross profit was generated by 16.5k clients who purchased from both our business lines, up from 15.3k a year ago.
Expand portfolio to serve clients’ digital journeys
We continue to invest in our cloud-only services portfolio to further enhance our ability to comprehensively serve clients' digital journeys. More specifically, we continue to develop IP-enabled, differentiated services, such as Cloud Services, Application Services and SAP Services which offer attractive growth potential over the coming years.
After partnering with leaders in the education, not-for-profit and construction sectors, we also continue to evaluate other industries which would benefit from higher technology adoption.
Scale global-local operating model for continued profitable growth
SoftwareOne has one of the broadest geographic footprints in the industry based on centralised delivery and local presence in 90 countries. We plan to further leverage our scalable operating model, benefiting from operating leverage as we continue to grow.
In addition, we announced a new programme in 2022 to fully embed operational excellence across our organisation. The programme spans three pillars – commercial effectiveness, efficient service delivery and right-sized support functions, with different degrees of impact on growth and efficiency. With regard to commercial effectiveness, we will seek to target the right customers with the right offerings using data insights, while optimising the structure of our commercial teams. We are also progressing towards a shoring mix for optimal utilization rates across our delivery centres and capitalising on standardised, high-volume offerings for SMEs to scale profitably. Finally, we will improve productivity across our support functions by transferring transactional activities to our shared service centres and leveraging functional centres of excellence at global or regional levels.
Cost savings related to the programme are expected to be CHF 50 million on an annualised basis from 2024 onwards, with up to 50% of savings being re-invested into growth and innovation. Key areas of reinvestment include leveraging customer data and AI, digitising processes, talent and capabilities development and IP-enabled services.
Pursue M&A opportunities
SoftwareOne has a strong M&A track record and intends to continue pursuing bolt-on opportunities, particularly within Software & Cloud Services. Since our IPO in late 2019, we have completed 14 acquisitions focused on scale, geographic reach and capabilities, including two transactions in 2022.
Leveraging our experience, we have developed an effective model which allows entrepreneurs to continue building their businesses as part of SoftwareOne, while capturing integration and synergies on the back-end within a short period of time post-acquisition.