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Masters in Electronic Commerce Cloud Payroll Solutions Practicum CA550

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Masters in Electronic Commerce Cloud Payroll Solutions Practicum CA550
Masters in Electronic Commerce
Cloud Payroll Solutions
Practicum CA550
2010/2011
Mark Allen
Dara Boland
Ian Campbell
Tommie O’ Brien
Graham Tate
Declaration
We hereby certify that this material, which we now submit for assessment on the Group
Practicum (CA550) module is entirely our own work and has not been taken from the work of
others and to the extent that such work has been cited and acknowledged within the text of
our work and further more in the bibliography.
Student:
Mark Allen
Student Number:
10211382
Signature: ________________________________________Date:______________________
Student:
Dara Boland
Student Number:
56652310
Signature: ________________________________________Date:______________________
Student:
Ian Campbell
Student Number:
10210721
Signature: ________________________________________Date:______________________
Student:
Tommie O’Brien
Student Number:
57544898
Signature: ________________________________________Date:______________________
Student:
Graham Tate
Student Number:
56005292
Signature: ________________________________________Date:______________________
1
DCU Business School and Computing School Assignment Submission
Mark Allen
Dara Boland
Student Name(s):
Ian Campbell
Tommie O'Brien
Graham Tate
10211382
56652310
Student Number(s): 10210721
57544898
56005292
Programme:
MECB1 - MSc in Electronic Commerce (Business)
Project Title:
Cloud Payroll Solutions Practicum
Module code:
CA550
Module Coordinator: Dr. Cathal Gurrin
Supervisors:
Dr. Yuhui Gao and Dr. Claus Pahl
Project Due Date:
08-AUG-2011
Please find the attached disk which contains all
recordings & documentation relevant to the conducted
interviews and the minutes of team meetings.
2
Acknowledgements
Over the past few months certain people have provided the team with their time and expertise
and we wish to acknowledge the following people:
We would like to thank our practicum supervisors from both the Dublin City University
Business School and Dublin City University School of Computing, Dr. Yuhui Gao and Dr.
Claus Pahl. Both of our supervisors provided the team with their recommendations, time and
expertise in each area. The team would also like to thank Mr Gerry Conyngham from the
Dublin City University Business School for his time, help and expertise. Our thanks are also
extended to the Practicum Coordinator from the Dublin City University School of
Computing: Dr. Cathal Gurrin for his energy, enthusiasm and helpfulness throughout this
Practicum process.
The authors would also like to thank Fingal County Enterprise Board, for accepting our
application to join the “New Business Mentor” programme. Appreciations must also go to
Marc O‟Dwyer, MD of Big Red Book and Padraig Gill, MD of Intelligo Software, whom
have agreed to meet the team, to further discuss the commercialisation of CPS, on 12th and
13th of August respectively. Great thanks must be extended to the five participants themselves
who undertook the extensive research for this report. Without their endeavours the generation
of this report would have been impossible.
Finally the authors would like to thanks their friends and families for their help and support
throughout the past six months.
Mark, Dara, Ian, Tommie & Graham
3
List of Abbreviations
BCP
Business Continuity Plan
CPS
Cloud Payroll Solutions
CRM
Customer Relationship Management
CRO
Companies Registration Office
CSR
Corporate Social Responsibility
CSS
Cascading Style Sheets
CVP
Customer Value Proposition
DCU
Dublin City University
DDOS
Dedicated Denial of Service
ERP
Enterprise Resource Planning
ESRI
Economic and Social Research Institute
GP
General Practitioner
HR
Human Resources
HRIS
Human Resource Information Systems
HTML
Hyper Text Markup Language
IASC
International Accounting Standards Committee
ICT
Information and Communications Technology
IPASS
Irish Payroll Association
IS
Information Systems
ISMS
Information Security and Management System
ISO
International Organisation for Standardisation
IT
Information Technology
4
OWASP
The Open Web Application Web Security Project
PaaS
Platform as a Service
PAYE
Pay As You Earn
PCI
Payment Card Industry
PDA
Personal Digital Assistant
PRINCE2
Projects In Controlled Environments 2
PPSN
Personal Public Service Number
PRSI
Pay Related Social Insurance
PSDA
Payroll Software Developers Association
R&D
Research and Development
SaaS
Software as a Service
SEO
Search Engine Optimisation
SMAPI
Simple Messaging Application Programming Interface
SME
Small to Medium-sized Enterprises
SPI
Stateful Packet Inspection
SQL
Structured Query Language
SSL
Secure Sockets Layer
SWOT
Strengths, Weaknesses, Opportunities and Threats
USC
Universal Social Charge
USP
Unique Selling Point
VAT
Value Added Tax
WAF
Web Application Firewall
XHTML
Extensible Hyper Text Markup Language
5
Contents
Table of Figures ....................................................................................................................... 11
Executive Summary ................................................................................................................. 13
Motivation behind the Practicum ............................................................................................. 15
Management Team................................................................................................................... 16
CEO & Director of Finance – Tommie O‟Brien .................................................................. 17
Director of Human Resources and Sales – Ian Campbell .................................................... 18
Director of Operations and Sales - Graham Tate ................................................................. 20
Director of Marketing and Sales – Dara Boland .................................................................. 21
Director of IT and Information Systems – Mark Allen ........................................................ 22
Business Mission ..................................................................................................................... 24
Business Model ........................................................................................................................ 24
Primary Research .................................................................................................................. 28
Qualitative Research .............................................................................................................. 30
Objectives ......................................................................................................................... 30
Justification ....................................................................................................................... 30
Approach .......................................................................................................................... 32
Analysis of Interviews .......................................................................................................... 35
Interview 1 – Anne Marie Furlong ................................................................................... 35
Interview 2 – Moira Kelly ................................................................................................ 37
Interview 3 – Martin Clark ............................................................................................... 39
Interview 4 – Lisa Clarke ................................................................................................. 40
Interview 5 – Yvonne Clough .......................................................................................... 42
Interview 6 – Sheila Morgan & Moire O‟ Sullivan .......................................................... 44
Interview 7 – Sean Cooney ............................................................................................... 46
Interview 8 – Michael Geeney.......................................................................................... 48
Interview 9 – David Howell ............................................................................................. 50
Quantitative Research ........................................................................................................... 52
Objectives ......................................................................................................................... 52
Methodology..................................................................................................................... 52
Survey Design................................................................................................................... 52
Methodology..................................................................................................................... 55
Integrating Qualitative and Quantitative .............................................................................. 56
Key Findings..................................................................................................................... 56
6
Market Analysis ..................................................................................................................... 66
Introduction .......................................................................................................................... 67
Marketing Process ................................................................................................................ 67
Market Analysis ................................................................................................................... 68
Sector ................................................................................................................................ 68
Market Size ....................................................................................................................... 68
Customers ......................................................................................................................... 69
Buyer Behaviour ............................................................................................................... 69
Marketing Strategy ............................................................................................................... 70
Market Segment Identification ......................................................................................... 71
Target Market Strategies .................................................................................................. 71
Concentrated Marketing ................................................................................................... 72
Brand Positioning ............................................................................................................. 72
Marketing Mix...................................................................................................................... 73
Product .............................................................................................................................. 73
Price .................................................................................................................................. 74
Place.................................................................................................................................. 75
Promotion ......................................................................................................................... 75
Digital Marketing Strategy ................................................................................................... 79
Website and Search Engine Optimisation ............................................................................ 80
Content.............................................................................................................................. 80
Heading Tags .................................................................................................................... 80
Keywords .......................................................................................................................... 81
Image Use ......................................................................................................................... 81
Linking Social Media ....................................................................................................... 81
Social Media........................................................................................................................ 83
Paid Advertising ................................................................................................................... 89
Google AdWords .............................................................................................................. 89
Paid Google Advertisements ............................................................................................ 90
Analytics............................................................................................................................... 91
Sales Management................................................................................................................ 92
Google Apps and Sales Management ............................................................................... 93
Personal Selling ................................................................................................................ 94
7
Industry Analysis ................................................................................................................... 98
Associated Software ............................................................................................................. 98
ERP ................................................................................................................................... 98
HRIS ................................................................................................................................. 99
Accounting Software ........................................................................................................ 99
Alternatives to CPS Payroll Software .............................................................................. 99
Competitors ........................................................................................................................ 101
Competitor Analysis ....................................................................................................... 102
PESTEL Analysis ............................................................................................................... 104
Strategic Group Mapping ................................................................................................... 105
Key Industry Success Factors ............................................................................................ 107
SWOT Analysis.................................................................................................................. 108
Competitive Advantage ...................................................................................................... 109
Sustainability of Competitive advantage ........................................................................ 109
Value Chain ........................................................................................................................ 110
Ansoff Matrix ..................................................................................................................... 111
Porter‟s Generic Strategies ................................................................................................. 112
Cost Leadership .............................................................................................................. 113
Differentiation ................................................................................................................ 113
Finances ................................................................................................................................ 115
CPS Financial Information ................................................................................................. 116
The Revenue Model: ...................................................................................................... 116
Financial Assumptions: .................................................................................................. 118
Grant Aid ........................................................................................................................ 119
Further Investment .......................................................................................................... 119
Costs: .............................................................................................................................. 119
Cash-flow Statements: Year 1, 2 and 3 of Trading ........................................................ 123
Profit and loss accounts .................................................................................................. 126
Forecasted Balance sheets for Year 1, 2 and 3 of Trading ............................................. 130
Sales Forecast: Trading years 1 – 3 ................................................................................ 130
Forecasted Sales each Month for Years 1, 2 and 3:........................................................ 132
Break even Analysis Year 1, 2 and 3 of trading: ............................................................ 132
Location: DCU Invent .................................................................................................... 134
8
Legal Considerations ........................................................................................................... 136
Data Protection ................................................................................................................... 137
Data Protection Act (1988 & 2003) ................................................................................ 137
European Communities (Electronic Communications Networks and Services) (Data
Protection and Privacy) Regulations 2003 ..................................................................... 138
Incorporating the Company ............................................................................................ 139
Employment.................................................................................................................... 139
Insurance ......................................................................................................................... 140
Revenue Compliance.......................................................................................................... 141
Budget Updates & Tax Forms ........................................................................................ 141
Corporation Tax & PRSI ................................................................................................ 141
Corporate Social Responsibility ............................................................................................ 142
The Benefits of CSR .......................................................................................................... 142
Objectives & Requirements ............................................................................................... 143
Technology Plan ................................................................................................................... 145
Cloud Computing Future Trends ....................................................................................... 145
Web Browsing Future Trends ............................................................................................ 146
Web Application Firewalls................................................................................................. 147
Database Firewalls ............................................................................................................. 147
Risk Management and Business Continuity Plan .................................................................. 148
Identify major risks of business interruption...................................................................... 148
Develop a plan to mitigate or reduce the impact of the identified risk .............................. 149
Train employees and test the plan to ensure that it is effective.......................................... 150
Why Microsoft Windows Azure? .......................................................................................... 151
Interface Design ..................................................................................................................... 153
Navigation .......................................................................................................................... 154
Error Prevention ................................................................................................................. 156
Conviviality ........................................................................................................................ 158
Application Security .............................................................................................................. 159
1.
Confidentiality ............................................................................................................ 159
2.
Integrity ....................................................................................................................... 160
3.
Authentication ............................................................................................................. 160
4.
Non-repudiation .......................................................................................................... 160
5.
Access Controls .......................................................................................................... 160
9
Application Pseudo code........................................................................................................ 162
Employee Class .................................................................................................................. 162
Set Period Class.................................................................................................................. 163
Timesheet Calculation Class .............................................................................................. 163
Payslip Class ...................................................................................................................... 164
Reports Class ...................................................................................................................... 164
Future Recommendations ...................................................................................................... 166
Entering the UK: ................................................................................................................ 166
Additional Features: ........................................................................................................... 166
Potential sale of the company: ........................................................................................... 167
Group Reflection on the Practicum Module .......................................................................... 168
Project Management ........................................................................................................... 168
Teamwork........................................................................................................................... 169
Knowledge from Other Modules........................................................................................ 169
Bibliography ......................................................................................................................... 171
Appendices ............................................................................................................................ 180
Appendix A: Ansoff Matrix .............................................................................................. 181
Appendix B: Brand Positioning Statement ........................................................................ 182
Appendix C: From Software as a Product (SaaP) to Software as a Service (SaaS). .......... 183
Appendix D: Competitor List for CPS ............................................................................... 184
Appendix E: Porter‟s Five Forces for CPS ........................................................................ 186
Appendix F: PESTLE Analysis for CPS ............................................................................ 187
Appendix G: SWOT Analysis for CPS .............................................................................. 188
Appendix H: The Value Chain for CPS ............................................................................. 189
Appendix I: Financial Costs Appendices: .......................................................................... 190
Appendix J: Sample Sales Script for CPS Employees/Directors ....................................... 192
Appendix K: System Architecture ..................................................................................... 196
Appendix L: Example CPS Press Release ......................................................................... 197
Appendix M: Search Engine Marketing for CPS ............................................................... 198
Appendix N: Fingal Enterprise Meeting ............................................................................ 211
Appendix O: Survey Cover Letter and Questionnaire ....................................................... 212
Appendix P– Cloud Payroll Solutions Poster .................................................................... 221
10
Table of Figures
Figure 1: CPS Management Team Hierarchy .......................................................................... 16
Figure 2: Process Chart of Proposed System ........................................................................... 27
Figure 3: Summary of Qualitative Interviews ......................................................................... 34
Figure 4: Survey Design Process (Wilson, 2006) .................................................................... 53
Figure 5: Main Competitors ..................................................................................................... 57
Figure 6: Frequency of Salary Payment................................................................................... 58
Figure 7: Current Payroll System Cost .................................................................................... 58
Figure 8: Customer Service Rating .......................................................................................... 59
Figure 9: Customer Service Contact ........................................................................................ 60
Figure 10: Willingness to Switch Provider .............................................................................. 61
Figure 11: Respondents Reason for Switching ........................................................................ 62
Figure 12: Potential Price for CPS ........................................................................................... 62
Figure 13: Privacy and Security Issues .................................................................................... 63
Figure 14: Potential Phone App ............................................................................................... 64
Figure 15: The Marketing Process ........................................................................................... 68
Figure 16: Key Competitors..................................................................................................... 69
Figure 17: Segmentation Benefits ............................................................................................ 71
Figure 18: Target Marketing Strategies ................................................................................... 72
Figure 19: The Marketing Mix ................................................................................................ 73
Figure 20: The Promotional Tools ........................................................................................... 76
Figure 21: Benefits of SEO ...................................................................................................... 80
Figure 22: Website Navigation Bar ......................................................................................... 81
Figure 23: Alternative Tag for Images ..................................................................................... 81
Figure 24: CPS Twitter Page ................................................................................................... 82
Figure 25: CPS Facebook Insights ........................................................................................... 83
Figure 26: CPS Facebook Page, Free Trial .............................................................................. 85
Figure 27: CPS Twitter Feed ................................................................................................... 86
Figure 28: CPS YouTube Channel .......................................................................................... 87
Figure 29: Screenshot of CPS Flickr Account ......................................................................... 88
Figure 30: Google 'Payroll Ireland' Search Results ................................................................. 89
Figure 31: Sample Keywords from Adwords Campaign ......................................................... 90
Figure 32: Payroll Google Search ............................................................................................ 91
11
Figure 33: Comparing Two Metrics in Google Analytics ....................................................... 92
Figure 34: Screenshot of Smartsheet ....................................................................................... 93
Figure 35: Screenshot of Nutshell Interface ............................................................................ 93
Figure 36: CPS - 7 Step Process .............................................................................................. 95
Figure 37: Pros & Cons of Payroll Service ............................................................................ 101
Figure 38: Competitive Rivalry ............................................................................................. 103
Figure 39: Strategic Group Mapping ..................................................................................... 105
Figure 40: Similar Sized Competitors.................................................................................... 105
Figure 41: Larger Competitors............................................................................................... 106
Figure 42: CSF's of Successful Firms .................................................................................... 107
Figure 43: Ansoff Matrix ....................................................................................................... 111
Figure 44: Porter's Generic Strategies ................................................................................... 112
Figure 45: Pricing Strategy Matrix ........................................................................................ 114
Figure 46: Monthly Subscription Forecast Years 1 - 3 .......................................................... 116
Figure 47: Sales Forecast ....................................................................................................... 117
Figure 48: Annual PRSI Payments ........................................................................................ 121
Figure 49: Annual Forecasted VAT Payments ...................................................................... 122
Figure 50: Forecasted Turnover - Years 1 - 3 ........................................................................ 129
Figure 51: Web Browsers Market Share ................................................................................ 147
Figure 52: Navigation Structure of Homepage ...................................................................... 155
Figure 53: Navigation Structure for Employee Details ......................................................... 156
Figure 54: Add New Employee ............................................................................................. 156
Figure 55: Timesheet Entry Page ........................................................................................... 157
Figure 56: Set Payroll Period ................................................................................................. 157
Figure 57: Links to Social Media........................................................................................... 158
12
Executive Summary
Cloud Payroll Solutions Ltd. (CPS) is a new company, established with the expressed aim
to develop and distribute; Ireland‟s first cloud based payroll software to the SME sector.
Delivered over the internet, the CPS product is defined as a Software as a Service (SaaS).
This model facilitates substantial cost savings over its packaged software counterparts. Core
to the company offering is; simplicity. The company slogan; “Payroll Made Easy”, underlines
the software‟s inherent usability. This element of user friendliness, coupled with its
associated efficiency of service, represents the crux of the product offering. CPS payroll will
sell at €99.99 (excl. VAT), a price approximately 30% below that of current market leading
payroll software.
As the authors near completion of Dublin City University‟s Masters in E-Commerce, the
following document illustrates the practical application of curricular learning. CPS satisfies
the MECB practicum guidelines in that it represents an innovative e-commerce system which
solves a real-world problem whilst also exploiting a potential real-world opportunity.
The report firstly introduces the business concept, followed by an introduction to the
Management Team. It progresses to explain the SaaS business model, which CPS will
pioneer for the Irish payroll software (SME) market.
All CPS commercialisation initiatives derive from a solid foundation of both qualitative and
quantitative research. The associated sections illustrates each research stage involved in the
interviewing of nine participants and conducting quantitative surveys with a further thirtyfive participants (Employees or Business Owners of companies with less than 35 employees).
Key survey findings included; a majority used Sage payroll, with Big Red Book and
Thesaurus being the second and third most used providers. 28.3% of respondents paid €100€200 annual subscription for payroll software, with a further 15.2% paying €201-€300. The
question: “are you willing to switch from your current payroll software provider?” resulted in
56% of respondents expressing a willingness to switch, by selecting “yes” or “maybe”.
“Significant annual costs savings” was recorded as being the factor which would best prompt
a change to new software.
The following section analyses and critically evaluates the market environments, in which
CPS will operate. Also, an evaluation of the strategic and operational orientation as well as
13
the strengths and weaknesses of CPS are expatiated upon. Based on the derived
extrapolations, recommendations for future direction and implementation of marketing
activity are presented. Key to meeting objectives of building sales and market share, CPS
outline an extensive digital marketing strategy, which complements other marketing efforts
including free trial sales promotion and personal selling.
The Financial analysis outlines the company‟s projections for initial losses in year 1 of
€22,558 to year 3 end profits of €31,241. CPS will break even after 16 months of operation,
after securing 1,125 subscriptions.
The following section considers legal issues and highlights the essentiality of CPS controlling
where clients payroll data is stored. Discussed is how Microsoft Azure customers choose
where such data is held. This combined with a cited; “robust availability” and a detailed
discussion on internet security are noted as key reasons for choosing this platform to host
CPS payroll.
The next section highlights CPS, as it will emerge as a prospering company which may take
many strategic directions. Discussed here are potential strategies, which include a potential
international expansion, to the UK market, in year four. The final (main body) section of the
report offers a reflective insight related to teamwork and project management.
14
Motivation behind the Practicum
The management team held their first meeting at the beginning of 2011 to decide upon a
concept for the group practicum. A number of possible areas were discussed in relation to the
idea for example cloud computing, mobile marketing and phone application. The team
decided upon cloud computing as the chosen area because of the growing business potential
in the discipline.
Research shows that cloud computing is a “major evolving industry that will revolutionise
how businesses run their operations and deliver products or services” (Goodbody Report
2011). This report also predicted that companies involved in cloud computing could generate
revenues of approximately €9.5 billion per year by 2014. Ireland has been ear-marked as an
ideal base for the location of firms operating in the cloud. The management team felt that
there was an opportunity to construct a business plan for a cloud based system using software
as a service (SaaS) model.
The team held a brainstorming session in order to identify what specific service they could
develop using the SaaS model. Originally, the team considered developing a system that
would allow patients to renew their prescriptions with their GP using a SaaS system. The
system design would allow GP‟s to login to the system and renew their patients‟
prescriptions. Following further research and consideration, the team decided that the
legislative restrictions relating to providing prescriptions to patients would not make this
service viable. Furthermore, none of the team members had experience in the
medical/pharmaceutical industry and this was perceived to be a major drawback in pursuing
this type of service.
The idea of creating a low cost payroll service that operated over the cloud was then
identified. The team felt that cloud computing could provide a number of benefits to the end
user as it would be (1) cheaper (2) maintain an automatic record of every pay period
processed through the system and (3) would allow the user to access their payroll remotely
once they had internet connection.
15
One member of the team previously worked in technical support for Sage Ireland and so had
an implicit knowledge of the payroll service industry. Another member of the team also had
experience in executing payroll for a company in their previous employment.
The perceived opportunity of the system, couple with the experience of the team within this
specific area meant that „Cloud Payroll Solutions‟ was conceived.
Management Team
The CPS management team is comprised of five aspiring entrepreneurs. Each founding
member of CPS has an equal share of twenty-per cent in the company. Each member of the
management team shall have an individual title and will strive to improve and promote the
company to the best of their abilities within their department. The five founding members of
CPS shall be referred to as „the management team‟ throughout the report. Each member has
been willingly allocated a department based on their previous work experience, knowledge
and education thus far. The following diagram displays how the company will initially be
organised.
Figure 1: CPS Management Team Hierarchy
CEO & Director of
Finance
Director of Human
Resources and
Sales
Director of
Marketing and
Sales
Director of
Operations and
Sales
Director of IT & IS
Software
Developer
16
CEO & Director of Finance – Tommie O’Brien
Background, Qualification and Experience
Tommie O‟ Brien graduated from Dublin City University (DCU) in 2010 with a Bachelor of
Business Studies degree, majoring in Electronic Business Management. Tommie is currently
studying for a Masters in Electronic Commerce which he expects to graduate from in
November 2011. Recently Tommie obtained the PRINCE2 Project Management Certificate.
Undertaking this qualification has enabled Tommie to improve his management
characteristics and use the resources available at his disposal more effectively. According to
Tiernan et al (2001) “managers have the responsibility of combining and using organisational
resources to ensure that the organisation achieves its purpose.”
Through previous work experience Tommie has developed an excellent knowledge of finance
and accountancy. From May 2010-September 2010, Tommie worked as the company
accountant for Clarke Construction Ltd. The position provided Tommie with opportunity to
up-skill his knowledge in areas such as VAT, Corporation Tax, PAYE, PRSI and Revenue
Returns. Collectively the management team believe that this knowledge will be vital for
ensuring that the financial obligations of CPS are strictly adhered to.
Skills/Attributes and Characteristics
Throughout previous assignments Tommie has demonstrated excellent competencies which
will benefit the team as a whole. Tommie has shown himself to be an excellent problem
solver which will be an excellent competency when trying to resolve sometimes tedious
financial issues and queries. Tommie has also displayed communication skills as a core
competency. When liaising with the other directors and employees this will be imperative,
especially in delegating budgets to the directors of Marketing and Sales and HR and Sales.
Roles and Responsibilities
It is expected that Tommie will manage all of the financial aspects of the business. In his role
as CEO he will also oversee the work of all other departments and provide guidance as to the
direction of the organisation. His position will include the following responsibilities:

Consult with Directors on aspects of business strategy.

Decision making on a companywide level.
17

Outline the financial position of the company.

The Annual Report.

Sales Forecast.

Financial Strategy and Planning.

Communicate the departmental budgets.

All finances must be created with the utmost ethical consideration.
The management team insist that the Director of Finance must adhere to the International
Accounting Standards at all times. This is to ensure that all financial information is
comparable globally. According to Dyson (2001, p245) “The International Accounting
Standards Committee (IASC) is to make financial statements more comparable on a
worldwide basis.”
Director of Human Resources and Sales – Ian Campbell
Background, Qualification and Experience
Ian Campbell graduated from University College Dublin (UCD) in 2009 with a Bachelor of
Commerce degree majoring in Accountancy and Management. Currently Ian is studying for a
Masters in Electronic Commerce in DCU which he expects to graduate from in November
2011. Ian has full qualifications in Google Ad Words, Google Analytics and PRINCE2
Project Management. Ian has previously worked in retail commanding several different
positions. Ian has already two small home businesses for which he is solely responsible for
sales and marketing.
Ian has also previously worked in the corporate tax department of Deloitte as a Corporate Tax
Assistant; meaning he can also act as a support for the CPS Director of Finance.
Skills and Attributes
Ian has an excellent record regarding financial reporting and the legalities surrounding this
field. However the management team collectively felt that Ian would be more suited to
human resource and sales due to his charismatic, friendly and accommodating personal
approach.
18
The management team identified that Ian has excellent interpersonal skills which make him
invaluable for promoting and selling the products of CPS to potential consumers. Ian is a very
compassionate and understanding person; therefore the management team believe that Ian
would make an excellent Director of Human Resources. Ian is very adept regarding
employment; this was another key factor for promoting Ian to this position. Human resources
and sales are disciplines that are closely linked and this is the justification for providing Ian
with this dual role. “The goal of human resources is to bolster the company and reputation
through hiring, training and promoting employees who represent the company‟s highest level
of service and product delivery” (Mayhew, 2011).
Roles and Responsibilities
It is expected that Ian will effectively manage and co-ordinate the human resource
department. Ian is also jointly in charge of the sales department. This position will include the
following responsibilities:
HR Functions

Execute the appropriate hiring, training and promotion of employees for CPS.

Ensure that all legal employment obligations are adhered to.

Manage the payroll and employee information.

Inter-departmental communication regarding budget and marketing campaigns.
Sales Functions

Maximise the CPS brand through effective sales techniques.

Provide customer support where necessary.

Network and liaise with customers.

Co-Ordinate with other directors a sales strategy to reach or out-do sales targets.
19
Director of Operations and Sales - Graham Tate
Background, Qualification and Experience
Graham Tate graduated from DCU in 2010 with a Bachelor of Business Studies degree,
majoring in Electronic Business Management. Currently Graham is studying for a Masters in
Electronic Commerce in DCU which he expects to graduate from in November 2011.
Graham has completed two other qualifications during his studies in DCU: Google Ad Words
and PRINCE2 Project Management. Graham has four years‟ experience working in the retail
industry.
Skills and Attributes
Graham has significant experience in working in cash related positions that require a
significant amount of diligence, attention to detail and good organisational skills. The
management felt that these skills are crucial for the Director of Operations and Sales. Having
recently acquired the PRINCE2 Certificate Graham will be very confident of using his
acquired skills to enhance the productivity of CPS and manage available resources wisely.
Graham is skilled at achieving objectives to a pre-determined deadline.
Roles and Responsibilities
It is expected that Graham will effectively manage and co-ordinate the operations
department. Graham is also jointly responsible for the Sales Department. Graham‟s primary
responsibilities in this position will include:
Operations Functions

Adhering to the budgets set out by the Finance Department.

Location and Premises Management.

Ensure sufficient customer support services available.

Craft and distribute company strategy.

Analyse the Micro and Macro environment of CPS.
Sales Functions

Maximise the CPS brand through effective sales techniques.

Provide customer support where necessary.
20

Network and liaise with customers.

Co-Ordinate with other directors a sales strategy to reach or out-do sales targets.
Director of Marketing and Sales – Dara Boland
Background, Qualification and Experience
Dara graduated from DCU in 2010 with a Bachelor degree in Marketing, Innovation and
Technology. Dara is currently studying for a Masters in Electronic Commerce in DCU which
he expects to graduate from in November 2011. Dara has previously worked as a market
development analyst for Allianz Insurance. The experience that he gained from working with
this large business enabled Dara to better understand the importance of distributing,
promoting and pricing goods, services and ideas (Dibb et al, 2006, p7).
Throughout his Master‟s programme, Dara has developed the skills to promote and advertise
the products and services of CPS online.
Skills and Attributes
Dara‟s work experience made him the perfect candidate for this position as he has a solid
understanding of how to promote the CPS brand online. Dara possess excellent leadership
and creativity skills. Dara has consistently demonstrated his leadership skills through his
positive attitude, ability to motivate others and to achieve results. Dara has excellent Web
design skills, and designed the company website; www.cloudpayrollsolutions.net.
According to Business Mastery (2011) good marketing leadership is the following “selfless in
giving others the credit when things go right, and quick to accept responsibility when things
go wrong.” Dara has shown on several that he is creative and willing to take a risk by
thinking outside the box. Having this creative characteristic is fundamental to promoting the
CPS brand.
21
Roles and Responsibilities
It is expected that Dara will successfully direct and organize the Marketing Department. Dara
is also jointly responsible for the Sales Department. Therefore this position will comprise of
the following responsibilities:
Marketing Functions

Develop a Marketing campaign for a new company.

Create new and innovative advertising.

Launch and maintain Social Media, SEO and Online Advertising strategy.

Preserve the use of traditional media advertising.

Adhere to the budget administered by the Finance Department.
Sales Functions

Maximise the CPS brand through effective sales techniques.

Provide customer support where necessary.

Network and liaise with customers.

Co-Ordinate with other directors a sales strategy to reach or out-do sales targets.
Director of IT and Information Systems – Mark Allen
Background, Qualification and Experience
Mark Allen graduated from Trinity College Dublin (TCD) in 2009 with a Bachelor‟s degree
in Business and Economics. Mark is currently studying for a Masters in Electronic
Commerce in DCU which he expects to graduate from in November 2011. Through studying
the Masters in Electronic Commerce Mark also successfully acquired the PRINCE 2 Project
Management and Google AdWords Certificates. Mark has previously worked as a payroll
support representative for Sage Payroll. This meant that Mark could understand most of the
technical issues that customers had with their software. These issues varied from the design
of the system, the price and usability.
22
Skills and Attributes
Mark has very good communication and technical skills and put himself forward for this role
due to his expertise in the payroll industry and understanding of consumer needs. Throughout
client based assignments, Mark has displayed great technical ability.
Equally Mark is very adept at managing the security issues associated with the CPS service.
Marks‟ excellent communication skills will be imperative in liaising with the IT specialist
who will be hired as part of the CPS team. Mark is very capable of succinctly communicating
a message constructively without causing needless conflict.
Roles and Responsibilities
Mark will lead and manage the IT and IS Department. Marks‟ primary job responsibilities
will include:

Develop a Risk Management strategy.

Ensure the critical infrastructure of CPS is secure at all times (Website and Interface).

Effectively lead all employees within the IT and IS Department.

Adhere to the allocated budget from the Finance Department.

Create and update a Business Continuity Plan.
23
Business Mission
The significance of a clear, well thought out mission statement should not be underemphasized.
Not only will it force Management to think critically about its objectives, but it also requires CPS to
think realistically about how objectives will be met.
Thus CPS devised the following formal “Mission Statement”;
“CPS seek to; deliver the best possible, reliable, yet simple, electronic payroll solution, to
help our clients improve payroll efficiency and business profitability.”
Business Model
Johnson et al. (2008) describe a business model as having four intertwined elements that
when combined, create and deliver value. These four elements are:
1. The Customer Value Proposition (CVP)
2. Profit Formula
3. Key Resources
4. Key Processes
Each of these four elements has a crucial part to play in the generation of a successful
business model for any company. The management team aims to demonstrate how the
company‟s business model is designed under each of these criteria. The aim of CPS is to
position itself in the competitive space, as outlined by Wickham (2006), as a low cost
provider of payroll software to small and medium sized Irish enterprises by utilising cloud
computing technology.
Customer Value Proposition (CVP)
The CPS product is targeted at Irish SME‟s employing fewer than thirty-five employees.
These companies tend not to have a dedicated payroll administrator and instead complete
their payroll on a weekly/ monthly basis (depending on the company‟s payment periods) by a
senior employee in addition to their normal everyday duties.
24
At the end of each tax year they will need to update the software to the following year‟s rates
to ensure that they are revenue compliant.
The CPS service creates value for customers by offering a payroll system that is revenue
compliant without the user having to manually install an update to ensure that their software
is using the correct income tax and Universal Social Charge (USC) rates. Furthermore, the
CPS software will automatically back up each pay period for every user and provide them
with an archive to go back and view all the pay periods processed on the CPS system.
This feature also means that in the event of their company being audited by the revenue
commissioner, they will have a record of all payments processed through the CPS system.
Companies are required to keep records from the last six years to present to revenue if they
are audited and the CPS system will automatically ensure that any payments processed
through the application will be recorded and stored in a secure environment. Rival payroll
software requires users to manually back up and store this information whereas the CPS
software will automatically do this when every payroll period is processed thereby providing
an online archive of all a company‟s payroll periods to be accessed should they need it in the
event of an audit.
The management team believe that these features provide an important CVP to companies as
it ensures that their payroll is revenue compliant without requiring them to take any further
action to update the software.
Profit Formula
The service will be sold on an annual subscription basis where the customer pays an annual
charge to access and use the application for that particular tax year. The aforementioned
features are then made available to the customer and they are able to process their payroll for
the year. The profit formula and revenue model are covered in more detail in the financial
section of the report. The price for the annual subscription has been set at €99.99 excluding
VAT. From market research, this would make CPS up to 30% cheaper than similar packages
offered by Sage and Thesaurus.
Key Resources
The key resources section of the business model describes the resources that are required to
deliver the value proposition to the customer (Johnson et al., 2008). The key resources behind
25
the CPS service are: the coding required for the application and the cloud computing platform
(that will be rented from Microsoft Azure). This will enable the company to offer its service
to any small business within the Republic of Ireland at a low cost. These are identified as the
two critical resources for CPS as the company would be unable to continue provision of the
service if either of these resources were to be lost.
Key Processes
A key process that will be need undertaken on an annual basis (or when required) is to adjust
the application‟s code to reflect any changes that are made to income tax or USC rates or any
other legislation that is introduced that requires a change in the method that the application
uses to calculate employee‟s pay. In Ireland the National Budget is usually released in the
first week of December and any changes that that are made to Pay as You Earn (PAYE)
calculation will need to be introduced to the application in preparation for the new PAYE
rates the following year. This process is important to the CPS value proposition as it is
undertaken to ensure that the service is fully compliant with revenue which had been
identified as a critical feature of a quality payroll package.
The management team believe that the implementation of these four elements provides CPS
with a solid business model that can provide the structure for a profitable and successful
business.
26
Figure 2: Process Chart of Proposed System
27
Primary
Research
28
Summary
The target market for the Cloud Payroll System was defined by the management team as
small-medium enterprises that employ fewer than 35 employees. A member of our
management team has experience working with Sage Payroll and identified that companies of
this size should be targeted. Two of the unique selling points of the CPS system are: (1) low
cost and (2) simplicity/usability. From experience, it was anticipated that the product would
be targeted at smaller firms. From researching the FAME database: there are 6,685 private
limited companies registered in the Republic of Ireland employing fewer than 35 employees.
From the team member‟s experience with Sage, the payroll needs of companies do not
change from one industry to another so there was no need to segment the target market
further.
The anticipation of CPS was to conduct research into discovering whether or not there would
be a sustainable market for a cloud computing payroll software package. To achieve this, the
management team wished to identify attitudes towards current payroll packages and how they
could be improved upon. Qualitative interviews and questionnaire surveys were used to
conduct this research.
Because of the sensitive nature of information relating to payroll, the management team
agreed that focus groups and online discussion forums were neither viable nor realistic
methods for conducting this research. The goal of the research was to obtain genuine attitudes
and spontaneous responses. Respondents may feel uncomfortable sharing information
relating to their payroll system in the presence of individuals from other companies.
Qualitative interviews and surveys could be undertaken between the management team and
respondent in private and ensured that they would not be adversely influenced by their
research environment and confidentiality was guaranteed.
The qualitative interviews took place at the premises of nine companies. The interviewees
were typically payroll specialists, accountants or senior management figures who held an
explicit knowledge of using payroll packages. The aim was to gain an in-depth understanding
of how companies were using their payroll packages currently. Furthermore the intention was
to gauge the interviewee‟s attitudes towards internet security and using internet based
services. The qualitative interviews were crucial in identifying attitudes towards these key
issues. The feedback from these interviews was used to form the basis for the quantitative
surveys.
29
Fundamentally, this would allow the management team to focus in on the most important and
relevant issues relative to the research objectives in these questionnaire surveys.
Quantitative surveys allowed the management team to receive feedback on specific issues
relating to our research objectives in a quick and cost efficient manner. This survey was
distributed to constituents of the target market. Each member of the management team was
charged with contacting some small-medium enterprises. The management team targeted
companies that were either known personally or had a connection to us to in order to achieve
a higher response rate. Surveys were distributed in person and by e-mail to the targeted
companies.
Qualitative Research
Objectives
Qualitative interviews were selected as a primary research technique. The common research
objectives for each interview were as follows:
1. Identify the characteristics of the current payroll system within the organisation.
2. Identify any perceived issues or limitations that existed with their current payroll
package.
3. Identify attitudes towards using a new internet-based payroll system and their
perceived willingness to adopt such a system.
4. Identify the level of understanding of cloud computing technology and the use of
mobile technology.
Justification
Sanders (2009, p324) explains the need for using interviews as a research method: “in-depth
interviews provide you the opportunity to „probe‟ answers, where you want interviewees to
explain or build upon their responses.” The management team agreed that conducting indepth interviews would be the most logical method in beginning their primary research.
The advantages of using interviews as a research method are:

Recording Answers: Each participant was asked prior to interview if they were
comfortable with being interviewed. Recording enabled the management team to
30
subsequently analyse the main points of the interview and ensure information was
related back to the four primary research objectives. Maylor and Blackmon (2005,
p232) promote the recording of interviews as “the best method to faithfully ensure
that you capture your qualitative data is to record your interviews and then transcribe
them later on.”

Probing: When discussing the different research methods, it was the opinion of the
management team that more substantial information could be attained through
interviews. Due to the nature of the research study, which could be perceived as being
sensitive to some participants, it was felt that face-to-face interviews would provide
the greatest wealth of information to our research. Actually meeting with the
interviewee rather than conducting the interview over the phone for example, allowed
the management team to build up a rapport and establish a level of trust with the
respondent. It was deemed crucial to encourage the interviewee to express their
honest opinions and insights towards their current payroll system. Bryman and Bell
(2007, p223) state that “when the respondent does not provide a sufficiently complete
answer they have to be probed for more information.”
The information that the management team could gather from the in-depth one-on-one
interviews in comparison to focus groups was perceived as the superior method of achieving
the research objectives. According to the Centre for Strategy Research (2011) the quantity
and value of data gathered in an interview is far greater compared to a focus group:
“Researchers obtain at least twice the amount of information per participant in an in-depth
20-minute interview than in a typical 10-member, 90-minute focus group.” (Centre for
Strategy Research 2011)
In addition to achieving the four specific research objectives, undertaking nine interviews
provided ample opportunity to identify other key issues or opinions relative to the study that
interviewees may provide spontaneously. Flexibility was therefore a key motive in
undertaking qualitative interviews before designing and distributing the quantitative surveys.
Any additional issues that were identified outside the scope of our primary objectives were
considered during the design of the subsequent questionnaire surveys.
31
Approach
The management team decided to take a „non-probability‟ approach to selecting the sample
respondents for these interviews. This approach allowed the management team to select
samples based on their subjective judgement (Saunders, 2009, p233). In the case of this
research, it was essential to identify small-medium enterprises that employed fewer than
thirty-five workers.
According to Bryman and Bell (2007), the three main types of non-probability sampling are:
(a) convenience (b) snowball and (c) quota. The management team identified „convenience
sampling‟ as the most appropriate approach because it was deemed to yield the highest
response rate from potential participants. According to Bryman and Bell (2007, p197) “a
convenience sample is one that is simply available to the researcher by virtue of its
accessibility”.
A list of ten possible interviewees were identified and contacted via phone/e-mail in order to
arrange a possible interview. The management team received a response rate of 90% or 9 out
of 10 potential respondents agreed to undertake the interview. During the initial e-mail/phone
call, the potential interviewee was informed of the following:

The background to the CPS research and their role in potentially participating in an
interview.

Members of the management team could travel to their premises to conduct the
interview at whatever time was most convenient for them.

The interview would take no longer than thirty minutes.

The management team assured the individual that all information provided by them
during the interview would be held in the strictest confidence and would not be made
available to any third party.

The management team would provide the participant, if they so wished with a copy of
the findings from our market research.
This approach ensured that the qualitative interviews were arranged and undertaken in an
ethical manner at all times. At the beginning of each interview, the participant was: (1) asked
whether they were comfortable being recorded (2) provided with a copy of the questions and
(3) signed an ethics form. At no point were participants misled or misinformed of the process
32
that they were involved in. The management team used the Dublin City University guidelines
on research ethics at all times as the basis for their research approach.
The management team compiled a list of possible interviewees that each team member knew
personally or through a business contact. It was agreed that each potential interviewee must
possess the following characteristics in order to be included as part of the target sample: this
was to ensure that the research undertaken was accurate and relevant to the four primary
research objectives. (Saunders, 2009) The characteristic were as follows:

The participant must be experienced in using their company‟s payroll system.

The participant must be considered to be part of the target market or provide payroll
services to constituents of the target market
The management team identified suitable participants by confirming that they adhered to
these criteria prior to engaging with them in an interview. The desired participants would
ideally be in charge of or assist with the execution of their payroll system. Along with
targeting potential users such as small-medium enterprises who employed fewer than 35
employees, it was decided to interview accountants who provide payroll services to the target
market. Their experience from dealing with many companies who would be characterized as
the CPS target market would provide a greater overall perspective on small-medium
enterprises attitudes towards payroll costs and associated issues.
For each interview, it was agreed that two members of the management team would be
present: one to ask the pre-determined questions and the other to monitor and ask more
specific questions where appropriate. By having two members present, the interview was
likely to last longer and therefore the probability of attaining more detailed insights from the
interviewee would increase. The following table (Fig 3) summarises the nine interviewees,
their position, company and the date that the interview took place:
33
Figure 3: Summary of Qualitative Interviews
Name
Role
Company
Time & Date
Anne-Marie Furlong
Financial Controller
T. P. Whealehan Ltd.
15.00
21/06/2011
Moira Kelly
Head Accountant
Artane Credit Union
14.00
22/06/2011
Martin Clark
Sales Manager
Datapart
11.00
28/06/2011
Lisa Clarke
Payroll Manager
Supervalue (Balieboro,
17.00
28/06/2011
Cavan)
Yvonne Clough
Accounts Manager
Clarke Accountants
17.00 28/06/2011
Sheila Morgan / Moire
Credit Controller/ General
Trinity Credit Union
14.30 29/06/2011
O‟ Sullivan
Manager
Sean Cooney
Payroll Officer
Hugh McCarthy &
14.00 30/06/2011
Associates
Michael Geeney
Store Manager
PharmHealth, DCU
13.30 07/07/2011
David Howell
Store Manager
Iceland Ltd.
15.00 08/07/2011
34
Analysis of Interviews
Interview 1 – Anne Marie Furlong
Approach
Anne Marie Furlong is the financial controller of T. P. Whealehan Ltd. As financial
controller of this company, payroll is one of her duties. Anne Marie has many years of
payroll experience within the firm. It was agreed that because of her experience in payroll,
she would provide the management team with key insights into using different payroll
packages. The company employs less than thirty-five employees and so could be considered
as a constituent of the target market. This was the first interview conducted and provided the
management team with a test run to gauge the quality of the pre-determined questions.
As with all of the qualitative interviews, a question sheet containing 31 questions was used to
form the basis for the interview. From these basic questions, it was anticipated that the
interviewee would provide more information relating to a specific area and therefore would
give rise to further questioning beyond the list of pre-determined questions.
Characteristics of Current Payroll System
The key insights that Anne Marie provided during this interview relative to the first research
objective are as follows:

Company uses SAP.

Three people have access to the payroll in the company.

From a report perspective it is very important to see a how much costs are being used
for each different department and where this can be improved. So having a good
report system is good.

Likes that SAP email updates and keep in contact with different things
Issues & Limitations with Current Payroll Package
The key insights that Anne Marie provided during this interview relative to the second
research objective are as follows:
35

SAP had a very detailed report system but this is also difficult to use and make sense
of at times

Customer service problem at the end of the year. She finds it difficult getting through
to customer service due to the large volume of queries that SAP have to deal with at
the end of the year.
New Internet-Based Payroll System & Willingness To Adopt It
The key insights that Anne Marie provided during this interview relative to the third research
objective are as follows:

Very interested in a more personalised approach as this would enable to have more
reports tailored for the specific needs of the business.

Good having the software only installed on a couple of PCs as it limits the amount of
people that have access to the information.
Understanding of Cloud Computing & Mobile Technology
They key insights that Anne Marie provided during this interview relative to the fourth
research objective are as follows:

Little or no understanding of cloud computing or technology in general. Seemed
suspicious and adverse to technology because of this lack of knowledge
Reflection
This first interview provided the management team with a dry-run for the questions that they
had designed for the qualitative research. There was a logical flow to the interview yet
perhaps the team could have probed into the perceived limitations of the current system in
more depth. Anne Marie believed that the SAP reporting system was difficult to use and that
end of year customer service could be improved. While she did seem interested by a more
personalised design for the payroll system, overall she seemed quite content with her current
package. Her lack of understanding of internet & mobile technology in this instance provided
limited opportunity to gauge attitudes towards cloud computing and phone applications.
36
Interview 2 – Moira Kelly
Approach
Moira Kelly is the head accountant with Coolock-Artane Credit Union. The organisation
employs thirty two people. One member of the management team works part-time as a clerk
with this Credit Union and it was through this affiliation that an interview was arranged. The
organisation would be towards the upper limit of the target market but would provide key
insights into how a larger firm like the Credit Union uses their payroll system.
Again a pre-determined sheet of thirty one questions was used to provide basic structure to
the interview. This question sheet had been slightly modified following the first interview.
This simply means that some of the questions were improved by being rephrased. The
anticipation was to improve upon the experience gained in the first interview and ask more
detailed questions based on the four research objectives.
Characteristics of Current Payroll System
The key insights that Moira Kelly provided during this interview relative to the first research
objective are as follows:

Used to outsource payroll, but it is now in-house (SAGE Micropay) – cheaper

Holiday processing is done on a separate system in the administration department.
This other system is used for volunteers who don‟t get paid also.

Payroll not even on main company network, just held on a specific drive – very
conscious of security concerns
Issues & Limitations with Current Payroll Package
The key insights that Moira Kelly provided during this interview relative to the second
research objective are as follows:

Package doesn‟t highlight any accountancy based flaws – important if it is not an
accountant completing the payroll

Spelling error in licensee name and very expensive to have changed
37
New Internet-Based Payroll System & Willingness To Adopt It
The key insights that Moira Kelly provided during this interview relative to the second
research objective are as follows:

Remote access perceived as being negative for her. The ability to access the system
outside normal working hours could mean she would start „bringing work home with
her‟.

Identified security issues as being a major issue in not adopting an internet based
system. The risks to employee‟s personal information: PPS numbers, date of birth
would mean that she would not get the go ahead to adopt this type of system.
Understanding of Cloud Computing & Mobile Technology
The key insights that Moira Kelly provided during this interview relative to the third research
objective are as follows:

Positive towards cloud computing if security issues were overcome: no server would
be great as they have had a history of server failures within the company
Additional Key Insights

In her experience, very small companies or sole traders with only 3/4 employees and
don‟t even use any sort of payroll package but an Excel spread sheet. Perhaps an
opportunity to target those very small businesses with a very basic, cheap package.
Reflection
The interview with Moira provided the management team with some interesting insights.
Moira saw remote access as a negative. Up until this point the management team had not
considered any drawbacks to remote access other than security issues. This was something to
bear in mind for future interviews. Moira definitely believed that a new cloud-based payroll
system had a market but identified that it would be difficult to get clearance for such a system
in this Credit Union. There appeared to be a more conservative approach to new technology
in this organisation and thus they may be slow to adopt new innovations like the CPS system.
38
Interview 3 – Martin Clark
Approach
Martin Clark is the founder of Datapart and is currently their sales manager. He has previous
experience in completing the payroll for the company. One of the management team knew
Martin through a previous job position. Although a larger firm now, the experience that
Martin had with payroll during the early development of the company would provide
considerable value to the management team as new start-ups with a small number of
employees are categorized as part of the target market.
Characteristics of Current Payroll System
The key insights that Martin Clark provided during this interview relative to the first research
objective are as follows:

The software was established about ten years ago. Found out about this with another
person. Had prior involvement so knew exactly what he was looking for.

System only used once a month and also in exceptional circumstances for government
budgets and forms such as the p45/p60 etc.

The most important thing is that it calculates the payroll accurately, and if it doesn‟t
do that it‟s no use whatsoever and user friendliness is also key.
Issues & Limitations with Current Payroll Package
The key insights that Martin Clark provided during this interview relative to the second
research objective are as follows:

Very happy with their current system and customer service seems to be a big factor
for this.

Happy with system due to simplicity and the way everything works for them

He was not able to provide any flaws or limitations with current system
39
New Internet-Based Payroll System & Willingness To Adopt It
The key insights that Martin Clark provided during this interview relative to the third
research objective are as follows:

Does have an issue with security, would rather let other organisations and individuals
do the trial run first and examine the results from that.

Would like remote access though and would use system from home.
Understanding of Cloud Computing & Mobile Technology
The key insights that Martin Clark provided during this interview relative to the fourth
research objective are as follows:

Not comfortable using services in the cloud at the minute due to security fears.

No current use for smartphone app.
Reflection
On reflection, Martin was content with his current payroll system. He may be open to using a
cloud based payroll system but security concerns means that he would be slow to adopt.
Converse to the second interview, Martin believed remote access would be a valuable feature
of a payroll system. Because Martin was content with his current system, this interview
allowed the management team to identify the primary reasons for this satisfaction, namely:
usability and good customer service.
Interview 4 – Lisa Clarke
Approach
One of the management team knew Lisa personally and was able to arrange an interview with
her. This Super Value branch is a franchised store with fewer than thirty-five employees. The
store has complete control over what payroll package they can use and thus are considered as
a constituent of the target market.
Characteristics of Current Payroll System
The key insights that Lisa Clarke provided during this interview relative to the first research
objective are as follows:
40

The package that is used by head office is called Quantium. The hours are recorded
through an in store package called Timeplus.

Basically just a clock in machine that the hours are downloaded from that.

Owner heard about this through word of mouth.

Used weekly for payroll calculation.

The system automatically calculates the bank holidays which can be quite useful for
saving time and reducing errors.

Good features include grouping employees into different categories
Issues & Limitations with Current Payroll Package
The key insights that Lisa Clarke provided during this interview relative to the second
research objective are as follows:

Would like more advanced reports and easier methods of forecasting the wages easier
in advance. This is an option that would she would love to be easier with her current
system.

The main flaw with current system is that forecasting wages for the next week is very
difficult at the minute.

Problems with current system happen usually at the end of year when the system has
to be updated.

Admin features are important: Training in a new person but would only like them to
see a certain amount of details. Would like to restrict the person from seeing the
current wage levels of other employees.
New Internet-Based Payroll System & Willingness To Adopt It
The key insights that Lisa Clarke provided during this interview relative to the third research
objective are as follows:

The key characteristics of a new system for her would be usability and portability.

Would like a more tailored package that did not contain functions that she does not
use.
41

The proposed service is excellent for people or organisations that depend on one
person who do the payroll. Could do the payroll at home or even away on holidays if
it was necessary.
Understanding of Cloud Computing & Mobile Technology
The key insights that Lisa Clarke provided during this interview relative to the fourth
research objective are as follows:

No problems with storing information in the cloud, pros and cons with all technology.
Once it is secure no real problems with such a system.

Uses an iPhone and thus uses her laptop less as a result so therefore an App version of
this could become very useful for her.
Reflection
The management team believe that this interview provided some crucial insights relative to
the four research objectives. Lisa identified several flaws in her current system. She also
believed that there would be a willing market for our product, namely companies who relied
on one person to complete their payroll. Lisa also appeared to be technologically savvy: she
uses a laptop and an iPhone and displayed an understanding of the „cloud computing‟
concept. It became apparent to the management team that interviewees with an understanding
of the latest technological innovations appeared more positive towards our concept. While
she accepted that security is an issue, she qualified this by saying that it is part and parcel of
any information technology system.
Interview 5 – Yvonne Clough
Approach
Yvonne Clough is the accounts manager for Clarke Accountants and is in charge of the
company‟s payroll. The management team was able to arrange a meeting with Yvonne
through a business contact. With fewer than 35 employees, this company falls into the
specific target market for the CPS product.
Characteristics of Current Payroll System
They key insights that Yvonne Clough provided during this interview relative to the first
research objective are as follows:
42

Only person that uses the payroll system.

The most important features of a payroll system would be the processing of reports
such as holiday reports
Issues & Limitations with Current Payroll Package
The key insights that Yvonne Clough provided during this interview relative to the second
research objective are as follows:

The system is too expensive, they annual fee is far too expensive for how we use it,
the fee and customer service is far too expensive.

Unable to think of any improvements for the system itself.

Believes that her current system us very user friendly.

Customer service was very beneficial in the early days when firstly using the new
software.

Constantly on the phone complaining about the price and plan for what the company
needs and requires. Fee paid is far in excess of what is necessary.
New Internet-Based Payroll System & Willingness To Adopt It
The key insights that Yvonne Clough provided during this interview relative to the third
research objective are as follows:

Portability is a key factor to adopting such as product.

Flexibility would also be an enormous attraction along with cost reduction.
Understanding of Cloud Computing & Mobile Technology
The key insights that Yvonne Clough provided during this interview relative to the fourth
research objective are as follows:

No knowledge of smartphones/apps/cloud computing.
Reflection
Yvonne highlighted the cost of her current system as a major issue and admitted that she
would be willing to consider other cheaper payroll systems. It is interesting that although
Yvonne seemed content with the functionality of her system, reduced cost for her would be
43
the main factor in attracting her to use a new system. Remote access was also cited as an
incentive to switch systems. As Yvonne had limited knowledge in relation to technology, the
conversation about cloud computing and phone applications provided limited insights for the
management team.
Interview 6 – Sheila Morgan & Moire O’ Sullivan
Approach
One of the management team had worked with Trinity Credit Union previously and so knew
Sheila & Moire personally. This Credit Union employs nine employees and is thus
categorized as part of the target market. This was the only interview where the management
team interviewed two people at the same time. Because both individuals held an explicit
knowledge of their payroll package, the management team believed that there would be
added benefit from getting two people‟s opinions from the one interview. The management
team decided not to alter the structure of our question sheet. There was an anticipation of
more discursive conversation because there would be four people present at this interview in
comparison to the usual three.
Characteristics of Current Payroll System
The key insights that Sheila & Moire provided during this interview relative to the first
research objective are as follows:

Bought payroll package over ten years ago and have updated it annually (SAGE
Quickpay)

Credit Controller, Manager & Clerical Officer have access to payroll

Revenue Compliance is the key feature of a good payroll system.

It is a small company so payroll is routine and very predictable: doesn‟t change from
week to week.

They pay an additional annual maintenance charge.

Use most of the payroll functions bar a couple.
44

Use standard hardware/software package: Progress & NSSL that is used by all Irish
Credit Unions
Issues & Limitations with Current Payroll Package
The key insights that Sheila & Moire provided during this interview relative to the second
research objective are as follows:

End of Year calculations are very time consuming: have to go through it step by step
by step doing print outs and back-ups.

Sometimes customer service doesn‟t understand the technical aspects of payroll.

Issue when company was late paying their bill: provider would not provide technical
support because there was an outstanding bill.
New Internet-Based Payroll System & Willingness To Adopt It
The key insights that Sheila & Moire provided during this interview relative to the third
research objective are as follows:

Issue with switching with SAGE being reputable provider with good security
credentials/established company.

Issue with having remote access and wouldn‟t want to compromise privacy of
employee details.
Understanding of Cloud Computing & Mobile Technology
The key insights that Sheila & Moire provided during this interview relative to the fourth
research objective are as follows:

Rudimentary understanding of „cloud computing‟. See a major benefit in having the
data backed up off-site. Currently paying huge fees to have their data stored by a
company in Germany.

Adverse to phone applications for completing company tasks. Lack of understanding
and perceive it as not being worth it for just 9 employees.
Reflection
This interview provided the management team with a wealth of information. There was a
huge benefit of getting both the opinion of the financial controller and the manager in the one
45
instance. Overall, they identified possible improvements within their current system and also
believed that at times customer service was not satisfying their needs. Like the interview with
Coolock-Artane Credit Union the organisation appeared to be averse to engaging with new
technology due to security concerns.
Interview 7 – Sean Cooney
Approach
Sean Cooney worked for Hugh McCarthy Ltd whose services included providing payroll for
small-medium enterprises. Obviously from working with payroll for many firms that would
be categorized as our target market, the management team identified Sean as an excellent
participant to take part in the interview process. The meeting was arranged through a business
contact of one of the management team.
Characteristics of Current Payroll System
The key insights that Sean Cooney provided during this interview relative to the first research
objective are as follows:

Hasn‟t changed package in last 10 years as Sage offer it in an all-round accountancy
package.

Well-designed interface and automatic holiday processing function are very
important.

Holiday processing is an important function: P45, P35, and P21s.
Issues & Limitations with Current Payroll Package
The key insights that Sean Cooney provided during this interview relative to the second
research objective are as follows:

Customer Service Problem – issue with communicating over the phone. It is quite
frustrating for him when he has any problems as Sage cannot log in to see the problem
thus must communicate the problem via email or telephone which may take 3-4 days
to fix the issue. Believes the issue would only take 10-15 minutes to fix if Sage where
able to log in.
46
New Internet-Based Payroll System & Willingness To Adopt It
The key insights that Sean Cooney provided during this interview relative to the third
research objective are as follows:

For him remote access would be hugely beneficial. When he is out on audits, he
needs access to the payroll and has to delegate this responsibility. Would be far
happier if he could access it from anywhere.

Reduced costs/flexibility/back up again are advantages with security again being the
primary concern especially for older people who have a negative perception of using
new technology.
Understanding of Cloud Computing & Mobile Technology
The key insights that Sean Cooney provided during this interview relative to the fourth
research objective are as follows:

Open to using a new system that operated in the cloud as long as it satisfied his and
his clients‟ needs.

Doesn‟t use but very open to using business apps for management responsibilities.
Additional Key Insights

From an SME perspective as he is used to dealing with them on a daily basis, our
proposed system which would increase flexibility and reduces costs is essentially
what they are looking for once training and education was right and security
measurements were in place then he would see this as an ideal product with little
limitations.
Reflection
The management team found Sean to provide excellent insights into payroll systems based on
his considerable professional experience. He expressed positivity towards the proposed CPS
system, believing that it would meet the needs of the target market through the provision of a
cheap, user friendly service that could be accessed remotely. For Sean as an accountant,
remote access would be hugely beneficial as he has additional responsibilities that he must
often work from outside the office. While security was again cited as a consideration, Sean‟s
endorsement of the proposed system provided the management team with added confidence
47
that the product was being designed in an appropriate way in order to meet the specific needs
of the target market.
Interview 8 – Michael Geeney
Approach
As manager of the pharmacy in Dublin City University, the management team knew Michael
and he was very willing to provide us with an interview. Michael is the store manager and
managed the payroll system up until recently. The pharmacy is a small-medium enterprise
that would be categorized as part of the target market.
Characteristics of Current Payroll System
The key insights that Michael Geeney provided during this interview relative to the first
research objective are as follows:

Used Big Red Book before current provider: Quickpay.

Started using an accountant since last September because of time constraints and
complexity.
Issues & Limitations with Current Payroll Package
The key insights that Michael Geeney provided during this interview relative to the second
research objective are as follows:

Quickpay is not good for holiday processing.

Difficulties arise where you have employees paid weekly and some paid monthly.
User basically must set up two separate companies in the system to cater for both pay
schedules.

Calculating maternity leave is complicated in the system and not user-friendly.

Does not feel like he is getting value for money with paying for customer service as
he only needs to ring them once/twice annually.

Lack of retail experience from customer service is a limitation.
48
New Internet-Based Payroll System & Willingness To Adopt It
The key insights that Michael Geeney provided during this interview relative to the third
research objective are as follows:

Very positive towards remote access. Currently limited to one computer with one
licence, there are also other software packages where you are able to gain remote
access, although it would be much slower.

New system would have its advantages in terms of flexibility also.
Understanding of Cloud Computing & Mobile Technology
The key insights that Michael Geeney provided during this interview relative to the fourth
research objective are as follows:

Basic understanding of cloud computing: automatic back up & convenience are
advantages but again security would be of paramount of importance.

Feels customer service must be included with any cloud – based system.

Uses an app to calculate the mileage used by him for deliveries within the company.

Very positive towards using a smartphone app for payroll, possibly have it integrated
with an accounting system.

Recommends providing a function that would provide you with a graph illustrating
the costs of your staff compared with turnover. It would be very beneficial in terms of
analysing projections and how your business is performing as staff costs are a major
cost for most businesses.
Reflection
It was interesting to note that Michael now outsources payroll to an accountant due to time
constraints and difficulty using his payroll package. Michael seemed attracted to the cost
benefits, usability and remote access that the CPS system would provide. Micheal appeared
to be quite technologically savvy, yet found it difficult using a generic payroll package. This
was a key finding that the management team identified. The team were able to identify this
by drilling down into Michael‟s attitudes towards payroll beyond the standard questions that
were used for each interview.
49
Interview 9 – David Howell
Approach
David Howell was a personal contact of the management team. This Iceland store is a
franchised company with fewer than-thirty five employees and has complete control over
their own payroll system.
Characteristics of Current Payroll System
The key insights that David Howell provided during this interview relative to the first
research objective are as follows:

Two people have access to the payroll in the company.

Current package is satisfying the company‟s needs currently
Issues & Limitations with Current Payroll Package
The key insights that David Howell provided during this interview relative to the second
research objective are as follows:

No remote access from outside of the store. If head office needs to check something
they need to come in store.

Probably use less than half the features that are available on the system

Generic system. Reports not really great. Would like an alert system that would show
what holiday‟s employees have left. This is important as all employees have to be
paid and given the entitlements.

Noticeable problem is that time does not update when the clocks go back or forward.
This upsets the entire payroll so this can be annoying.

Believes that customer service could certainly be improved with his current package.

Would like a system that does incorporate legislation as well. This is why payroll is
checked daily due to the fact that people must be getting what they are entitled to.
50
New Internet-Based Payroll System & Willingness To Adopt It
The key insights that David Howell provided during this interview relative to the third
research objective are as follows:

Open to adopting new system, citing a reduction in costs as the primary motive factor
for changing.

New system must convince him of being totally secure.
Understanding of Cloud Computing & Mobile Technology
The key insights that David Howell provided during this interview relative to the fourth
research objective are as follows:

Familiar with cloud computing.

Believes that a mobile device would help. A store manager needs to know at all times
what is happening in the store even when they are on holidays.

Good way of monitoring the store and employees and relative legislation.

Perhaps senior management such as directors would be very interested in this because
they are on the road an awful lot and checking emails via mobile devices so this could
be something that they would be very interested in within this company.

Ease of access is very appealing.
Reflection
Like some other respondents, David identified the current payroll system as being generic
and not tailored to his specific needs. Reduction in costs would be the key determinant in
switching to a new system as long as it was secure and user-friendly. Overall David echoed
many of the main beliefs & attitudes towards payroll that had been identified by the
management team up until this point.
51
Quantitative Research
Objectives
The management team used the quantitative survey technique to define more specific data
relative to the four research objectives. The management team sought to specifically target
companies who could be classed as the target market for the CPS service. This means that all
companies surveyed had a workforce of fewer than thirty-five employees. As the survey
asked in depth questions about payroll systems, the payroll specialist, manager or accountant
(where applicable) was targeted within each potential respondent company.
Methodology
The survey was administered both physically and electronically to potential participants. The
management team chose this method of quantitative research due its convenience and costeffectiveness at gathering data from the target sample of over fifty companies. From the
experience gained in undertaking the qualitative interviews, the management team recognised
that companies may be reluctant to complete the survey due to privacy concerns related to
company payroll information. Again the management team used personal & business contacts
to target companies. Each participant was given one week to complete the survey where a
member of the team would physically collect the document from the company premises or
the respondent would return it electronically to the team via e-mail attachment.
Survey Design
The initial stage of the design involved agreeing that the survey would be distributed to
targeted respondents both physically and electronically. In this regard a separate cover letter
was created for both distribution methods. The management team believed that it was
essential to design a cover letter that outlined exactly why CPS was undertaking this research.
The cover letter included a clear set of guiding principles about how to answer the survey and
an approximation of how long the survey would take to complete. The cover letter also
informed participants that they were entitled to request a copy of our research findings should
they wish.
According to Bryman and Bell (2007, p244), “it is important to write a good cover letter
explaining the reasons for the research.” Bryman and Bell (2007, p244) also conclude that
“clear instructions and an attractive layout improve the response rate.”
52
The cover letter also stated that all information would be treated in the strictest of confidence
and that all information provided would be destroyed appropriately after the completion of
the study. This ethical research approach is supported by (Maylor and Blackmon, 2005, p284)
“make sure that the confidentiality of individuals and, where necessary, organisations is
preserved in reporting your research”.
Figure 4: Survey Design Process (Wilson, 2006)
Step 1:
• Develop Question Topics.
Step 2:
• Select Question and Reponse Formats.
Step 3:
• Select Wording.
Step 4:
• Determine Sequence.
Step 5:
• Design Layout and Appearance.
Step 6:
• Pilot Test.
Step 7:
• Undertake Survey.
Step 1: Develop Question Topics
The management team specifically designed questions relating to the four primary research
objectives. These research objectives are:
1. Identify the characteristics of the current payroll system within the organisation.
2. Identify any perceived issues or limitations that existed with their current payroll
package.
3. Identify attitudes towards using a new internet-based payroll system and their
perceived willingness to adopt such a system.
53
4. Identify the level of understanding of cloud computing technology and any associated
issues with it.
Step 2: Select Question and Response Formats
The management team sought to use the findings from the qualitative interviews as a basis
for selecting the most appropriate questions in this survey. The aim was to include as many
relevant questions as possible in order to attain as much information as possible from the
research sample. In terms of structure and format, the management team agreed that the best
approach was to adhere to the following guidelines:

Limited amount of writing and comments.

Use scales, multiple choice questions and dichotomous (yes/no) questions.

Use closed questions to allow for the easy coding of data for SPSS and Microsoft
Excel (Bryman and Bell, 2007).
Step 3: Select Wording
When phrasing survey questions, it was imperative not to confuse or mislead the participant.
In order to phrase the questions appropriately, the management team avoided using:

Double barrelled questions such as „Is usability or security more important to you?‟
According to Burns and Burns (2008, p505) “this will make the question impossible
to answer.”

Jargon or complex language. This can result in a decreased respondent rating
according to Burns and Burns (2008).
Step 4: Determine Sequence
The next aspect of the survey was to ensure that the questions were listed in a logical order.
The initial questions were basic and designed to give the respondent confidence in answering
the survey. As the survey progresses, the questions became more specific, with some
requiring the respondent to provide a reason for their answer to a particular question. Groups
of questions were related to the four primary research objectives and were essentially asked
in that order:

Objective 1: Questions 1-11

Objective 2: Questions 12-16

Objective 3: Questions 17-21
54

Objective 4: Questions 22-28
Step 5: Design Layout & Appearance
The physical characteristics of the survey such as format, spacing, positioning, spelling and
grammar can have significant effects on the results. According to Bryman and Bell (2007,
p248) the survey must be “easy on the eye”. In order to achieve this (1) there was double
spacing between questions (2) respondents were asked to „circle‟ an answer in each question
and (3) after the final question; a statement confirmed that the survey was now complete.
Step 6: Pilot Test
The management team used five respondents for the pilot test of the survey. The participants
reported back that they had no difficulties in understanding the questions and felt the
language and overall presentation was excellent and easy to follow. According to Bryman
and Bell (2007, p273): “Pilot surveys are crucial clear up any confusion as there will be no
interviewers present”.
Step 7: Undertake Survey

The final stage of the survey process was to distribute the questionnaire to potential
participants who could be considered part of the target market. Each member of the
management team was charged with delivering surveys both physically and
electronically. Of the sixty-five surveys distributed, the management team received
fifty-three completed meaning a high response rate of over 80%.
Methodology
The management team had identified the target market of over 6600 small-medium
enterprises that operated in the Republic of Ireland and managed a workforce of fewer than
thirty-five employees. The management team used a rational approach of sampling this target
market. According to Blumberg et al (2005, p202) the term sampling is “selecting some of
the elements of the population, thus attaining conclusions of the entire population.”
The management team were working towards a strict deadline to complete the quantitative
research. By researching a sample of the target population of companies, the management
team was able to meet this desired deadline. According to Saunders (2009, p212) “sampling
is an important consideration when you have tight deadlines.” Further to this, Saunders
(2009, p212) concludes that “collecting data from fewer cases also means that you can collect
55
information that is more detailed.” This was reflected in the survey design, where
respondents were asked to explain their answers to particular questions. This qualitative data
could then be collated with the data attained during the interview process.
The management team needed to plan whether probability or non-probability sampling would
be the most appropriate research technique. The management team subsequently identified
that non-probability sampling would be the best approach. This form of sampling permitted
the management team, as researchers to “select samples based on our subjective judgement”
(Saunders, 2009, p233). The management team required respondents with specific
characteristics and so this was the justification for using non-probability sampling.
As with the qualitative research, convenience non-probability sampling was the specific
approach used. The management team agreed that due to their pool of business & personal
contacts and the timescale involved that convenience sampling would be the most appropriate
option. According to Bryman and Bell (2007, p197) “a convenience sample is one that is
simply available to the researcher by virtue of its accessibility.” The access that the team had
to constituents of the target market undoubtedly made this the most rationale and sensible
approach.
Integrating Qualitative and Quantitative
After completing the analysis of the quantitative research, the management team sought to
integrate this data with the findings from the qualitative interviews. The approach taken was
to select the most relevant findings from the surveys and support these findings with attitudes
identified during the qualitative interviews.
Key Findings
Which payroll system do you use? (Objective 1)
Determining the main competitors in the payroll market was fundamental to the research of
CPS. From analysis: 60% of respondents use Sage payroll, 8% use „Big Red Book‟ and 6%
uses „Thesaurus‟. The component „Other‟ represents 15% which is comprised of a multitude
of other payroll providers like Collsoft, Quantum and Aquilla. The results from this question
56
were much in line with the data gained from the interview process where Sage were the most
commonly used payroll provider. (See Figure 5)
Figure 5: Main Competitors
Main Competitor's
11%
Sage
15%
Thesaurus
Big Red Book
8%
60%
Other
Missing
6%
When are company employees paid? (Objective 1)
The management team had previously identified a variance between respondents over the
time increment in which they paid their staff. This variance was confirmed through the
survey results. While most respondents pay their workforce weekly (43%), a considerable
portion pay monthly (28%) while almost a quarter of respondents paid some employees
weekly and others monthly (23%). Paying employees at two different increments had been
identified as problematic for companies when doing payroll during the interview process.
57
Figure 6: Frequency of Salary Payment
Payment Occurs
Weekly
6%
23%
43%
Monthly
Some Paid Weekly, Some
Paid Monthly
28%
Other
How much does your payroll system cost annually? (Objective 1)
It was imperative for the management team to identify how much respondents are currently
paying for their payroll system. The results from this question are taken into consideration
when developing the pricing structure for the CPS product. The following graph (Fig 7)
highlights that 28.3% of respondents currently pay €100-€200 annually with 15.2% paying
€201-€300. There were only a nominal percentage of respondents (2%) who pay under €100
for their service. Finally, it is worth noting that 30.2% of the respondents did not provide a
response to this question. The management team believes that respondents may have been
unwilling to divulge this financial information through a survey.
Figure 7: Current Payroll System Cost
Total
Missing
>€500
€401-€500
€301-€400
€201-€300
€100-€200
€0-€99
100
30.2
9.4
7.5
7.5
15.2
28.3
0
20
40
60
80
100
120
How would you rate your current software's customer service out of 5? (Objective 2)
The management team want to provide all potential customers with the best possible
customer service. Therefore estimating competitor‟s customer service rating is important to
58
identify user‟s current satisfaction level. The interview process had highlighted some
dissatisfaction among respondents towards their providers‟ level of customer service. As
denoted by the following diagram (Fig 8), 53% of respondents felt that their customer service
was either poor or average. This statistic supports the belief that there is considerable scope
for a new payroll system to improve upon the perceived mediocre standard of customer
service.
Figure 8: Customer Service Rating
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
34%
18.90%
18.90%
22.60%
5.60%
Annually, on average how many times do you need to contact customer service? (Objective 2)
The purpose of this question was to establish how often the participants contact their payroll
provider regarding customer service. While customer service had been identified as an issue
during the interviews, it was deemed important to identify the specific needs of the target
market. The feedback enabled the management team to estimate what resources and
infrastructure would be required to adequately develop this important function. Annually,
56% of respondents only have to contact customer service on five instances or less.
Interestingly 11% of respondents never contact their payroll provider regarding customer
service issues. It can thus be said that while customer service is an important function for
users, almost two thirds of respondents very rarely if at all need to contact their provider with
an issue. (See Figure 1.9).
59
Figure 9: Customer Service Contact
Customer Service Contact
6%
4%
11%
Never
2%
6%
1-5 Times
6-10 Times
11-15 Times
15%
16-20 Times
>20 Times
56%
Missing
Are you willing to switch from your current payroll software provider? (Objective 3)
The willingness of the respondent‟s to switch from their current payroll provider is a major
consideration in establishing whether CPS can acquire a respectable market share. The
feedback was positive with 56% responding „yes‟ or „maybe‟, therefore expressing a
willingness to switch. These results are similar to the responses received during the interview
process.
It is important to qualify the importance of the 38% of respondents who would currently be
unwilling to switch. As the team noted from the interviews, there was some resistance from
organisations to technological advances, yet they may be open to them if other companies
began to adopt this new system. Thus, there may be scope for convincing sceptical
respondents of the benefits and advantages of the CPS payroll system. (See Fig. 10)
60
Figure 10: Willingness to Switch Provider
Willingness to Switch
6%
15%
Yes
41%
No
Maybe
Missing
38%
If you would be willing to switch from your current provider, which would you consider
being the single most important feature of a new payroll package? (Objective 3)
The purpose of this question was to understand why the participants would be willing to
change their payroll providers. Significant annual cost savings was the primary reason that
respondents cited for possibly switching provider (49%) It is worth noting that 11% of
respondents cited a more simplified system as a motivation to switch. (See Fig 11). The
results show an overwhelming desire for small-medium enterprises to cut their payroll costs.
While the management team had identified the potential for technical improvements during
the interview process, a lower cost system would without question provide the main attraction
to potential users of the CPS payroll system.
61
Figure 11: Respondents Reason for Switching
Total
100.00%
Missing
Other
9.40%
1.90%
Not Applicable
26.40%
A Payroll System That Can Be Accessed From
Outside The Company Premises
1.90%
A More Simplified User Friendly Package
11.30%
Significant Annual Cost Savings
49.10%
0.00%
20.00% 40.00% 60.00% 80.00% 100.00% 120.00%
How much approximately how much would you be willing to pay for a new payroll service
that could be accessed over the Internet? (Objective 3)
The management team could use the responses to this question as a consideration in
determining the pricing structure for the proposed payroll system. The average price cited by
respondents who answered this question was €195. While this figure merely represents the
opinion of the target sample, it is a useful indication of what the price expectations may be
for the proposed system. In conjunction with the previous question, the results demonstrate a
willingness of respondents to switch from their current provider in order to avail of a
potential cost saving. The results of this question are illustrated in Figure 12:
Figure 12: Potential Price for CPS
800
Average Price
€195.22c
600
400
200
0
0
5
10
15
Series1
62
20
25
How reliable do you perceive Internet security to be today? (Objective 4)
The management team decided to include this question to fully understand how individuals
and organisations feel regarding security online. The results show that over 60% consider
internet security in some degree to be reliable. While 20% of respondents were undecided
only 5.7% believed internet security was wholly unreliable. These figures show that in
general, the target market is satisfied with internet security. Security had been flagged as a
major issue during the interview process. These results show a more positive attitude towards
security than the management team identified during interviews. As internet security is a
major consideration for the CPS payroll system, these results support the belief that
respondents would be comfortable in using a cloud-based service. (See Fig 13)
Figure 13: Privacy and Security Issues
Missing
Wholly Unreliable and Open to Attacks
1.8
5.7
Somewhat Unreliable
11.3
Undecided
20.8
Fairly Reliable
56.6
Very Reliable and Secure 3.8
0
10
20
30
40
50
60
If a smart phone application was developed to allow remote access to payroll information,
do you believe you would adopt this feature? (Objective 4)
This question received a mixed response. Apart from those respondents who could not decide
whether they would use an app, the remainder were split in their attitudes. The 40% who did
respond positively to the question shows that there is potential for a phone app being
developed. This response is reflective of the attitudes identified during the interviews where
respondents who were more technologically inclined espousing a more positive attitude to
phone apps (See Fig 14). The management team can conclude from the combination of
63
qualitative and quantitative data that there is potential in developing a phone app yet initially
it may not be considered as a primary constituent of the CPS package.
Figure 14: Potential Phone App
Missing
2%
Undecided
15%
Yes
40%
No
43%
Reflection
From reviewing the quantitative research approach and methodology the management team
believe that the four primary objectives have been achieved. On reflection, this was achieved
through:

The careful and methodical approach to designing questions. From analysing the
answers to the survey questions, the management team believes that respondents
could understand all of the questions contained in the survey.

Although the questionnaire contained 28 questions, most of these were closed
questions and allowed the respondent to quickly choose the most appropriate answer.

While some qualitative responses were required from open ended questions, overall
the responses were compatible with SPSS when imported into this software.

The management team ensured that groups of questions all related to a specific
research objective. This ensured that irrelevant questions were not included in the
final survey design.
64
The management team were pleased with the response rate of 80% from surveys distributed.
However from reviewing the results, the team noted that on most questions, there were a
percentage of respondents who did not provide an answer. It is difficult to speculate whether
this was because:
(a) The respondent accidentally forgot to answer that particular question
(b) The respondent did not have the necessary information to answer, or
(c) The respondent consciously refused to answer the question as they may have been
uncomfortable in providing that information.
It would be useful if the management team could identify the reason why there were a
considerable percentage of respondents who failed to answer particular questions. This would
help to improve the quality of any surveys that the team may undertake in the future.
65
Market
Analysis
66
Introduction
The management team went to extensive lengths to determine the potential growth figures
within the payroll service provider industry. The management team exhausted online
databases such as Business Source Complete, Global Market Information Database (Euro
monitor), Nexis UK and FAME and no specific data was available. The management team
also examined the Central Statistics Office and The Economic and Social Research Institute
(ESRI) for industry information. The management team also contacted the Irish Payroll
Association and the Payroll Software Developers Association; alas they too were unable to
provide the CPS team with adequate information about expected industry growth. The lack of
information regarding industry growth is demonstrative that no previous market analysis has
taken place with regard to payroll service providers. This was obviously a limitation for the
management team in terms of conducting its own analysis.
Marketing Process
The marketing process contains several different components. The marketing process is
where a company (1) understands consumers (2) creates customer value and (3) builds strong
customer relationships. In turn the company should “reap the rewards of creating superior
customer value. When value is created for the customer they in turn capture value from
consumers in the form of sales and profits.” (Armstrong et al, 2007, p7). It is the intention of
the management team to create a positive brand image of Cloud Payroll Solutions which will
reap the rewards in terms of sales and profits. To effectively achieve the marketing process, it
is the intention of the management team to analyse and implement the following steps:

Market Analysis.

Marketing Strategy

Implementation Marketing Programs
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Figure 15: The Marketing Process
Market Analysis
Marketing Strategy
Sector
Market segement
identification
Market Size
Expected Market Share
Products
Pricing
Target Market Priorities
Buyer Behaviour
Customers
Implementation
Marketing Program
Place
Promotion
Brand Positioning
People, Processes
Adapted from Dibb et al (2006, p13)
Market Analysis
Sector
Market definition is the “foundation of your entire marketing strategy” according to Silicon
Strategies Marketing (2011). Initially, the CPS management team identified an opportunity in
the payroll software services industry to provide a product to small-medium Irish businesses.
It was essential to determine exactly what services payroll companies provide to their
customers. According to Payroll Services (2009), payroll companies normally offer payroll
calculation, tax administration, payment delivery and periodic reports weekly, monthly and
quarterly.
Market Size
According to the Barnes Report (2010), the Irish Payroll Software Services Industry is valued
at €286M for the year 2011. The industry has seen an increase in sales since 2009 with
growth of 2.7%. This could be down to the economic climate where an increasing number of
firms are switching payroll providers in order to reduce costs. The industry is expected to
employ approximately 3,100 people by December 2011 (Barnes Report, 2010).
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Determining the exact market share of the main payroll competitors in the Irish market was
almost impossible to determine. This therefore made the management team‟s market research
even more valuable as it demonstrates the market share of the three largest perceived
competitors for CPS (Illustrated in Fig. 16).
Figure 16: Key Competitors
Main Competitor's
11%
Sage
15%
Thesaurus
Big Red Book
8%
60%
Other
Missing
6%
Customers
According to Anderson et al (2009, p16), targeting means to “select the particular market
segment and customer firms” that are relevant to the CPS goals and objectives. The
management team has identified self-employed individuals, family businesses, retail
businesses and professional services as potential customers for Cloud Payroll Solutions.
Specifically, CPS intends to target small Irish businesses that employ fewer than thirty-five
workers. (European Commission, 2003, p39).
Buyer Behaviour
The CPS target market does not include consumers, private individuals or households. The
target consumers are “businesses and organisations such as retailers and professional
services.” (Dibb et al, 2006, p191). These customers will purchase the CPS product to
support their internal operations and will provide them with increased payroll efficiency.
Organisational buyers differ in many ways, including (1) what they perceive to be important
(2) the decision processes that they follow (3) and the purchases that they make.
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Certain models of organizational buyer behaviour highlight the importance of buyer
characteristics, purchase characteristics, and decision process characteristics which lead to the
purchase choice (Mudambi, 2002, p526). This statement is applicable to the analysis of the
CPS market research where participants were asked:
“What would be their reason for changing a system?”The quantitative survey results stipulate
that 49.10% wanted significant annual cost savings, the second highest answer was a more
simplified user friendly package (11.30%). In the qualitative interviews the participants
expressed concern over the security and privacy aspects. During the interview with Mr.
David Howell, he believed that he would “need convincing for the system to be totally
secure.” From this, the management team identified that some potential customers would
only purchase the CPS system after any perceived security risks have been allayed. Dibb et al
(2006, p195) identifies that business buyer behaviour as “the viability of their employer‟s
business and thereby their own careers may well depend on their purchasing decisions.”
Marketing Strategy
According to Varadarajan (2010, p120) “Marketing is an organizational function and a set of
processes for creating, communicating and delivering value to customers and for managing
customer relationships in ways that benefit the organization and its stakeholders”. Having
already considered the external market forces, this section focuses on the internal marketing
options available. This involved the management team crafting a marketing strategy that
reflects the market analysis and market research. According to Doyle and Stern (2006, p17)
“A key dimension of strategy is the resource allocation decision.” The management team
decided to develop a marketing strategy for the following reasons:

Financial Resources: Each department of CPS will be allocated a budget. This
budget must be managed and reviewed periodically to ensure that it will satisfy
its intended purpose.

Accuracy: It is crucial that marketing and advertising campaigns are managed
through analytical tools in order to determine their return on investment.
Having identified these two major considerations for formulating a marketing strategy the
next step was to continue with the market segment identification.
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Market Segment Identification
The management team decided that it would not be feasible or viable to target the entire
small-medium enterprise market, at least not initially. As outlined before, the defined market
is companies with an employee base of less than thirty-five workers. The CPS management
took this approach in the belief that their payroll product would be appropriate and add most
value to this specific market segment. The CPS product is (1) cheaper than its main
competitors (2) simplified and designed towards the more basic payroll requirements of a
small business. According to Armstrong et al, (2009, p203): “By going after segments instead
of the whole market, companies can deliver just the right value proposition to each segment
served and capture more value in return.(See Fig. 17)
Figure 17: Segmentation Benefits
Segmentation
Benefit's
• Identify most and least profitable
customers
• Focus marketing on the customers
most likely to buy from CPS
• Avoid unprofitable markets
• Use resources wisely
• Improve products to meet
customer needs.
Target Market Strategies
“Target marketing refers to the choice of specific segments to serve, an organisation needs to
evaluate the segments and decide which ones to serve” (Jobber and Fahy, 2009, p117). The
management team evaluated that targeting this specific segment of small businesses was the
best approach. The CPS product will provide most value to this target market as identified
from the management team‟s market research analysis. The next step for the management
team was to identify one suitable target marketing strategy that reflected the resources,
customers and the product. (Illustrated in Fig. 18).
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Figure 18: Target Marketing Strategies
Undifferentiated
(mass) Marketing
Differentiated
(segmented)
Marketing
Concentrated
(niche) Marketing
Targeting Broadly
Micromarketing
(Local/Individual
Marketing)
Targeting Narrowly
Adapted from Armstrong et al (2009, p206)
Concentrated Marketing
The CPS management team are looking to engage in concentrated marketing in order to
target their specific potential customer bases. The management team believes that with the
current financial resources available to them this approach will ensure the viability of the
company. “Small companies generally have to adopt this strategy as they don‟t have the
resources available for competing in an entire market” (Doyle and Stern, 2006, p75).
Adopting this marketing approach is imperative for CPS, as the company can market more
effectively by modifying the product, price and programmes necessary to cater for the
defined market segment. Adopting this type of strategy will enable CPS to “efficiently target
the products towards the consumers that can be best served and are most profitable.”
(Armstrong et al, 2009, p208).
Brand Positioning
Positioning the CPS brand will help to establish this new payroll service within the target
market. The management team are aware that the positioning strategy is affected by a number
of variables related to the customers‟ motivations and requirements. The actions of
competitors within the industry will also affect the strategy. (Entrepreneur, 2011) Positioning
is based on “customers‟ perceptions and attitudes and is therefore only partly within the
control of the management team.” (Dibb et al, 2006, p247) This highlights the importance of
the market research undertaken by the management team to understand what perceptions
exist within the sample of the CPS target market. The research highlighted that security and
cost are the two most prevalent issues regarding the CPS product. The management team will
therefore aim to communicate a low cost, secure product through its various marketing
channels.
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Marketing Mix
Figure 19: The Marketing Mix
Adapted From (BBC, 2011)
The marketing mix (Fig 19) must endeavour to meet the needs of the customer by relating to
the market analysis and market strategy. The implementation stage of the marketing mix
contains five components that the management team will outline and analyse in relation to the
overall marketing plan for CPS (Dibb et al, 2006, 293). The „Four P‟s‟ is a promotional mix
of delivering value to the customers of CPS. It is similar to customer relationship
management (CRM) in that it recognises that customers are the core of a business and the
success of CPS depends on effectively managing relationships with them. The management
team intends to create “sustainable and long-term customer relationships that promote and
add value to consumer and the company.” (Kalakota and Robinson, 2000).
Research by Booz Allen Hamilton (1982), suggests that eighty-five% of loyalty to a product
or service is born from the quality of a sum total of contacts between a customer and that
product / service provider. Meanwhile, a comparatively smaller percentage (fifteen) is
generated by the quality of that product itself, its promotions or its sales literature.
Product
Armstrong et al (2009, p238) define a product as “anything that can be offered to market for
attention, acquisition, use or consumption that might satisfy a want or need.” The product that
CPS intends to launch is aimed at simplifying how payroll is done for small businesses. The
management team have therefore identified the following key factors for the product
decision.
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Product Attributes
The CPS product will be marketed as a user friendly and more affordable product compared
to its competitors. The CPS slogan is “Payroll Made Easy” which communicates this
message. This enables CPS to differentiate its product from its competitors.
Branding
“A brand provides an important function in the marketplace by allowing the customer to
differentiate products and either repeat a successful purchase or experience” (Pennington and
Ball, 2009, p456). CPS will brand itself using all accessible marketing channels as a highly
professional and reliable service provider. It is upon the successful establishment of this
brand that the company will aim to increase its turnover in the initial years of operation.
Product Support Services
Customer satisfaction is defined as “a cognitive and affective response to the service
encounter” (Yi and Gong, 2009, p1521). Since CPS is providing a service, it is the intention
to maintain excellent customer service for customers which will act as a core driver in
retaining customers and ensuring brand loyalty. To ensure that CPS is providing an excellent
customer service, the management team will seek feedback from its customers annually to
assess levels of satisfaction and to identify features that could be improved or introduced.
Price
Price can be described in a broad sense as the “sum of values that the customers give up in
order to gain the benefits of having/using the product.” (Armstrong et al, 2009, p298). To
gain a considerable market share however, the management team decided to adopt cost based
pricing. This effectively means that management assess the total cost of supply, and base the
price charged on this cost. This being said, management did ensure that this price would still
offer great value, and that it would be considerably cheaper then alternative solutions. A
value based strategy would place the management team in the consumers‟ position and
analyse what they would potentially pay for a new payroll service that operates over the
internet. To define the price, market research was very useful. It allowed the management
team to identify what potential consumers are paying currently and would be willing to pay
for the CPS product. The management team identified an annual subscription fee of €99.99c
(excluding VAT) for the CPS service. Dibb et al (2006, p663) describes this type of pricing
as: “a pricing method that tries to influence buyers‟ perceptions of the price or the product by
ending the price with certain numbers.”
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Place
CPS is a purely internet based company. As such it is not selling its service from any physical
location but over the internet. Specifically customers can purchase an annual subscription for
the CPS service from the website: www.cloudpayrollsolutions.net. Interactions between the
company and consumers will take place in the digital space.
In this way, cloud computing and e-commerce will facilitate a transition to a centralized
distribution model. The internet is thus central to the purchasing process. CPS competitor‟s
websites, generally play their most crucial role in the early stages of purchasing process i.e. in
the pre-purchase (research) stages. However, CPS invites the internet into the later stages of
this process i.e. purchase and post-purchase stage. CPS customers will download a thirty day
free trial, and subsequently purchase the software on-line. This essentially eliminates the
requirement to have an employee / contractor / partner or reseller to sell and install the
software.
This distribution factor also facilitates lower overheads, for example in employing IT
Technicians. Should a competitor‟s client experience difficulty with their payroll software,
that competitor will often deploy a team of technicians to that office. A technician may travel
to e.g. Galway, to examine that client‟s server. The new model, adopted by CPS, allows for
all data to be hosted online. In this way, CPS can conduct technical diagnostics from a
centralized location i.e. CPS headquarters, Invent Dcu.
Promotion
The CPS management will use an integrated marketing communications strategy to acquire
target potential customers. This is a system by which “companies‟ co-ordinate their
marketing communication tools to deliver a clear, consistent, credible and competitive
message about CPS and the products offered” (Jobber and Fahy, 2009, p218). The
management team have outlined the key tools that will be used to communicate the CPS
branding message to businesses in their target market. (See Fig. 20) Digital Marketing and
Personal Selling are discussed in further detail in the following sections of this report.
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Figure 20: The Promotional Tools
Public Relations
•Press Releases
•Business Awards
•SocialMedia and Blogging
Sales Promotions
•Free Trials
•Possible Affiliate Marketing
Internet and Digital Advertising
•Search Engine Optimisation
•Social Media
•Google AdWords
Personal Selling
•Networking Events and Seminars
•Sales Managment and Telesales
Traditional, above the line, (such as print advertising), hold no imminent place in any future
marketing plans. Aside from CPS‟s current limited financial capabilities, Management
believe that many traditional advertising channels are expensive and often lack focus.
Furthermore, CPS believe that such investments are difficult to track. Therefore, CPS will
instead utilise media which it believes represent a lower cost per lead, higher ROI and
measurable results.
www.CloudPayrollSolutions.net and promotional leaflets will showcase many customer
referrals. The website also illustrates all relevant company and product information, acting as
an effective sales brochure. Customer reviews may be uploaded, especially re; the transition
to the new SaaS software.
Public Relations: Press releases offer an effective means of generating free media coverage.
Ideally, the launch of CPS could potentially reach such media as; Irish Independent, The
Times, Examiner, SBP, Newstalk, Today Fm, Silicon Republic.com and TechCentral.com.
This PR would likely coincide with increasing sales and client acquisition. See Appendices,
for CPS Press Release.
By issuing a CPS press release, Management are effectively sending notification of the
company and software launch. This notification is directed first at the media, then through to
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customers, corporate clients. (This action will be complemented by other activities including
blogging, social media and possibly a “News” section of the CPS website.)
In terms of disseminating a CPS press release, there exist numerous options. One company
Director (Dara Boland) is an ex-employee of the North County Leader local newspaper. Thus
using the company‟s network, CPS hope to prompt a news story detailing the formation of
CPS, by five young, locally based entrepreneurs.
The service; Irishpressreleases.ie will allow CPS to publish and distribute its release, with no
charge. This site is regularly browsed by Journalists and Writers, actively looking for new
stories thus potentially increasing its amplification and impact.
CPS will also use paid wire services such as PR Newswire and Business Wire, which directly
distribute this content to journalists. (Kelleher 2007).
An example of a CPS Press Release may be seen in the appendices . However, before launch,
CPS will seek evaluation of its content, particularly from fellow DCU Alumni members.
Furthermore, CPS will consult the online tool; www.yourpitchsucks.com. This service allows
for pre-launch review from a panel of PR experts. This is a free service, and may help in
crafting a press release likely to gain traction across the media.
Furthermore, all company Directors are excellent networkers, an attribute which represents
an organizational core competency. This network will be greatly expanded via joining
various Associations such as Irish Payroll Association (IPASS) and Payroll Software
Developers Association (PSDA).
CPS have also made enquires to joining various other “networking organisations”. BNI
Abbey Chapter, Plato Dublin and the Small Firms Association, offer regular (monthly)
meetings and seminars, held in the early morning. CPS will use such organisations build sales
leads and stimulate referrals. Furthermore, these organisations often have presentations for
SME's. CPS have made contact with each of the above mentioned organisations and also
Enterprise Ireland re: offering to give presentations e.g. “using IT to better your business”.
CPS are also eligible to entering various business competitions. By entering, CPS may attend
Industry functions and ceremonies. Furthermore, such awards are often reported on in various
publications and would also offer additional credibility to the company offering. CPS may
put itself forward for such awards as SFA‟s “Emerging New Business” or “Best in HR
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Development” prize, Deloitte and Touche‟s “Fast 50 Rising Star” award as well as Bank of
Ireland‟s and Sunday Business Post‟s “Best New Business Idea.”
Sales Promotion: CPS will use Sales Promotion to ultimately; build sales and market share.
CPS will offer a thirty day free trial period, christened “the CPS challenge.” This aspect of
“trialability” is thought to encourage consumer adoption, especially as this product is
technology based. This, coupled with the launch of the €99 (excluding VAT) pricing model
may achieve far reaching media coverage, particularly in trade publications, such as those
commissioned by e.g. Small Firms Association‟s “Owner Manager” magazine, or traditional
print media such as Business and Leadership magazine. This, CPS believe, represents a
highly effective promotion. It will stimulate sales whilst it aligns well with the CPS
marketing message; simple pricing, for a simple software solution.
Affiliate marketing will be sought upon launch of the software. CPS will first approach
Finance Lenders to start up enterprises. For example, institutions such as Bank of Ireland and
it‟s “new business start up package”. This would see new businesses offered a two month free
trial period. Having identified the large start up costs such companies will incur and the
opportunity they represent in terms of building sales, they should be targeted. The key
success factor here, will ultimately lie in the acquisition of new clients. New businesses are
particularly attracted to CPS, as it eliminates any transition costs from current payroll
software providers.
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Digital
Marketing
Strategy
79
Website and Search Engine Optimisation
“Your small business website is the most valuable tool in your arsenal to sell your
companies‟ services. If it is too complex, disorganized or inarticulate, it communicates those
things about your business to the world” (Singer, 2008). Along with the budget available to
the management team for marketing, it is imperative to make use of free marketing tools. To
achieve this, the management team will make the following five key considerations while
designing the website.
Figure 21: Benefits of SEO
Content
The management team are aware that even if the content for the CPS website is excellent, if
users are not directed to the website via search engine, the potential of the website is not
being optimized. (Lazuka, 2010). In order to increase traffic to the CPS website, the
following should be considered:
Heading Tags
The <H1> - <H6> tags are given preference over regular text by search engines. It is
therefore imperative that the management team make use of these heading tags in the design
of the CPS website in order to reinforce the web pages overall keyword theme. (Spenser,
2006)
Navigation
When designing the website, the director of IT and IS outlined that the CPS website should
be easy for users to navigate through. Therefore as good practice users can enter the website
through multiple pages and not just the index. The navigation bar contains six buttons that is
consistent across all contents pages in order to maximise its usability (See Fig 22).
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Figure 22: Website Navigation Bar
Keywords
The management team have identified keywords as an essential constituent of the website
search engine optimisation strategy. According to Mothner (2010) “Keywords are what we
type in when we are searching for products, services, and answers on the search engines.”
The management team will implement keywords into all H1 heading tags in order to boost
search rankings. The keywords will also be included into the content of each webpage. This
approach will also assist in the search engine optimisation of the CPS website.
Image Use
When used appropriately images can provide added value to the website user (Leavitt et al,
2006). This article recommends that having a logo on each web page is beneficial for user
navigation. The CPS logo will be prominent on each page of the CPS website to create
enhanced brand recognition. It is also best practice to use alternative text for all images used
on the CPS website in order to boost search rankings. With the „Alt‟ attribute, search engines
can “determine the relevancy of page to the images used.” (Solubytes, 2011).
Figure 23: Alternative Tag for Images
Linking Social Media
Social Media will play a key part in the digital marketing strategy of CPS. It is imperative
that the CPS social media platforms are linked directly with the website.
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The management team anticipates providing a link to the CPS website on all social media
platforms in order to attract potential customers. It is imperative that the CPS team
continuously upload content relative to the CPS product on each platform. According to SEO
White Hats (2011) “finding ways to weave current and topical keywords in your headlines or
posts will ensure they come up in searches. And that‟s one of the keys to leveraging the social
networks to a small business‟ advantage”. The management team have adopted this approach
as demonstrated in on the CPS Twitter page. (Fig 24)
Figure 24: CPS Twitter Page
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Social Media
The importance of utilising different Social Media platforms is imperative for the promotion
of the CPS brand. Essentially this is a key marketing channel for the management team to
interact with current and potential customers. According to Dawidczyk (2011), “Every
company should enter the world of social media and a simple website is no longer enough”.
A social media strategy needs to be designed and executed carefully like all other aspects of
the business.
The management team believe that the social media strategy must link with the overall CPS
marketing strategy. The management team have created a S.M.A.R.T Plan for this social
media strategy. (Shin, 2010) This plan enabled the management team to outline:

Primary objectives
Attract potential customers to the CPS website where they can sign up for a free trial of the
CPS product.
Grow brand-awareness, making the CPS logo and slogan “Payroll Made Easy” instantly
recognisable.
Add additional value to the brand with updates and blogs relating to the companies‟ corporate
social responsibility, business growth and news items.

How to measure the objectives
The management team agreed that an analytical approach is crucial to determining whether
the social media strategy is achieving the set out objectives. Having set up Google Analytics
for the CPS website, the management team can monitor traffic coming from social media
platforms in the „Traffic Sources‟ report under the referring sites tab. Platforms like Facebook
also offer an in-built analytical tool where CPS can monitor the number of users accessing
the page and how many interactions updates are generating (See Fig. 25).
Figure 25: CPS Facebook Insights
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
Feasibility analysis of these objectives
The management team believes that all the before mentioned objectives are
achievable over time. To what exact degree this social media strategy will play
in generating sales is difficult to determine until the product has been launched
onto the Irish market, yet it will at the very least continue to grow the CPS on an
on-going basis.

Relevancy and time frame to achieve objectives
The management team believe that the specific social media platforms that CPS
is using are relevant to the business. As long as these pages are maintained
continuously and with quality, professional content they will assist in growing
the CPS brand as a highly reliable, high quality Irish company. There is no
specific time frame in order to achieve these objectives per say as increasing the
number of followers on these pages is an on-going task as the company wishes
to grow the brand steadily.
Facebook has approximately 1.9 million Irish users, which is 42% of the total population
(Social Bakers, 2011). The management team intend to use this platform for branding and
customer engagement. According to Marketing Jive (2007), Facebook can be a great resource
for generating brand awareness. Facebook is popular amongst various age demographics and
if used correctly can aid relationship building with the CPS target market. The CPS Facebook
business page is focussed on interacting with current and potential customers. Ultimately the
goal is send traffic from the Facebook page to the company website. Specifically, the
management team intends to do this by attracting potential customers with updates about the
30 day free trial for the product. (See Fig. 26)
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Figure 26: CPS Facebook Page, Free Trial
Note how the update links to the relevant page on the CPS website.
There is an estimated 150,000 Twitter accounts in Ireland (Hand, 2011). Similarly with this
social media platform, the management team wishes to use Twitter as another means of
communication for both inbound and outbound messages. These messages to and from CPS
will be brief and concise as there is a 140 character limit with Twitter updates. Twitter will be
to inform users about relevant company updates, special offers and new product features. The
following screenshot (Fig. 27) demonstrates the type of content that the management team
has uploaded to Twitter in order to attract more followers and to engage with them. Note that
communicating the security of using cloud-based services was a key motive in these tweets.
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Figure 27: CPS Twitter Feed
According to Clean-cut Media (2009) YouTube allows users to watch and interact with
videos online. The management team intend to use YouTube for informational purposes to
help customers learn about the new service. A video stream has been set up to include
instructional videos to assist users who are encountering difficulty with certain aspects of the
CPS system. The added benefit of this is that users will be able to troubleshoot any issues that
they are having without having to contact CPS customer care. Initially, the CPS management
team has created a short YouTube video introducing the CPS service as well as some basic
instructional videos that demonstrate how the system will be used. The management team
believes that these videos will be key in attracting customers as they highlight the userfriendliness of the system which is one of the CPS key selling points. YouTube is therefore
an excellent platform for the management team to build the brand and attract new customers.
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It also can also be used as an SEO tool. According to PR Scoop (2011) “Videos have an
enormous impact on SEO rankings. Generating brand exposure through building links back
to your site, which rank well on every search engine”
Figure 28: CPS YouTube Channel
The purpose of the management team setting up a CPS Flickr account is to promote the
company image by providing high-quality photographs relating to the company and its
product.
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In the future this platform will be to advertise related company events and seminars which
boost the profile of the company. Flickr will also provide CPS with an increased SEO
ranking. The Flickr account enables users to tag photos, provide descriptions about the
photos, and highlight the website and company name (Small Businesses, 2011). This is
illustrated in the following screen shot (Fig. 29).
Figure 29: Screenshot of CPS Flickr Account
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Paid Advertising
According to The Amarach Report (2008) search engine marketing is one of the fastest
growing categories of advertising expenditure. The report also concludes that searching on
Google is one of the most popular Irish consumer activities.
Google AdWords
For CPS using Ad Words it is crucial to growing the company brand and increasing traffic to
the website. The management team believe that it is essential for the CPS website to be
appearing in the top ten search results on Google search for terms like “payroll Ireland” and
“small business payroll”. It is highly likely that competitors like Sage and the Big Red Book
are using Google AdWords so it is crucial that CPS engage with it also in order to remain
competitive in the digital space. There is certainly an opportunity for CPS to gain some
ground even against these competitors by investing in an AdWords campaign. The following
screenshot (Fig 30) shows that only „Thesaurus‟ showed up in the top five search rankings for
“payroll Ireland”:
Figure 30: Google 'Payroll Ireland' Search Results
The management team have set up an AdWords account as part of the online marketing
strategy. The following screen shot (Fig 31) provides sample of the types of keywords that
the CPS team will initially target in order to maximise the click through rate from relevant
traffic.
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Figure 31: Sample Keywords from Adwords Campaign
The management team initially anticipates setting a €20 daily budget as a test to identify
which key words will reap the highest click through rate and are most relevant to the
particular webpage that they direct the user to. The CPS team believe that this is the most
sensible approach in using the marketing budget wisely rather than trying to acquire a high
traffic volume initially by simply paying high cost per click rates for search terms. Using the
display network to attract relevant traffic is also a major consideration for the management
team. This method can be successful in placing the CPS advertisement on associated payroll
and business search results pages.
Paid Google Advertisements
The CPS management team is dedicated to apportioning a considerable amount of its online
marketing budget to paid Google advertisements. The company will be able to set a daily
budget and set a cost per click rate for every time a user clicks on the link to the associated
CPS page. Note how Jefferson Payroll & Safe Guard World are both appearing at the top of
the Google search rankings for “payroll business Ireland” (Fig. 32). The red background on
these two companies indicates that they are paid links. This may be an effective way for CPS
to attract a large volume of new customers as a paid advertisement is guaranteed to show up
at the top of search rankings:
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Figure 32: Payroll Google Search
Analytics
As mentioned before, the management team will adopt an analytical approach towards
monitoring their social media platforms using the likes of Facebook „Insights‟. The
management also utilised Social Network Analysis tools; PostRank, Klout and Peer Index. A
key function here exists in allowing CPS monitor how compelling its message is, across all
its social media platforms. As CPS increase interactions, it will also seek to improve its
allocated engagement ranking. Such tools effectively measure engagement as the attention
people give to CPS content. For example, where an individual sees and reads a CPS
Wordpress blog post, and where they find it interesting or inspiring, they take some form of
further action.
Social Network Analysis tools, facilitate CPS in conducting thorough analysis of who is
using social media sites, and crucially, who within such a pool is exerting significant
influence. In actual fact, these tools offer more than that. They seek to accurately measure
influence, authority, trust, and how well the CPS message resonates with and amplifies across
its audience, hence offering a rank or valuing such activity with an online reputation
currency. Management will increasingly use such data to make alterations, in a company bid
to refine or craft a better CPS digital marketing strategy (See Appendix K).
Furthermore, Grader.com offered CPS further analysis tools, including for the company
website (www.cloudpayrollsolutions.net ) and its social media presence (See Appendix K).
For the CPS website, the management team has set up a Google Analytics account which is
also now linked in with the CPS AdWords account. The management team has considerable
experience in using this analytical tool and have relevant qualifications in using it.
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It is the CPS analytical tool of choice because of its user-friendliness. The statistics are
generated by simply adding the relevant tracking code to the html of each page of the
website. The following screenshot shows the dashboard of the CPS analytics account. The
following graph (Fig. 33) shows a comparison between two metrics: visits & pages per visits.
As traffic to the website increases, functions like this will be crucial in identifying users‟
navigation trends when they enter the CPS website:
Figure 33: Comparing Two Metrics in Google Analytics
Like any online function, the management team believe that an analytical approach is crucial
to determining the return on investment in the online marketing strategy. For example, a high
bounce rate in analytics can be symptomatic of either a poorly designed web page or
irrelevant traffic. Issues like these can be resolved by improving the design of the
underperforming content pages and by reviewing AdWords to ensure that all terms in a
particular campaign are relevant to the search advertisement. These are two examples of the
way this free analytical tool can assist the management team in optimizing their online
marketing strategy.
Sales Management
As noted in the Management Team section of this document, three Directors will exercise
particular focus on Sales; Dara Boland; (Marketing and Sales), Ian Campbell (HR and Sales)
and Graham Tate (Operations and Sales). Due to the small size of CPS, it is likely that each
of the five Directors will spend at least a small percentage of a working day, actively selling
to clients.
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Google Apps and Sales Management
As CPS are registered with Google App Marketplace, management have experimented with
various software which will aid the sales process.
Smartsheet (Fig 34) is one such application which is excellent, particularly for tracking sales
leads and monitoring sales progress. One feature which our Financial Director found to be
excellent is the interoperability with Microsoft Excel. Smartsheet thus not only allows CPS
download files, but also allows Management upload sales data which may have been
compiled offline. This will allow CPS measure and track sales activity.
Figure 34: Screenshot of Smartsheet
Nutshell is another Sales Management software CPS can utilise. The reporting functions of
this suite would be particularly beneficial to CPS (See Fig 35).
Figure 35: Screenshot of Nutshell Interface
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The management team particularly like Assistly software. This allows for CPS to input a
different profile per Director, and record data as related to each Director. Another key feature
of this software is the Social Media mode. It allows for the storing of all client interactions
(whether via, Twitter, Facebook, email or phone calls) to be stored in one centralized
location.
Personal Selling
Personal Selling is among the most important demand-stimulating forces in a CPS
promotional mix. While other elements e.g. sales promotion are seen as “pulling” CPS
software through the sales channel, the sales force provide the “push” factor in prospecting,
qualifying and closing sales. While, the internet is revolutionizing the purchasing process, the
need for personal selling is ever-present. This is especially important to CPS for several
reasons, e.g.;



The technical complexity of the software
Many clients may be experiencing credit difficulties
Need for Relationship rather than Transactional basis
Digital marketing initiatives will drive traffic to the CPS website. From here, the fully
automated process will make it possible for the client to access information, watch training
webinars, download trials and purchase the software.
However, often customers will be more likely to adopt the software, after speaking to a
human voice. This said, CPS sales activity will relate, not only to sales queries, but will also
seek to find new business. In this way, sales and specifically Personal Selling will exist as a
lifeblood of the business.
Potential Benefits of Personal Selling to CPS:

Impact (compared to other communication tools)

Targeted message (information, demonstration, negotiation)

Interactivity (amount, complexity and feedback of information)

Manage Customer relationship to build software sales

Manage customer satisfaction by co-ordinating CPS resources

Gather key customer and market information

Actively target new leads.
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Anderson, Dubinsky and Mehta, (2007) write that; “Professional salespeople need to master
basic selling strategies and tactics and then develop their own style in adapting to specific
customer types and selling situations”. Presented, in the following diagram (Fig 36) is a seven
step process, an overlapping cycle of stages, which also places an emphasis on retaining loyal
customers throughout post-sale and relationship building stages.
Figure 36: CPS - 7 Step Process
This will greatly help CPS by apply a systematic approach to actively building sales.
Step 1: Prospecting:
Prospecting has been described as the “process of searching for leads, people and
organisations that might need your products and then qualifying them as prospects or
potential customers”,(Anderson et al, 2007) On top of utilising targeted digital marketing
campaigns and press releases, CPS
will distribute newsletters to local companies and
businesses, which offer the CPS free trial.
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CPS may also use their Mailchimp account to help at this stage. From here, CPS can manage
an „opt in‟ email list, which could be contacted via Mailchimp. Besides email marketing,
newsletters and ezines, this platform also allows for postal campaigns and also RSS driven
campaigns.
Step 2: Contact/ Establish Rapport:
All CPS sales staff will act as brand ambassadors and must embody key brand attributes as
honesty and integrity.
Where cold calling is used, sufficient planning must occur into that potential client and the
client‟s business. This is vital to engage with that client, establish rapport and to actively sell
the customer benefits of CPS.
Step 3: Identify Problems:
As can be seen in the example CPS cold call sheet, it is important to establish the specific
needs of that client. Only then should the sales offer arise.
Any CPS call will thus loosely follow an approach devised by Rackham N (2000), named the
SPIN technique. This is an acronym for Situation, Problem, Implications and Needs Pay-off.
Step 4: Proposal/Sales Presentation:
After discussing the prospect‟s particular circumstances, Management can thus craft an
adequate sales pitch. It is important that Management understand that, perceived value of the
CPS software may be derived via the sale performance.
Step 5: Dealing with objections:
It is likely that CPS prospects will have objections, concerns and worries. According to
Tracey (1995) objections are good, not only that, they are essential to the selling process.
Management should expect objections, and where they do not naturally arise, they could even
try and unearth them by asking. By actively listening, CPS are establishing a good
atmosphere and potentially the basis of a working relationship.
Step 6: Closing the sale:
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CPS will try and leave any customer interactions having first secured a follow up, to keep the
lines open. The online free trial is an excellent means to achieving this. CPS can prompt the
prospect to use the trial, after which they will call to discuss and potentially close a sale.
Step 7: Deal Transaction and follow up:
Ongoing support and relationship building activities are crucial in ensuring excellent
provision of service and to ensure CPS boast excellent retention rates.
97
Industry
Analysis
98
Associated Software
ERP
Often larger companies use enterprise-wide technology systems, such as Enterprise Resource
Planning Systems. ERPs are software applications or a combination of applications
whichhelps manage and coordinate an organisation‟s resources. Often, ERP systems will
have built in HR modules named Human Resources Information Systems (HRIS) or Human
Resource Management Information Systems (HRMIS).
Some such systems incorporate
limited payroll features.
HRIS
Human Resource Information Systems are effectively software elements which record and
process personnel data. Such software packages may stand as part of a suite of software
applications (e.g. ERP) or act as a standalone application. The system may store and make
accessible, personal records such as; address, contact details and payroll details such as hours
worked, bank details and payslip. Yet HRIS themselves do not calculate the payroll function.
This said, such systems may complement a payroll system, but it is important to highlight
that such HRIS software do not have inherent payroll functionality.
Accounting Software
There are several accounting packages which offer limited payroll functionality. For
example, systems like the Pegasus Capital Gold Accounts, Intuit Quick Books, Pascal and
Peachtree offer accounts packages which help automate the sales process, track leads, sales
and expenses, monitor stock and process orders and invoices. Such systems are not
adequately tailored specifically for the Irish market and thus are slow to respond to legislative
changes for example.
Alternatives to CPS Payroll Software
There are two main alternatives to CPS, for an SME, when it comes to payroll.
In-House Payroll
It is of course possible to perform the payroll function in-house without using any automated
payroll software. Using standard accounting tools such as Microsoft Excel does allow for
complex calculations needed for payroll calculations. Manually typed reports can thus be
compiled as can pay cheques and slips. However, for many SMEs, calculating payroll and
associated taxes are complex and time consuming.
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Intuit Payroll Services sell QuickBooks, which is automated software, similar to that of CPS.
This company allows users the opportunity to use a free, limited functionality version of their
software; QuickBooks. However, this means that the SME has to calculate all deductions
manually. This still results in a rather complex activity, especially where the workforce is
made up with a mix of salary paid workers and per-hour workers whose shifts fluctuate.
A system like CPS then, can calculates correct income and deductions such as National
Insurance. PAYE, PRSI, Universal Social Charge and other levies are all made simple. The
system automatically calculates elements such as; tax codes, taxable benefits, various
allowances such as sick pay and maternity benefits and even pension benefits.
Outsourced Service
This entails management transferring the payroll function to an external service provider. By
signing a contract, the payroll services firm will take responsibility for the procurement of
payroll. The payroll service provider will seek information such as; hours worked, rates of
pay and deductions. By using IT systems or tabulating and processing techniques, they can
return reports, tax filings and pay cheques.
The 2010 Worldwide Payroll Services Industry report is the leading annual publication that
describes the industry in over 45 countries. It highlights such payroll services, in Ireland, as
employing 3,164 people in 2011, generating €286 million in sales.
(Worldwide Payroll Services Industry 2010)
Such services are conducted by a total of 45 different firms, ranging from one employee to
over 500 employees.
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The quality of service is heavily dependent upon which service provider is chosen. With a
total of 45 such service providers in Ireland, service quality is not constant and difficult to
gauge. Similarly, many price differentials exist. Often a gap between expectations and results
ensues due to an inefficient payroll process. Furthermore, this process is largely human
labour intensive and thus can be costly. This cost is likely linked directly to that human effort
i.e. how many employees on the books, how many interactions where had between the
companies or the amount of reports requested.
Figure 37: Pros & Cons of Payroll Service
Competitors
Although CPS aim to become the first and only SME focused Payroll Software Company
using SaaS, many alternative payroll software systems do exist.
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Competitor Analysis
Competition has been described as a “common and legal “battleground” in the market
amongst two or more firms with similar products or services (UN, 2010). For a critical
analysis, it is essential to know how the market is structured. The style of the market structure
can show the characteristics of the competition.
Chen (1996) underlines how, when operating in a competitive environment, management
must understand the competition and competitive forces which affect the company.
Competition in the “payroll software” space exists in two distinct segments. Enterprise
solutions cater for large corporations, governments and semi-state enterprise. CPS however,
will specifically target small businesses employing fewer than 35 employees.
Key competitors in the Irish (SME) payroll software market are presented in further detail in
Appendix D. ~ Note: All prices are excl. VAT.
102
Figure 38: Competitive Rivalry
Source: The Five Competitive Forces That Shape Strategy (Porter, 2008)
Porter‟s Five Forces of competition model is an industry analysis tool which, when used
correctly, offers CPS a structured insight into the inner workings of the industry.
According to Besanko et al, (2007) the Five Forces Model “presents a convenient framework
for exploring the economic factors that affect the profits of an industry.” The model holds
that the state of competition in an industry is a “composite of competitive pressures operating
in five areas of the overall market” (Thompson, Strickland and Gamble 2010). The key
objective for CPS is gaining advantage over its competitors, it is not always the industry it
operates in that counts, but rather, where it wants to compete in terms of the nature of the
competition. (Lowson, 2002). The CPS team have created a more in-depth Five Forces
Analysis for CPS that can be viewed in Appendix E (Page 184).
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PESTEL Analysis
The “PESTEL” framework is an excellent means of conveying, the most prominent, broad
environmental issues which may impede or aid CPS. Such analysis effectively measures the
external macro-environment in which CPS will operate. This PESTEL analysis may assist
CPS in achieving clarity in thinking but also in identifying certain factors that are likely to
influence the organisations supply and demand. The CPS management have created an indepth PESTEL Analysis that has been placed in Appendix F (Page 185) of this report.
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Strategic Group Mapping
Strategic groups are groups of businesses that are likely to respond similarly to environmental
changes and be similarly advantaged / disadvantaged by such changes. Porter (2000) suggests
that an industry could have only one strategic group if all the firms followed essentially the
same strategy. At the other extreme, each firm could be a different strategic group. (See Fig
39).
Figure 39: Strategic Group Mapping
After conducting much research, one can extrapolate that the firms, most similar to; in size,
client base and position include six of the less notable, smaller companies; Ardbrook,
Aquilla, Payback, Quantum, Collsoft and Keysolve‟s Earnie.
Figure 40: Similar Sized Competitors
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Despite being many years in operation, smaller providers like Payday only have a small
number of clients. Having conducted considerable research, including availing of free trials
where suitable, it was noted that one barrier to growth could be that of; technical proficiency.
Furthermore, it was found that such rigid systems where not particularly user friendly.
It is of course crucial to examine the larger players in the market. It is these firms that CPS
envisions experiencing the highest level of competitive pressure. The company‟s
commercialization strategy thus predominantly relates to competing with these firms and
eventually usurping them to become the payroll software of choice just for smaller firms. The
three largest operators in the Irish SME market include; Sage, Thesaurus and Big Red Book.
Figure 41: Larger Competitors
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Key Industry Success Factors
The following table is a visual representation of the performance output of key competitors,
using headings such as; customer training, support and pricing. After doing so, findings
where plotted into an excel sheet. This table (Fig. 42) illustrates the key success factors,
which the successful firms possess.
Figure 42: CSF's of Successful Firms
Platform
Implementation
Pricing
Company
Updates
Training
Single
Short Cycle
Installation
Support
Frequent
Subscription
Customization
Excellent
(Azure)accessible
CPS
Quantum
to all
Windows
Medium
Subscription
Windows
Long
Subscription
and Sign on
Earnie
BRB
Sage
Ardbrook
Aquilla
Collsoft
Payback
Multi
Short Cycle
Subscription
Multi
Short Cycle
Subscription
Windows
Medium
Subscription
Windows
Medium
Subscription
Windows
Medium
Subscription
Single
Medium
Subscription
Excellent
SaaS
Good
CD
Frequent
Good
Maximum
Poor
Maximum
Excellent
Maximum
Excellent
Maximum
Poor
Minimum
Infrequent
Poor
CD
Excellent
CD
Excellent
CD
Poor
CD
Excellent
Installed
Good
CD
Poor
CD or
(Windows)
Multi
Minimum
Frequent
Frequent
Infrequent
Infrequent
Poor
Frequent
Excellent
Infrequent
Good
Minimum
Frequent
Excellent
Maximum
Minimum
Minimum
Download
Short Cycle
Subscription
Excellent
Thesaurus
CD or
Download
CPS place great importance upon simplicity. Not just product simplicity (usability) but, in
offering the most simple total product. This relates to simplicity across various functions;
communication, purchase, pricing and support.
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Another key success factor for CPS is in ensuring a low switching cost, from existing
software to that of CPS. This cost is however not solely financial, it also relates to ease of
transition. Therefore, CPS must ensure excellent ease of deployment, learning and
integration. The simplicity of CPS payroll makes it easier to maintain its single, uniform
infrastructure. This, as will be discussed later, may afford large economies of scale.
SWOT Analysis
Conducting a SWOT Analysis is often the first stage of market planning and will help focus
on key areas, which may have featured in the previously outlined industry analysis. (Business
Teacher 2011).
SWOT analysis can be used as a strategic planning tool in assessing the internal; strengths
and weaknesses as well as the external; opportunities and threats. It involves specifying the
objective of the business venture and also identifying the internal and external factors that are
favourable and unfavourable to achieve that objective. From analysing CPS and the Irish
payroll software market, the management team identified the greatest internal strengths for
the company, the weaknesses that could internally hinder CPS, the external opportunities that
could drive growth and expansion for the company and finally the external threats that could
also have an adverse effect on the company. The management team have compiled a detailed
SWOT Analysis that can be viewed in Appendix G (Page 182).
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Competitive Advantage
“Competitive advantage grows out of value a firm is able to create for its buyers that exceeds
the firm's cost of creating it” (Porter, 1985). CPS‟s primary unique selling point lies in the
software‟s simplicity and usability versus competitors‟ complex systems. This key
discriminator of value becomes more prominent when it is combined with a penetrative
pricing strategy, charged at €99.99c plus VAT. The main competitive advantage then is that
of the vehicle which facilitates this easy to use and comparatively cheaper software; SaaS.
Sustainability of Competitive advantage
CPS believes that it will gain an advantage ahead of competitors in terms of developing
payroll SaaS for the Irish SME market. Using the first mover advantage, CPS seeks to build
market share. Where a competitor does launch a similarly priced and easy to use payroll
SaaS, CPS hope to have grown enough to use a differentiation strategy to then convey the
merits of CPS. Building a large, solid customer base, utilising exceptional relationship
management and continuous R&D, CPS aim to sustain the company‟s competitive advantage.
According to Porter (1990) there are three main conditions upon which a competitive
advantage is sustainable.
1.) The hierarchy of source. Here Porter refers to a need for high durability. Specifically he
outlines that, in this case; software should be relatively difficult to imitate. The SaaS
model may be adopted by competitors, however, CPS look upon brand image and CRM
as being difficult for competitors to imitate.
2.) Number of distinct sources. Porter highlights where many sources exist, it is more
difficult to imitate. In this regard CPS appears quite vulnerable and will use upon ongoing R&D.
3.) Constant improvement and upgrading. CPS should continue to seek out new advantages,
especially due to anticipated competitive pressures. CPS‟s small size could actually be
beneficent in this regard, due to a lack of bureaucracy and other such limiting factors
associated with larger organisations.
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Value Chain
The CPS value chain is effectively the sum of all the processes in the CPS Payroll software
product‟s creation. This includes its‟ design, pricing, procurement, and fulfilment. CPS has
crafted a company value chain, driven by customer demand and not solely technological
advancements. Only after an extensive research programme did management feel a deep
understanding of user requirements, wants and needs, was ascertained. This led to CPS
pursuing the design of a simple, easy to use system, typified by its user friendly interface.
The management team have constructed a more detailed Value Chain for consideration in
Appendix H (Page 183).
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Ansoff Matrix
Strategic Thrust refers to which products to sell to in which markets. In analysing strategic
thrust, CPS deliberate by using the Ansoff matrix (McDonald, 1999) in order to identify
which strategic direction the firm should take (Fig. 43).
Figure 43: Ansoff Matrix
(Tuto2u, 2011)
Whilst CPS could be viewed as being in at least three of the four, the management team have
decided to adopt the „Market Penetration‟ mode of the Ansoff Matrix. This is on the
expressed assumption that the work associated with developing the company would mean
CPS payroll software is close to launch, and thus has reached the end of Product
Development
This growth strategy would see CPS focus on selling the developed CPS payroll software into
the existing payroll software (SME) markets. CPS aim to penetration the market early,
especially as the threat of larger competitors also launching a SaaS model is real. This could
help CPS accomplish the following:
-
Increase CPS market share
-
Drive out smaller competitors
111
In relation to strategic options, there are four options to contemplate. The options are build
sales and market share, hold, harvest (improve profit margins) and divest (drop or sell
product). CPS seeks to build sales and market share.
Management‟s primary objective is initially not that profit maximization, but instead relates
to penetrating the market, building sales and market share. Extensive effort will be directed at
the task of new client acquisition.
Porter’s Generic Strategies
According to Besanko et al, 2007, “Industry analysis is invaluable for assessing generic
business strategies”. The management team believes that the creation of a sustainable
competitive advantage is vital to achieving its financial objectives, as well as building sales
and market share, and long term profitability.
Figure 44: Porter's Generic Strategies
As CPS enters the market as the only Payroll SaaS provider, this must be examined as the
main source of competitive advantage. In physical terms, the main difference between CPS‟s
cloud based SaaS and the existing software packages, is that CPS operates over the Internet.
On this basis, and calling upon the above if CPS are to prosper, they must choose between
two main strategies, cost leadership and differentiation (Porter, 1980).
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Cost Leadership
CPS will boast a lower cost structure. Much of this is derived from economies-of-scale
associated with aggregating a large client base via the Internet, onto one, single, vertically
integrated infrastructure i.e., the Microsoft Azure based; CPS software. Such economies of
scale will drive most value, where a large client base is established. This is because, with the
SaaS model, CPS‟s production/service marginal costs diminish as the company‟s cumulative
output increases.
The cost to CPS, of servicing each additional client becomes marginally smaller with each
new client acquisition. Comparing this to standard software packages, where many fixed
costs exists, a significant cost advantage is realised. CPS can call upon many cost benefits by
adopting its SaaS business model, for example; effectively eliminating the need for
deployable on-site technicians. The lower costs attributable to such economies of scale can
thus be passed on to CPS clients. In this way, CPS will utilise its comparatively low TCS
(total cost of service) to provide its customers with a lower TCO (total cost of ownership).
The management team believes that this is an excellent foundation upon which to build sales
and market share.
Differentiation
This is the de facto means of competition with the Irish Payroll Software. Existing players
use marketing slogans which discuss; selling solution software, rather than payroll software,
competitors engage in feature wars by adding additional or even simply renaming modules.
Each company is trying to prove a level of superiority and with superiority (perceived or real)
often brings a premium charge.
Ultimately, CPS will exercise a cost leadership strategy. The management team believe that it
is essential to ensure a strict cost structure is in place, whilst CPS builds economies of scale.
CPS is not in a financial position to commission aggressive marketing campaigns. If the
company did pay for expensive campaigns, CPS would soon reach price parity with
established competitors such as Sage, thereby diminishing the products attraction.
Before aggressive differentiation can be considered, the core of the business must be
commoditized. This being noted, CPS will make use of effective marketing ploys, yet always
streamlined or measurably cost effective. As a cloud based company, CPS will adopt cost
effective and targeted digital marketing campaigns.
113
Such activities are in line with the companies cost structure and thus support its pricing
(approximately 30% less than leading competitors). According to Treacy and Wiersema
(1995), CPS may consider three competitive strategies, or what they refer to as; “value
disciplines”, 1.) “Customer Intimacy” 2.) “Product Leadership” and 3.) “Operational
Excellence.”
CPS‟s R&D investment would result in CPS gaining a first mover advantage (SaaS model).
This prompted management to decide upon an “Operational Excellence” strategy. The SaaS
model will facilitate CPS in leading the industry in price and convenience, whilst also
achieving cost reductions, through the efficient delivery system.
Figure 45: Pricing Strategy Matrix
(Adapted from Marketing Teacher 2011)
Four main pricing strategies exist; Premium, Skimming, Penetration and Economy
(Marketing Teacher 2011). In order to lead the industry in price, whilst offering a high
quality service CPS must utilize a “penetration pricing strategy” CPS‟s cost reductions can
facilitate the setting of price low, in a bid to build sales and market share.
114
Finances
115
CPS Financial Information
“Since it is just starting out, it is important to have a financial plan right from the start to
make sure you are gaining enough revenue to not only cover business expenses but to pay
yourself and other staff” (Pierco Management Inc. 2011).
The following information will be presented via graphs, histograms, Excel and written
format:
Sales Projections for Year 1, 2 and 3
Cash Flow Statement for Year 1, 2 and 3
Balance Sheet for Year 1, 2 and 3
Profit & Loss Account for Year 1, 2 and 3
Break – Even Analysis Year 1, 2 and 3
The Revenue Model:
CPS will generate revenue through annual subscriptions. The idea of this revenue model is
that a customer has to pay a subscription price in order to have access to the Payroll service
that CPS is offering. Users are charged an annual subscription fee of €99.99c (including
VAT), to use the payroll service. This fee entitles them to access the service for a period of
exactly twelve months. This model will allow the management team to easily forecast its
predicted monthly sales based on past trends.
Figure 46: Monthly Subscription Forecast Years 1 - 3
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CPS will look to generate income in Year 1 via debt financing i.e. loan and equity financing
(start up cash). With this cash, the company will look to begin operations while also setting
aside necessary budgets for marketing and IT costs.
The following diagram (Fig 47) illustrates the sales forecast in Year 1-3. This is based on the
company‟s market research along with the anticipation that increased marketing spend will
lead to an increased number of subscriptions each year.
Figure 47: Sales Forecast
CPS recognises that no revenue model of financials projections are 100% accurate, the
company as a result will look to work with pre-defined and referenced costs rather than
making blind estimates. This approach is the most sensible and will reduce the fluctuations in
these financial projections.
In Year 1, CPS will make a loss of €19,386. The management team wishes to minimise losses
and would consider seeking private investment if substantially higher losses were incurred.
In Year 2 of trading, the company will look to make a profit of €25,888 after tax. As sales
grow steadily into Year 3, the company will look to increase employee annual salaries and as
a result will look to achieve a profit in the region of €25,356 after tax.
CPS recognizes that all costs, sales and forecasted profits/losses are based upon research,
quotations and assumptions. The company will use the financials as a benchmark but are also
aware that all figures are preliminary and could vary based on market forces and unforeseen
costs.
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Financial Assumptions:
The company will be financed by a combination of equity and debt financing, as follows:
Equity Financing:
CPS will employ 6 people, including the 5 directors as illustrated in the operations section of
this report. Each director will provide an equal amount of equity in the formation of the
company, and thus each director will be given equal shares.
Holdings of each shareholder:
Executive Shareholders
Mr Dara Boland:
Input Value: €15,000. Percentage in the company: 20%
Mr Graham Tate:
Input Value: €15,000. Percentage in the company: 20%
Mr Ian Campbell:
Input Value: €15,000. Percentage in the company: 20%
Mr Mark Allen:
Input Value: €15,000. Percentage in the company: 20%
Mr Tommie O‟ Brien
Input Value: €15,000. Percentage in the company: 20%
Assumptions regarding the input of €75,000 from the five CPS directors are as follows:
Each member will input €5,000 of their own savings into the company while also attaining
agreed family loans of €10,000 from family members. These are purely personal loans and in
no way will provide any financial burden on the company.
Debt financing:
The company will be further financed by a loan of €60,000 from AIB under the Business
Start-Up Fund. This loan offers an annual rate of 5.24% variable. (Bank of Ireland 2011)
This debt source is ideal for the company in that it was been designed for start-up businesses
like CPS and will allow the management team to negotiate terms to suit based on
circumstances and cash flow requirements.
€60,000 is the maximum amount that the
management team could borrow from Bank of Ireland due to the fact that the five directors
could not provide any personally owned property as collateral.
118
Following discussions with the Business Loans manager at Bank of Irelands Phibsborough
branch, it was agreed that a loan of €60,000 could be agreed on the basis that the directors
would offer their parents as guarantors for the loan.
Information regarding the length of the loan, the monthly repayments and the total cost of the
loan over the agreed time period is as follows:
Term (Years)
10
Loan Am ount
60, 000
Variable Intrest Rate
Monthly Repaym ents
5.24%
€639.87
Cost of credit
16,783.87
Total cost of loan
76,783.17
Grant Aid
After considerable research, the management team identified that at this stage in the
company‟s development, CPS not meet the criteria necessary to attain grant funding. This is
due to the fact that CPS currently will not be exporting their service offerings nor will they be
creating 16-25 new jobs in which all grant authorities demand as necessary criteria for any
start-up company. This criteria is set out by Enterprise Ireland at: http://www.enterpriseireland.com/en/funding-supports/Company/Have-a-Startup-Idea/
Further Investment
Once the company becomes profitable in year 2, CPS plans to invest these profits back into
the business.
This investment will allow for increased research and development into
potentially expanding the company into the U.K market.
Costs:
All relevant costs were identified as part of the management team‟s research. The
management team have since aspired to provide the best service to its customers for the
lowest cost. The company has outlined extensively in the financial bibliography the source of
all its cost quotations. The only cost that the management team found difficult to determine
was legal costs associated with incorporating the company.
119
From research, law firms charge by the hour for providing advice. It is impossible to predict
how many hours exactly it would take for a legal professional to incorporate the company,
draw up employee contracts and provide any additional consultancy advice as needed.
Requirements for the first Three Years:
Salaries will be a major expense for CPS during the first three years. Throughout its growth,
the company will require levels of funding associated with that particular period. In year 1 of
the company‟s trading, directors have agreed to take salaries of €5,000 each in order to cover
living expenses. The directors will also be eligible for as social welfare and rent allowance to
subsidise this initially low rate of income.
In year 2 of trading, CPS have identified that salaries will increase to €10,000 each as a result
of increased revenue.
In year 3 of trading each director will receive a €30,000 annual salary, while the company‟s
software developer‟s salary will rise from €35,000 - €40,000. This increase is contingent on
the forecasted sales and acts as an incentive for the directors who initially receive a nominal
salary in years 1&2.
The Pre and Start-Up Period of the Company
Pre-Trading Requirements for CPS:
Rent
500
Telephone and Internet
100
Other (Associations)
190
Computers
Office Supplies
Advertising
1,110
500
5,000
Associations:
Corporate Membership of Irish Payroll Association (IPASS) - €242.00 includes VAT @ 21%
Payroll Software Developers Association (PSDA) €100
120
BNI Abbey Chapter once-off registration Fee of €130.00, and an annual subscription of
€600.00 + VAT http://www.bniabbey.com/about_bni.htm
Data protection commissioner: (Data Protection, 2011). €90 registration fee per annum.
Taxes: CPS will be legally obliged to pay corporation tax of 12.5% on company profits. CPS
is not eligible for the corporate tax exemption for new companies as it is not a qualifying
company.
PRSI: CPS are obliged to pay PRSI for all of its employees. Up until year 3 the company
will look to add only one employee. The company‟s five current directors are not required to
pay PRSI: „‟If you are a self-employed company director, PRSI is deducted by your employer
under the PAYE system. Although the PRSI of a company director is deducted by his/her
employer it is the responsibility of each company director to ensure that the correct amount of
PRSI has been deducted and remitted to Revenue‟‟.( Department of Social Protection, 2011)
As the company currently employees five directors, they will qualify under class S as persons
whom are excluded from paying PRSI. Annual PRSI payments from year 1-3 are as follows:
Figure 48: Annual PRSI Payments
121
Figure 49: Annual Forecasted VAT Payments

In 2012 CPS will pay VAT on 900 subscriptions which is calculated at 21%, and amounts to
€18,900

In 2013, CPS will pay VAT at the rate of 21% on 1900 subscriptions, which amounts to
€39,990.

In 2014 forecasted subscriptions will rise to 2500, with VAT calculated at €52,500.

In total CPS will pay €111,300 in VAT on its first 3 years of sales.
N.B – VAT Exclusivity
The management team have calculated all financial projections on a VAT exclusive policy in
order to illustrate the true performance of the company with only incoming revenue to CPS
itself included in the financial statements.
122
Cash-flow Statements: Year 1, 2 and 3 of Trading
Note: Sales in all financial accounts are tax exclusive, thus revenue per sale is calculated at
€99.99.
Forecasted Cash flow statement Year 1 (Ending December 2012)
Cloud Payroll Solutions
Twelve-month cash flow
Pre-Startup
Jan-12
EST
Cash & Bank on Hand
(beginning of month)
Feb-12
Mar-12
Apr-12
May-12
Fiscal Year Ending:
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Jan-12
Dec-12 Total Item EST
119,090
121,332
128,990
126,232
123,891
117,633
115,292
112,534
107,694
101,936
99,595
93,337
9,999
14,999
5,000
5,000
5,000
5,000
5,000
2,500
2,500
5,000
5,000
24,998
CASH RECEIPTS
Cash Sales
89,991
Equity
75,000
75,000
Loan/ other cash inj.
60,000
60,000
TOTAL CASH RECEIPTS
135,000
9,999
14,999
5,000
5,000
5,000
5,000
5,000
2,500
2,500
5,000
5,000
24,998
224,991
Total Cash Available (before
cash out)
135,000
129,089
136,330
133,989
131,231
128,890
122,633
120,292
115,034
110,193
106,936
104,595
118,335
224,991
2,917
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
62,917
560
560
560
560
560
560
560
560
560
560
560
560
6,720
CASH PAID OUT
Gross w ages (exact w ithdraw al)
Operating costs (Azure)
Computers
Office Supplies
Advertising
1,110
1,110
500
500
5,000
Car, delivery & travel
1,000
417
417
417
Accounting
500
Telephone and Internet
100
Insurance
PRSI ER
Loan Repayments
R&D
Other (Associations)
SUBTOTAL
Other startup costs (Company
formation)
3,500
10,000
417
417
2,500
2,500
Rent
Light and Heating
417
500
0
699
188
699
188
699
188
699
188
699
188
2,500
699
188
699
188
699
188
699
188
699
188
699
188
699
8,885
678
778
188
2,250.0
3,000
3,000
254
254
254
254
254
254
254
254
254
254
254
254
254
3,307
0
640
640
640
640
640
640
640
640
640
640
640
640
7,678
2,000
2,000
190
15,571
7,757
7,341
7,757
7,341
11,257
7,341
7,757
7,341
8,257
7,341
11,257
993
1,183
9,011
115,329
339
339
TOTAL CASH PAID OUT
15,910
7,757
7,341
7,757
7,341
11,257
7,341
7,757
7,341
8,257
7,341
11,257
9,011
115,668
Cash & Bank Position
(end of month)
119,090
121,332
128,990
126,232
123,891
117,633
115,292
112,534
107,694
101,936
99,595
93,337
109,323
109,323
123
Forecasted Cash flow statement Year 2 (Ending December 2013)
Twelve-month cash flow
Cloud Payroll Solutions
onsYear 2
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Fiscal Year Ending:
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-13
Total Item EST
Cash & Bank on Hand
(beginning of month)
CASH RECEIPTS
Cash Sales
54,995
Accumulated Cashflow loss
(Previous year of trading)
-25,677
25,997
7,999
7,999
7,999
7,999
7,999
5,999
5,999
7,999
13,999
34,997
189,981
Loan/ other cash inj.
TOTAL CASH RECEIPTS
29,318
Total Cash Available
(before cash out)
29,318
29,318
CASH PAID OUT
Gross w ages (exact
w ithdraw al)
Operating costs (Azure)
Computers
Office Supplies
Advertising
Car, delivery & travel
7,500
7,500
7,500
7,500
7,500
7,500
7,500
7,500
7,500
7,500
7,500
7,500
90,000
560
560
560
560
560
560
560
560
560
560
560
560
6,720
0
0
500
500
15,000
15,000
2,500
2,500
Accounting
Rent
699
Telephone and Internet
Light and Heating
Insurance
699
699
699
699
699
699
699
699
699
699
2,500
2,500
699
8,388
125
125
125
125
125
125
750
375
375
375
375
375
375
2,250.0
3,000
3,000
PRSI
254
254
254
254
254
254
254
254
254
254
254
254
3,053
Loan Repayments
640
640
640
640
640
640
640
640
640
640
640
640
7,678
R&D
Other (Associations)
SUBTOTAL
2,500
2,500
993
993
34,146
10,153
9,653
10,153
9,653
10,153
9,653
10,153
9,653
10,153
9,653
12,653
145,832
34,146
10,153
9,653
10,153
9,653
10,153
9,653
10,153
9,653
10,153
9,653
12,653
145,832
Other startup costs
TOTAL CASH PAID OUT
Cash & Bank Position
(end of month)
-116,515
124
Forecasted Cash flow Year 3 (Ending December 2014)
Twelve-month cash flow
Cloud Payroll Solutions
onsYear
Year13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Fiscal Year Begins:
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-14
Total Item EST
Cash & Bank on Hand
(beginning of month)
CASH RECEIPTS
Cash Sales
Accumulated Cashflow loss
(Previous year of trading)
59,994
34,997
19,998
9,999
9,999
9,999
9,999
9,999
13,999
9,999
15,998
44,996
249,975
-116,515
Loan/ other cash inj.
TOTAL CASH RECEIPTS
-56,521
Total Cash Available (before
cash out)
-56,521
-56,521
CASH PAID OUT
Gross w ages (exact
w ithdraw al)
Operating costs (Azure)
13,750
13,750
13,750
13,750
13,750
13,750
13,750
13,750
13,750
13,750
13,750
13,750
165,000
560
560
560
560
560
560
560
560
560
560
560
560
6,720
Computers
450
Office Supplies
500
Advertising
5,000
Car, delivery & travel
2,500
450
500
5,000
20,000
2,500
699
Telephone and Internet
Light and Heating
Insurance
5,000
2,500
Accounting
Rent
5,000
699
699
699
2,500
699
8,388
125
125
699
699
125
699
699
125
699
699
125
699
125
750
375
375
375
375
375
375
2,250.0
4,000
4,000
PRSI
305
305
305
305
305
305
305
305
305
305
305
305
3,655
Loan Repayments
640
640
640
640
640
640
640
640
640
640
640
640
7,678
R&D
Other (Associations)
SUBTOTAL
5,000
5,000
993
993
34,396
16,453
15,953
21,453
18,453
16,453
15,953
21,453
15,953
16,453
20,953
16,453
34,396
16,453
15,953
21,453
18,453
16,453
15,953
21,453
15,953
16,453
20,953
16,453
230,384
Other startup costs
TOTAL CASH PAID OUT
Cash & Bank Position
(end of month)
-36,929.95
125
Profit and loss accounts
Note: Sales are Tax Exclusive
Forecasted Profit and Loss Account Year 2 (Ending December 2012)
Cloud Payroll Solutions
Profit and Loss Account
Year Ended 31st December
2012
CASH RECEIPTS
Cash Sales
€
€
89,991
Equity
Loan/ other cash inj.
TOTAL CASH RECEIPTS
89,991
Total Cash Available (before
cash out)
89,991
Less Cost of Sales
Gross w ages (exact w ithdraw al)
62,917
Advertising
Operating costs (Azure)
Computers
10,000
6,720
1,110
Depreciation
Total Cost of Sales
220
80,967
Gross Profits
9,024
Less Adm inistrative Costs
Of f ice supplies
Car, delivery & travel
Accounting
Rent
500
2,500
2,500
8,885
Telephone and Internet
778
Light and Heating
Insurance
PRSI
Loan Repayments
Unplanned IT costs
Other (Associations)
SUBTOTAL
2250
3,000
3,307
7,678
2,000
1,183
34,582
Profit/Loss
-25,558
126
Forecasted Profit and Loss Account Year 2 (Ending December 2013)
Cloud Payroll Solutions
Profit and Loss Account
Year Ended 31st Decem ber
2013
CASH RECEIPTS
Cash Sales
€
€
189,981
Loan/ other cash inj.
TOTAL CASH RECEIPTS
189,981
Total Cash Available (before
cash out)
189,981
Less Cost of Sales
Gross w ages (exact
w ithdraw al)
90,000
Advertising
15,000
Operating costs (Azure)
Depreciation
6,720
176
Retained Earnings (From
previous Year of trading)
Total Cost of Sales
-25,558
111,896
Gross Profits
52,527
Less Adm inistrative Costs
Office supplies
500
Car, delivery & travel
2,500
Accounting
2,500
Rent
Telephone and Internet
Light and Heating
Insurance
PRSI
Loan Repayments
Unplanned IT costs
Other (Associations)
SUBTOTAL
8,388
750
2250
3,000
3,053
7,678
2,500
993
34,112
Profit Accum ulated before
tax
18,415
Profit after tax 12.5%
16,113
127
Profit and Loss Account Year 3 (Ending December 2014)
Cloud Payroll Solutions
Profit and Loss Account
Year Ended 31st decem ber 2014
CASH RECEIPTS
Cash Sales
€
€
249,975
Loan/ other cash inj.
0
TOTAL CASH RECEIPTS
249,975
Total Cash Available (before cash
out)
249,975
249,975
Less Cost of Sales
Gross w ages (exact w ithdraw al)
Advertising
Operating costs (Azure)
165,000
20,000
6,720
Computers
450
Depreciation
231
Retained Earnings (From previous
Year of trading)
Total Cost of Sales
16,113
192,170
Gross Profits
73,918
Less Adm inistrative Costs
Office supplies
500
Car, delivery & travel
2,500
Accounting
2,500
Rent
8,388
Telephone and Internet
Light and Heating
Insurance
PRSI
Loan Repayments
Unplanned IT costs
Other (Associations)
SUBTOTAL
750
2250
4,000
3,655
7,678
5,000
993
38,214
Profit Accum ulated before tax
35,704
Profit after tax 12.5%
31,241
128
Figure 50: Forecasted Turnover - Years 1 - 3

Year 1 predicted losses of (€22,558)

Year 2 forecasted profits are calculated at €16,113.

Year 3 forecasted profits are calculated at €31, 241.
These figures are calculated in the profit and loss accounts. Thus Loans and start up revenue
are not included, this also CPS to truly estimate its sales per annum.
129
Forecasted Balance sheets for Year 1, 2 and 3 of Trading
Cloud Payroll Solutions
Bance Sheet
Year Ended 31st December
Non - Current Assets
Tangible Assets
2012
2013
2014
€
€
€
880.00
704.00
923.20
Current Assests
Inventories
Trade Recievables
Cash and Cash Equilialents
100,883.99
137,354.11
146,745.15
Total Assets
101,763.99
138,058.11
147,668.35
75,000.00
25,557.57
75,000.00
18,414.99
75,000.00
35,703.67
Total Equity
49,442.43
93,414.99
110,703.67
Non -Current Liabilities
Loan
52,321.56
44,643.12
36,964.68
Total Liabilities
52,321.56
44,643.12
36,964.68
Total equity and Liabilities
101,763.99
138,058.11
147,668.35
Equity and Liabilities
Share Capital
Retained Earnings
-
Current Liabilities
Creditors < 1 Year
Accruals
-
-
-
Sales Forecast: Trading years 1 – 3
Sales Forecast for Year 1 (Ending December 2012)
Pre-Startup EST
Forecasted Subscriptions
Jan-12
Feb-12
200
Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12
150
130
50
50
50
50
50
25
25
50
50
150
Total
Item EST
900
Sales Forecast for Year 2 (Ending December 2013)
Year 2
PreStartup
EST
Subscrip
tions
Jan-13
550
Feb-13
Mar-13
400
Apr-13
80
May-13
80
Jun-13
80
Jul-13
80
Aug-13
80
Sep-13
60
Oct-13
60
Nov-13
80
Dec-13
100
250
Total
Item EST
1,900
Sales Forecast for Year 3 (Ending December 2014)
Year 3
Subscrip
tions
PreStartup
EST
Jan-14
600
Feb-14
350
Mar-14
200
Apr-14
100
May-14
100
Jun-14
100
131
Jul-14
100
Aug-14
100
Sep-14
140
Oct-14
100
Nov-14
160
Dec-14
450
Total
Item EST
2,500
Forecasted Sales each Month for Years 1, 2 and 3:
Monthly:
Annually:
Break even Analysis Year 1, 2 and 3 of trading:
Break-Even Analysis Year 1
Total costs
Cost per product
Subscriptions needed to Break Even
2012
109,323
99.99
1093.343601
Break-Even Analysis Year 2
Total costs
Cost per product
Retained losses 2012
Subscriptions needed to Break Even
132
2013
145,832
99.99
-25,558
1,714
Break-Even Analysis Year 3
Totall costs
cost per product
Retaned losses 2013
Subscriptions needed to Break Even
2014
230,384
99.99
16,113
2,143
Monthly Break Even Forecast:
Breakeven Analysis
Time
Unit Start
Units Increment Unit Price
75
158.325 €
Units
Sales
0
75
150
225
300
375
450
525
600
675
750
825
900
975
1050
1125
1200
1275
1350
1425
1500
1575
1650
1725
1800
1875
1950
2025
2100
2175
2250
2325
2400
2475
Variable Cost
0 €
7499.25
14998.5
22497.75
29997
37496.25
44995.5
52494.75
59994
67493.25
74992.5
82491.75
89991
97490.25
104989.5
112488.75
119988
127487.25
134986.5
142485.75
149985
157484.25
164983.5
172482.75
179982
187481.25
194980.5
202479.75
209979
217478.25
224977.5
232476.75
239976
247475.25
-
Unit Cost
99.99 €
109,323.43
€
145,832.44
99.99
Contribution Margin Fixed
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
7,499.25
14,998.50
22,497.75
29,997.00
37,496.25
44,995.50
52,494.75
59,994.00
67,493.25
74,992.50
82,491.75
89,991.00
97,490.25
104,989.50
112,488.75
119,988.00
127,487.25
134,986.50
142,485.75
149,985.00
157,484.25
164,983.50
172,482.75
179,982.00
187,481.25
194,980.50
202,479.75
209,979.00
217,478.25
224,977.50
232,476.75
239,976.00
247,475.25
133
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
Total Fixed Costs
Total Costs
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
109,323.43
Net Income
€
-€
-€
-€
-€
-€
-€
-€
-€
-€
-€
-€
-€
-€
-€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
101,824.18
94,324.93
86,825.68
79,326.43
71,827.18
64,327.93
56,828.68
49,329.43
41,830.18
34,330.93
26,831.68
19,332.43
11,833.18
4,333.93
3,165.32
10,664.57
18,163.82
25,663.07
33,162.32
40,661.57
48,160.82
55,660.07
63,159.32
70,658.57
78,157.82
85,657.07
93,156.32
100,655.57
108,154.82
115,654.07
123,153.32
130,652.57
138,151.82
CPS is forecasted to break even in April 2013: The Company will have to sell 1125
subscriptions in order to break even. Up until this date, the company is being financed via
start up equity, the company loan and sales. After this date, the company will begin to make
profits based on estimated costs. CPS will break even after 16 months of operations based on
the management team‟s projections.
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Location: DCU Invent
As CPS undertook their business research study, it was quite clear that choosing a location
that satisfied the company‟s strategic requirements is essential to the success of the company.
According to (Entrepreneur 2010), finding a suitable location can be the primary concern
when deciding whether to start a business. Before the management team could develop their
business plan further, it was essential to identify the key location requirements for the CPS
business CPS contacted Ms Sue O‟Neill, operations manager at DCU Invent on the 21st of
July at 10am, to discuss the facilities, networking opportunities, cost and benefits to CPS in
choosing to locate their offices here.
There were a number of key variables that the management team identified before choosing
the DCU Invent centre.

Convenience: All five founding members are located in close proximity to the
premises. The location can be considered generally convenient for any future recruits
as it is located only 4 kilometres from the city centre. Obviously being located on a
college campus means there may be potential to recruit graduates on temporary or full
time positions in the future.

Strategic partners: The fact that Invent offers tenants a free business advice service
was a major incentive.

Cost: The Invent Centre offers very competitive rates for leasing an office space on
the premises. As a new venture, it is crucial that CPS minimise their costs.
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Facilities
The management team would wish to avail of seminar rooms and state of the art video
conferring rooms for free as part of the 12 month lease. This would obviously be extremely
beneficial for an online services company such as CPS who could provide informative
seminars about the product to potential customers and industry contacts.
Telephone and insurance costs are not included in the lease and internet connection
commands an annual fee of €300. The broadband speed is extremely high however and
suitable to the needs of CPS as a purely online business.
The CPS team would wish to establish contacts through the Invent Centre. Each month, the
centre invites top networking contacts from accounting, marketing, legal, technology and
ecommerce backgrounds.
Provisions of the lease would allow the management team to avail of secretarial and reception
services as part of a 12 month contract along with free cark parking and in campus security.
Safety and security is also a massive consideration when analysing the Invent facilities.
Security is provided by the university through CCTV monitors and the presence of security
officers patrolling the campus.
To summarise Invent provides the facilities, contacts, access to skilled and flexible workforce
which would satisfy the business needs of the CPS team and these were the primary reasons
why it was chosen as the location for the company office.
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Legal Considerations
Data Protection
Data Protection Act (1988 & 2003)
According to William Fry (2011): “many businesses will only enter into contracts with cloud
providers when have received technical and legal assurances with respect to data protection
and security.” Because the nature of the CPS business involves the processing of personal
payroll data, it is imperative that the company complies with all relevant data protection
legislation. According to the Data Protection Commissioner (2011), Cloud Payroll Solutions
is classed as both a „data controller‟ and „data processor‟.
“It is possible for one company or person to be both a data controller and a data processor.
For example, a payroll company would be the data controller in respect of the data about its
own staff, but would be the data processor in respect of the staff payroll data it is processing
for its client companies.” (Data Protection Commissioner 2011)
The company must therefore register annually online with the Data Protection Commissioner
for a fee of €90. The Data Protection Act (1988 & 2003) sets out eight specific guidelines that
a data controller must adhere to. Failure to comply with any of these guidelines would mean a
breach of the act and leave the company liable:
1. Data must be obtained and processed fairly.
2. Data must be kept for lawful purposes only.
3. Data must be processed only for the purposes that it was initially provided.
4. Data must be kept safe and secure
5. Data must be kept accurate and up to date.
6. Data kept must be relevant and not excessive
7. Data must not be retained for any time longer than necessary for its purpose
8. Personal data must be made available to the relevant individual on request.
(Data Protection Commissioner 2011)
In relation to point 7, Irish Revenue explicitly states that a company must keep a full record
of its accounts from the previous six years available for tax audit purposes. (Revenue 2011)
The onus is on CPS to provide an archive facility that allows the client to access their
employees‟ payroll data from the previous six years. Beyond the previous six years records,
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any additional data should be deleted permanently from the CPS system in accordance with
the Data Protection Act.
European Communities (Electronic Communications Networks and Services) (Data
Protection and Privacy) Regulations 2003
This is another set of relevant data protection regulations that CPS is required to adhere to as
a processor of private data in the electronic telecommunications sector. According to these
regulations, companies that are subject to this law are involved in the “processing of personal
data in connection with the provision of publicly available electronic communication services
in public communications networks in the State and where relevant the European
Community.” (Irish Statute Book 2011) These regulations provide additional guidelines in
relation to e-commerce businesses under the headings of security, confidentiality, traffic data,
location data, itemised billing and technical features. According to statute 16(1):
“A person who suffers loss and damage as a result of a contravention of any of the
requirements of these Regulations by any other person shall be entitled to damages from that
other person for that loss and damage.” (Irish Statute Book 2011)
The regulations also state that an individual/company can make a defence against any breach
of the regulations should “he, she or it have taken all reasonable care in the circumstances to
comply with the requirement concerned.” (Irish Statute Book 2011) A new e-Privacy
Directive (2009/136/EC) has come into effect since 1st July 2011 which amends the
Electronic Communications Regulations. For CPS, the key amendment relates to reporting all
data breaches to the Data Protection Commissioner. The regulations will now specifically
require CPS to:
“Notify the Data Protection Commissioner of every data breach involving a subscriber. The
company is also required to notify customers in all cases where there is a risk their data may
be accessed. Failure to do so can lead a fine of up to €5,000 per instance. The Commissioner
can also prosecute companies for allowing a data breach with fines on indictment of up to
€250,000.”
(Data Protection Commissioner 2011)
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Incorporating the Company
According to the CRO (2011), the steps involved in incorporating Cloud Payroll Solutions as
a limited company include submitting the companies‟ (1) Memorandum of Association, (2)
Articles of Association as well as (3) Form A1 which sets out the purpose and specifics of the
company along with a declaration of compliance with the Companies Act (1963 -2003). It is
possible to reserve a company name for a fee of €25. This name must be “unique and not
deceptively similar to a name that already appears on the register”. (CRO 2011) From using
the CRO search facility, there are no other companies registered under the name „Cloud
Payroll Solutions‟.
The CRO also requires new limited companies to appoint at least two directors, one
shareholder and a company secretary. The CPS name and logo will also need to be registered
in accordance with the Trademark Act 1996. Under this act, a trademark is defined as:
“consisting of words (including personal names), designs, letters, numerals or the shape of
goods or of their packaging.” (Irish Statute Book 2011) For CPS, the company name Cloud
Payroll Solutions along with the logo must be fully registered as a trade mark prior to the
product being brought to market. The CPS slogan “Payroll Made Easy” can also be
trademarked.
Employment
CPS must have contracts drawn up for the five founding members and the IT developer of the
CPS service. Specifically the management team would anticipate including stipulations in
relation to the IT developers‟ terms of employment. The agreed upon terms prior to the
period of employment would prevent the developer from:
•
Leaving the company without providing the management team with at least
one month‟s notice.
•
Working for a competitor/ similar payroll provider for a period of six months
following the termination of his contract with CPS.
•
Sharing the implicit internal knowledge of CPS relating to its service/ business
plans/ projections with any external 3rd party.
These stipulations are to protect the interests of the company who will be initially very reliant
on the skills of their developer. For the five founding members of the company, it is good
practice to enter into a shareholders‟ agreement in order to govern interactions between them
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during the course of business. According to Joyce (2010) a shareholders‟ agreement is: “like
pre-nuptials for shareholders setting up a new company and protects them in the event that
something goes wrong.” The agreement is basically a contract between the shareholders and
often contains provisions such as confidentiality, dispute resolution and unanimous
agreement. (Joyce 2010)
Insurance
For CPS, it is essential that the business covers itself with technology insurance to protect
itself against potential risks such as:

Business interruption

Employers liability

Hacking

Professional indemnity
According to Public Liability Insurance (1999, p59) professional indemnity insurance will
cover “the insured against any claims for damages for breach of their professional duty which
may be made against them during the period of insurance”. The above considerations are
paramount to safeguarding the continuing operation of the company should there be a breach
of security of the CPS service.
From research, the CPS team has consulted an Irish insurance broker: „The Insurance Shop‟
as a suitable organisation to provide the necessary insurance package to manage the needs of
the company. According to their website, The Insurance Shop has been in existence for over
thirty years and “for the last 10 years have been at the forefront of providing a range of
products covering the needs of the technology industry.” (The Insurance Shop, 2011) They
provide customised packages for internet based companies like CPS to cover the types of
risks listed above. The recent spate of internet security breaches amongst large international
firms has brought the importance of insuring against the worst case scenario to the forefront.
As a new company, CPS wants to insure that in the event of an affected party filing damages
for a security breach, the company would be able to survive a potentially large financial loss
from such an occurrence. The management team believes that by taking out this type of
insurance policy, CPS is taking every possible step to protect its long term future.
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Revenue Compliance
Budget Updates & Tax Forms
A crucial aspect of the CPS service is that it provides its‟ clients with a fully revenue
compliant system. As outlined before, CPS must archive the payroll information of every
company from each of their previous six years of operations. A key selling point of the CPS
service is that it will update the relevant PAYE & PRSI tax rates automatically with any
induced budget adjustments. The next budget is scheduled for December 2011. It is crucial
that the management team ensures that any scheduled changes are implemented within the
system; otherwise its client companies would not be complying with the latest employee &
employer tax rates.
The CPS system will also store the relevant information for companies in relation to their
employees‟ incomes tax: PAYE & PRSI. According to Revenue (2011) the following forms
are required for tax purposes: P30, P35, P45, P46 and P60. These are the only forms sent to
Revenue from a purely payroll point of view.
Corporation Tax & PRSI
From the perspective of CPS, the company will be not able to avail of an exemption from
corporation tax as set out in Section 486C of the Taxes Consolidation Act. As a provider of a
„professional service‟, CPS does not qualify for this tax relief. (Taxation 2011) The five
company directors will not however have to pay PRSI. According to the „Department of
Social Welfare‟:
“If a person is a self-employed company director their PRSI is deducted by the employer
under the PAYE system. Although the PRSI of a company director is deducted by the
employer it is the responsibility of each company director to ensure that the correct amount
of PRSI has been deducted and remitted to the Revenue Commissioners.”
(The Department of Social Protection 2011)
This consideration has been taken into account in the financial section of this report.
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Corporate Social Responsibility
The management team recognizes that corporate social responsibility has an enormous
impact on the company‟s reputation and brand identity. CPS will endeavour to engage with a
policy of corporate social responsibility and ensure that it is relevant to CPS and its clients.
The CSR policy will include considerations like ethical behaviour, employee health and wellbeing along with care for the environment and community engagement.
The Benefits of CSR
„No matter the size of an organisation or the level of its involvement with CSR, every
contribution is important and provides a number of benefits to both the community and
business.‟ (Industry Player, 2011)
The CPS cloud based service eliminates the need to produce installation disks, packaging and
posting. As the company‟s service offerings are utilized via Microsoft Azure, it will reduce
the significance of operating systems, providing easier multi – vendor support and enabling
remote access.
“I have always believed that IT is the engine of an efficient economy; it also can drive a
greener one” (Greenpeace, 2010).
Studies show that companies running applications in the cloud can reduce their carbon
emissions by 30% or more compared with running those same applications in their own
infrastructure (Greenpeace 2010).
The management anticipates reaping the following benefits from maintaining an active CSR
policy:

Reduced costs

Increased business leads

Increased reputation

Increased staff morale and skills development

Improved relationships with the local community, partners and clients

Innovation in processes, products and services
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
Managing the risks a company faces
(Industry Player, 2011)
The management team recognizes that with increased competition, substitute goods and
innovative technique and technology, corporate social responsibility is absolutely vital in
aiding the long term future of CPS.
Objectives & Requirements
Internet safety and policy leadership: The management team seek to partner with
Microsoft Azure to address key societal challenges of information and communications
technology, such as privacy, spam and data protection.
Responsible business operations: The management team seek to ensure honesty and
transparency in all of its business operations and to provide a safe and healthy working
environment for its all of its employees.
„Recent studies research by the Carbon disclosure project 2011, estimated by 2020, large
U.S. companies that use cloud computing can achieve annual energy savings of $12.3 billion
and annual carbon reductions equivalent to 200 million barrels of oil – enough to power 5.7
million cars for one year‟ (Carbon Disclosure Project, 2011)
Source: (Carbon Disclosure Project, 2011)
Intel are an example of a company whom are researching the benefits that arise from cloud
computing. A recent study from IT tycoons found that in pilot tests:
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“The combined system has reduced power consumption at the rack level by 15 per cent, when
you multiply that across 100,000 servers, that's a lot of money.‟‟ (Niccolai, 2009)
CPS recognizes that it will need a high level of commitment from all its directors in order to
implement its CRS policy effectively. The management team is fully committed to its
company operations, its employees, stakeholders and the environment and wish to actively
promote greener practices across the services industry.
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Technology Plan
The cloud based payroll service will rely on a number of different technologies and platforms
to offer the service to businesses. First and foremost, the product will utilise the economies of
scale available through cloud computing by hosting and running the payroll application on
Microsoft‟s Azure platform as a Service (PaaS) system. This service provides developers
with a platform to run applications on over the „cloud‟, allowing the company to bring its
product to the cloud without incurring large capital costs in establishing the servers and data
centres traditionally required in setting up such a system.
Customers will access the service through a web browser from any computer with an internet
connection to edit their employee‟s information and process payroll. The company‟s
application will be divided into four separate layers: (1) the presentation layer (2) the
computational layer (3) the data access layer and (4) the storage layer. There will be a web
application firewall (WAF) placed at the presentation layer as well as a database firewall in
the data access layer to prevent any unauthorised access to the application.
The following sections outline the market trends for both the cloud computing industry and
web browsers industry and how these trends will affect the CPS service as well as how a
WAF would fit into their payroll system.
Cloud Computing Future Trends
The CPS product will utilise cloud computing to offer a payroll service to organisations as
software as a service. A SaaS model offers software to customers over the internet, typically
on a subscription basis. The subscriber uses the product as a “service on demand”
(Shivakumar and Raju, 2010). The US National Institute of Standards and Technology
defines cloud computing as:
“A model for enabling convenient, on-demand network access to a shared pool
of configurable computing resources (e.g. networks, servers, storage,
applications, and services) that can be rapidly provisioned and released with
minimal management effort or service provider interaction.”
(Goodbody, 2011).
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Buyya et al. (2009) identify cloud computing as becoming the fifth „utility‟ behind water,
electricity, gas and telephony. They state that these services are accessed so frequently that
they need to be available at all times and that cloud computing will be the driver behind
making computing a „utility‟ resource. As yet, it has not quite pushed computing into the
realms of a utility resource yet cloud computing does allow organisations to benefit from
significant cost savings through economies of scale.
The cloud computing world market is expected to be as large as €110 billion by 2014 while
cloud computing sales by Irish firms alone could reach €9.5 billion in the same year.
(Goodbody, 2011) Security is one of the biggest issues that organisations have with the idea
of storing their data in the cloud. Carlin and Curran (2011) state that organisations main
concern with cloud computing is that of the privacy of their data especially when it is
individuals‟ personal information or sensitive company information that is being stored.
Goodbody (2011) predicts that these concerns will dissipate as significant portions of existing
IT activity migrate to the cloud due to the costs savings and remote access benefits associated
with it. Goodbody (2011) also states that Ireland is well-placed to become a hub nation for
the emerging cloud computing market and that 8,600 people in Ireland will be employed in
the industry by 2014. These figures demonstrate the growth potential within the cloud
computing industry and how innovative ways of utilising this technology can be developed
into a feasible business proposition.
Web Browsing Future Trends
Customers will access the CPS service through a web browser from any computer with
internet access. This means that the CPS website will need to be compatible with a number of
different web browsers like Google Chrome, Internet Explorer, Mozilla Firefox and Safari.
The management team will need to keep track of trends within the web browser market to
ensure that the service can be accessed and viewed correctly through each browser. As of
June 2011, Internet Explorer is the most widely used browser with 55% of market share
followed by Mozilla Firefox with 22% and then Google Chrome with 12% as demonstrated
in Fig 51:
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Figure 51: Web Browsers Market Share
Web Browser Market Share (2011)
7%
2% 1% 1%
Microsoft Internet Explorer
12%
Mozilla Firefox
22%
55%
Google Chrome
Safari
Opera
(Netmarketshare, 2011)
These statistics are expected to change dramatically over the next eighteen months due to the
continued growth of Google‟s web browser „Google Chrome‟. It is expected that Google
Chrome will surpass Internet Explorer as the leading web browser in June 2012 as it is
continuing to experience large growth in market share. (Marketing Charts, 2011) In addition
to these trends, the management team will need to ensure that the web application is
compatible for older versions of these browsers as not all users will have updated to the most
recent version.
Web Application Firewalls
A web application firewall (WAF) is a security policy enforcement point positioned between
a web application and the client end point. They are designed to “inspect the contents of the
application of an IP packet, as well as the contents of any other layer that could be used to
attack a web application” (PCI Security Standards Council, 2008). The CPS payroll service
will have a WAF implemented at the presentation layer of the application to inspect all IP
packets being directed towards the system to ensure that they do not contain any malicious
code.
Database Firewalls
A database firewall protects databases from malicious attacks which attempt to illegally
obtain information contained within a database. It monitors SQL traffic on the network and
protects the database against threats such as application by pass ad SQL injections (Oracle,
2011) The management team‟s intention is to place a database firewall within the data access
layer of the application to ensure that no attacks manage to reach our client‟s company and
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payroll information stored in the database. The structure of the system and placement of
firewalls will be covered in more depth in the risk management section of the report.
Risk Management and Business Continuity Plan
The CPS payroll system is required to be available 24 hours a day, 7 days a week to all of its
clients. Due to its presence in „the cloud‟, there are a number of risks that could interrupt the
provision of the service. The nature of the company‟s proposed application means that it is
required to be available to users at all times from anywhere with an internet connection. It is
therefore essential for a business continuity plan to be developed in preparation for any
unexpected interruptions in the provision of the CPS service. Cerullo and Cerullo (2004) state
that a BCP should address three interdependent objectives:
1. Identify major risks of business interruption
2. Develop a plan to mitigate or reduce the impact of the identified risk.
3. Train employees and test the plan to ensure that it is effective.
This section of the report aims to assess the risks relevant to the CPS application and to
develop a plan to reduce the possibility of these risks occurring. It will also outline what steps
will be taken to ensure that in the event of the system crashing and how to return to normal
service as quickly as possible.
Identify major risks of business interruption
Clarke (2009) discusses how e-commerce web applications will normally contain valuable
personal information and are therefore often the targets of hackers seeking financial gain.
Dedicated Denial of Service (DDOS) attacks with bot-nets can also be used to stop genuine
users from accessing an e-commerce/ cloud computing based system which could result in a
loss of users‟ confidence in the service if any unscheduled system downtime was to occur. In
addition to these technical threats, there is also the possibility of natural disasters, power
outages or telecommunications disruptions interrupting the provision of the CPS service to its
customers.
As the proposed service is required to be available at all times, the management team believes
that taking a risk limitation strategy, as outlined by Stoneburner et al. (2002), is the best
course of action in dealing with the aforementioned risks. The objective of this strategy is to
ensure that the probability of a website/ system crash is kept as low as feasibly possible and
that the CPS service is available at all times to users.
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Develop a plan to mitigate or reduce the impact of the identified risk
In an attempt to minimise the impact of a hacker gaining access to the system, the
management team intends to separate the CPS application into four separate layers as
outlined by Clarke (2009). The four layers are as follows:
1. Presentation Layer
This layer is responsible for the system interface that is presented to the end user
when they log into the system. It is the layer of the system that the end user „views‟
and interacts with when using the system.
2. Computational Layer
The computational layer performs the calculations and algorithms required for a
payroll based system. For example: adding the inputted employee payments together,
subtracting deductions and calculating tax based on an employee‟s income and tax
paid in previous wage slips.
3. Data Access Layer
The data access layer is responsible for accessing the end user‟s specific payroll
information from the storage database that holds the payroll information for all
clients. It is the intermediary between all application layers and the storage layer.
4. Storage Layer
The storage layer is the database that holds all user payroll information. Each end user
can only access information that is associated with their specific account and all
correspondence between the storage layer and other layers is run through the data
access layer.
The intention is to place access controls between each layer to minimise any impact that a
potential hacker could have on the system by placing a web application firewall (WAF), such
as „Profense‟ in the presentation layer. This firewall is designed to stop unauthorised traffic
from entering the system and it also blocks common security risks like cross site scripting
and SQL injection. (OWASP, 2010). At the computational layer level, additional runtime
protection technology will be deployed in the form of an application framework filter to
further protect the system whilst a database firewall will be placed at the data access layer to
prevent any malicious data packets reaching customer information in the storage layer. These
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measures are taken to minimise the potential impact that a hacker could have on CPS in the
unlikely event that they were able to gain unauthorised access to the system. A diagram of the
system architecture can be viewed in Appendix K (page 191).
In the event that the system was to experience unscheduled down time, it is crucial that the
adverse impact is minimised. It is therefore imperative to have live backups taken so that the
entire system (users‟ payroll information, archives for example.) can be restored with
minimal interruption to the service offering. These backups would be stored in a separate
storage database on Microsoft Azure servers in an entirely different location to the primary
storage database. This is to ensure that if the main site was to crash for any reason, then it
could be restored and live within as short a timeframe as possible.
Other potential risks include physical risks such as natural disasters and power outages that
could affect Microsoft Azure‟s hosting and storage servers that hold both the CPS application
and database. To minimise these risks, Microsoft employs a number of security measures to
ensure that the data contained on their servers is always available to their clients. They limit
access to their facilities to a very small number of operations personnel who must regularly
change their administrative access credentials making it difficult for unauthorised personnel
to gain access to the servers.
Each of their data centre facilities has a minimum of two sources of electrical power as well
as the ability to generate their own power in the event of an extended off-grid operation. This
allows Microsoft to continue to provide the Azure platform and service in the event of a
power outage to any one of their data centres. These factors ensure that the CPS service
should be able to withstand a number of physical risks that online businesses need to contend
with while hosted on Microsoft‟s Azure cloud platform.
Train employees and test the plan to ensure that it is effective
Employees will need to be trained in the procedures to be taken in the event of a system crash
to ensure that the application can be restored and running with minimal interruption to user
access to their payroll information. The testing of the plan will need to ensure that the all
recovery methods are up to date and accurately mitigate or reduce the impact of any newly
identified risks (Cerullo and Cerullo, 2004).
Revisions of the plan will need to be made on an annual basis to ensure that it is still up to
date and effective as the company‟s customer base increases.
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Why Microsoft Windows Azure?
CPS recognizes that providing a cloud-based service that is, affordable, reliable and easy to
access is essential to the integrity of their brand. CPS requires an application hosting platform
that is secure in storing sensitive company payroll data. The management team identified the
potential for a cloud-based payroll system that would be more affordable and could be
accessed remotely. CPS researched a number of hosting providers including Google Apps
and Amazon Elastic. After careful consideration, CPS chose to adopt Microsoft Azure as the
platform for their service. (Available at: www.microsoft.com/ireland/windowsazure).
CPS chose Azure for a number of reasons. One of the most important elements was that
Azure is platform as a service (PaaS) rather than an infrastructure as a service (IaaS),
meaning that there is less designing involved in establishing the CPS application.
(Source: http://incomingit.com)
Windows Azure is also ISO 27001 certificated which is an internationally recognised security
standard. As identified during the market research process, communicating the high security
and integrity of the CPS product is crucial in convincing sceptical potential customers about
using an internet-based payroll system. Already in Ireland, there appears to be a lot of
confidence in the Azure platform:
“Microsoft has completed 6,000 Irish installations of its cloud-based Windows Azure
platform, according to senior executives at the firm. The American software giant hopes to
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see 100,000 installations across its Irish customer base by the end of 2011.” (The Sunday
Business Post, 2010)
Another advantage of the Azure cloud platform is its‟ „robust availability.‟ According to
Kaufman & Venkatapathy (2010) “Windows Azure provides numerous levels of redundancy
to provide maximum availability of customers‟ data. Data is replicated within Windows
Azure to three separate nodes within the Fabric to minimize the impact of hardware failures.”
From a legal perspective, it is essential that CPS maintain control over what geographic
location the client‟s payroll data is stored. This was another key motivation in choosing
Azure. Of this Kaufman & Venkatapathy (2010) remark:
“Windows Azure customers choose where their data is stored. Data in Windows Azure is
stored in Microsoft datacentres around the world based on the geo-location properties
specified by the customer using the Windows Azure Portal. This provides a convenient way
to minimize compliance risk by actively selecting the geographic locations in which regulated
data will reside.” (C Kaufman and R Venkatapathy, 2010)
Finally, another motivation for choosing Azure was the fact they were named as the „Best
Cloud Service at Cloud Computing World Series Awards‟. This international recognition
shows the high quality and integrity of the platform. By building their service on Azure, the
management team believe that they are adopting the most secure and reliable service
available to them.
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Interface Design
The management team created a prototype interface for the CPS payroll web application to
display how the system would be constructed and designed so that users will find it easy to
use and navigate around. The first step taken in the interface design process was to identify
who the target users would be and to tailor the design to their specific needs. The target user
had already been identified in our business plan as a payroll operator for a small Irish
business. Payroll operators in small companies tend to complete the payroll for their company
in addition to their normal work duties and as such the main objective for the CPS system
was to emphasis its simplicity. A prototype of the application‟s interface can be viewed at
www.cloudpayrollsolutions.t35.com.
The management team would expect the vast majority of the application‟s users to fall into
the “knowledgeable intermittent users” bracket as outlined by Shneiderman and Plaisant
(2010). They tend to be intermittent users of a variety of systems, have stable task concepts
and a broad knowledge of interface concepts but may have difficulty in retaining the structure
of menus or the location of features. Ordered structuring of menus and consistent sequences
of actions will increase the ease of use for these users while allowing them to undo their
actions is necessary to support a relaxed exploration of features (Shneiderman and Plaisant,
2010). The team kept these guidelines in mind when creating the prototype interface for the
application. The particular design of the interface ensures that the application is consistent
throughout each page and is easy for users to navigate.
When designing the prototype interface, the management team used the twelve design
principles as set out by Benyon (2010) in his book “Designing Interactive Systems”. These
principles outline the considerations that are required to create an effective interface that
users can easily learn to use and navigate. The twelve principles are as follows:
1. Visibility
7. Feedback
2. Consistency
8. Recovery
3. Familiarity
9. Constraints
4. Affordance
10. Flexibility
5. Navigation
11. Style
6. Control
12. Conviviality
(Benyon, 2010)
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These principles are divided into three separate groups: learnability, effectiveness and
accommodation, each of which is concerned with a different element of the user experience
with the created system. Principles 1 to 4 are part of the learnability grouping which is
focused on access, easy of learning and remembering, principles 5 to 9 belong to the
effectiveness grouping which focuses on ease of use and safety while 10 to 12 are part of the
accommodation group which aims to accommodate differences between people (Benyon,
2010).
Navigation
The management team based the interface design around these twelve principles to ensure
that clients would be easily able to use and navigate around the CPS system. The team
searched for a number of user interface templates online and eventually decided upon using
one of Adminizio‟s XHTML/CSS templates as a basis for the application‟s structure as it
satisfied most of the before-mentioned principles. (www.adminizio.com) The template
allowed the team to create a user-friendly design structure that could be consistently
implemented throughout each page on the site. In addition to this standard navigation
structure, the user also benefits from their past knowledge of using web browsers to aid their
usage of the application (Cooper, 2007). For example, the user will be familiar with using the
browser‟s „back‟ button to return to the previous page to undo a mistake.
The application‟s homepage contains links to all elements of the payroll package, providing
users with links to all sections of the application. Users can click on the links from the menu
on the top-left corner of the page (marked with a red box in Fig. 52) which will take them to
any of the six main sections of the application (Home, Set Period, Employee Details, Enter
Timesheets, Reports, Archives) and this menu is present on each page to allow simple
navigation throughout the entire application.
This menu is also organised in the sequence that a payroll administrator would process a
standard payroll period to aid their use of the application. (For example: set period, enter
employee details, enter timesheets, and view reports) The centre of the homepage contains a
dashboard which displays icons which provides links to the main sections of the application
and an option to print employee payslips. (Fig 52)
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Figure 52: Navigation Structure of Homepage
The team organised the links in this manner to ensure that the application had a consistent
navigation source throughout each page so as to standardize task sequences for users. This is
promoted by Shneiderman and Plaisant (2010) as a key design feature for an effective
interface. It was also chosen as it aligned with Benyon‟s (2010) „effectiveness grouping under
the navigation‟ principle as the menu is present on every page of the application thereby
providing a consistent navigation structure that a user can easily learn to move around the
application. This consistency is also regarded as a key aspect of interface design as it allows
users to become familiar with the workings of a program. (Mandel, 1997)
The template was also chosen as it provided the opportunity to place a menu on the left hand
side of the page to be utilised as a navigation structure for separate sections. For example: on
the employee details page, the menu has the options of adding a new employee, viewing the
employee‟s details, viewing their recurring payments or deductions, their archived timesheet
history or any notes that they have placed on the employee‟s file. This feature was added to
further aid users‟ navigation whilst the menu options were all designed clearly as buttons to
inform users that they could be linked to different sections of an employee‟s profile from this
menu. Tidwell (2006) states that each page should have an “escape hatch” to aid usability. An
escape hatch is a link to a page that a user is familiar with and it is provided on each of the
CPS application pages through the „Home‟ link in the top left corner of the page. Clicking on
this link will direct the user straight back to the homepage thereby providing them with an
“escape hatch” to an area of the application that they are familiar with. (Fig. 53)
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Figure 53: Navigation Structure for Employee Details
The management team took all necessary precautions throughout the design process to reduce
the possibility of a user created error occurring in the application.
Error Prevention
Shneiderman and Plaisant (2010) identify error prevention as the “fifth golden rule” of
interface design. To satisfy this principle, the team attempted to create a system that required
the user to input as little amount of information as possible. As the application will calculate
an employee‟s pay, it is inevitable that users will have to input data into the system to allow
the payroll to be calculated. In areas where it is absolutely necessary for a user to enter
information (i.e. adding a new employee, entering timesheet information), the management
team has provided clear direction as to how the data should be inputted by labelling input
fields that is required as the screenshot (Fig. 54) of the new employee page demonstrates.
Figure 54: Add New Employee
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The „enter timesheet page‟ (Fig. 55) was designed in a similar fashion to other payroll
software by providing a table for timesheet entry where the user enters the relevant
information into the required boxes of the timesheet. It is the management teams‟ intention
that boxes that are required for numerical information (i.e. hours worked & rate of pay) only
allow the input of digits to reduce the potential for errors when users input information.
Figure 55: Timesheet Entry Page
Further steps taken to reduce the potential of a user encountering an error can be viewed on
the set period page (Fig. 56) as the team implemented drop down menus for the period
number to limit the responses that a user can enter to the system. The example displayed in
the following screenshot, illustrates how this would appear for a user running a monthly
payroll and setting the first payroll period. Their options will reduce as they continue to set
periods i.e. for the next period they would no longer have the option of 1 to prevent them
duplicating past pay periods.
Figure 56: Set Payroll Period
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Conviviality
Benyon (2010) states that conviviality is an important part of any interface design. He
describes conviviality as “allowing people to join in, to support and create communities”. The
management team plan to satisfy this criterion by providing links to the CPS Facebook and
Twitter profiles on each page of the application interfaces. This will allow users to engage
and interact with the company and express their views on the CPS application. These pages
will be used to generate a community around the product and allow user attitudes to be
implemented into any further interface design changes.
Figure 57: Links to Social Media
The management team believes that the design principles and guidelines have been
effectively adhered to in the design of the CPS application prototype interface. The interface
should allow users to easily navigate their way around the application and provide indicators
as to the method in which application should be utilised. The management team feel that this
interface will assist a new customer using the application and help them to make a seamless
transfer from their previous software to the CPS cloud application.
158
Application Security
The nature of the CPS payroll service requires users to store highly sensitive company and
employee information on servers that are not controlled or owned by their own organisation.
This understandably can lead to a hesitation from payroll administrators in using such a
service as the data will be stored outside of the organisation itself. This raises the issue of
privacy and data security concerns amongst some businesses. The management team aim to
counteract this by enacting a number of security measures to ensure the confidentiality of
users‟ information and thus grant users piece of mind whilst using the CPS service.
Greenstein and Vasarhelyi (2002) outline five categories of security services that are used to
ensure that electronic messages sent between a user and a website are kept secure: These five
categories are:
1. Confidentiality
The contents of a message must remain confidential when sent electronically between
two parties: it should not intercepted and read by any other parties. Greenstein and
Vasarhelyi, (2002) state that the technique used to ensure confidentiality is
encryption. This technique hides the contents of a message when being sent and can
only be comprehended through a corresponding decryption process.
The management team intend to use 128-bit encryption using the Secure Sockets
Layer (SSL) protocol to ensure that all information sent between users and the CPS
website is kept confidential and private. The management team intend to obtain the
True BusinessID which is a premium SSL certificate provided by „Secure Certs.‟ This
package also provides the website with the patented “Smart Seal” technology which
embeds an image on all legitimate pages of the CPS website site with a True Site
badge that displays the company name and a timestamp with the current date and
time. This image cannot be replicated on other sites attempting to “phish” information
from users and therefore offers further assurances to end users that their information
is secure.
159
2. Integrity
Integrity ensures that the message received is exactly the same as the message
transmitted by the sender. This can be achieved by utilising an integrity check value
which allows the recipient to verify if a message has been altered in any by using an
algorithm to identify the correct check value. If a message is altered, a different check
value will result thus notifying the recipient that the original message has been
changed. (Greenstein and Vasarhelyi, 2002)
By utilising check values, the management team will be able to ensure that
information received on the server side is the original data as sent by the end user and
has not been tampered with en route.
3. Authentication
Authentication refers to the verification of the sender of a message to ensure that the
sender is who they claim to be. To achieve this, each user will have a login username
and password to verify the user‟s identity before granting them access to the system.
This is similar to other online services such as Gmail and Hotmail. The Microsoft
Azure platform which the CPS application will run on uses SMAPI authentication
running over SSL to ensure that only authorised end users can gain access to the
service (Kaufman and Venkatapathy, 2010).
4. Non-repudiation
This ensures that there is irrefutable proof of the origin, receipt and contents of an
electronic message. The CPS system will record each user interaction with the SaaS
platform and provide this information to users, on request from the reports section of
the application. This record will allow users to see when changes to their payroll
details have been altered, what was changed and from what IP address they were
accessed from.
5. Access Controls
This consideration is focussed on limiting access to data and systems to authorized
users only. Pearson (2009) states in his article “Taking Account of Privacy when
Designing Cloud Computing Services” the importance of establishing access controls
governing access to personal information stored in the cloud. This will be achieved
160
through providing unique company logins and passwords for each end user which will
permit them access to their specific payroll information.
In addition to these
passwords, stateful packet inspection (SPI) firewalls will be implemented to inspect
all data packets and prevent unauthorised access to information. These firewalls only
allow packets matching a known active connection and reject all other packets thereby
helping to prevent unauthorised connections to companies‟ payroll information and
are used by cloud based companies such as salesforce.com to protect their network
from unauthorised access. (Greenstein and Vasarhelyi, 2010).
In addition to meeting these security criteria, the CPS software will run on the Microsoft
Azure platform which is certified in ISO 27001 Information Security and Management
System (ISMS), ensuring that users‟ data is managed and secured according to best practice
standards set by the International Organisation for Standardization (Kaufman and
Venkatapathy, 2010). These security procedures coupled with the assuranceg that their data is
kept secure on Microsoft‟s Azure data servers should allay a number of security concerns that
potential customers may have with the CPS service.
161
Application Pseudo code
A software developer will be required to develop the application and prepare it for launch to
the market. The software developer‟s position will report directly to the Director of
Information Technology and Information Systems. The role requires an individual who is
experienced in creating applications and also has a good knowledge of networks. The
position will include but not be limited to the following responsibilities:

Develop a payroll web application to be run as an SaaS model

Maintain the system to ensure that it is fully functional for all users.

Stress test the system to ensure its reliability under a large amount of traffic

Monitor response times to ensure that they are not hindering users‟ experience of the
application

Regularly test the system for bugs, errors etc.
This section will set out a pseudo code blueprint of how the application code will be
structured by the software developer. This is not a complete working of all the code that is
required to get the proposed application up and running. The main objective of this section of
the report is to provide an overview of how the application will run and calculate payroll on a
period by period basis. The application has been divided into a number of „classes‟ which are
displayed below.
Employee Class
// This class‟s function is to store details on individual employee‟s by creating an object for
// them. The details to be stored would comprise of name, address, PPS numbers, PRSI code,
// year to date gross pay and tax paid figures.
List of Operations
-
Provide set methods for all employee details i.e. name, pps number, annual
tax credits, year to date gross pay figure etc.
-
Provide get methods for each of the set methods created to allow other
classes to call on specific individual employee details when required.
162
Set Period Class
// This class‟s purpose is to the establish the payroll period for the company.
List of Operations
-
Create set methods to set the payroll period number as an Integer variable
and the pay date as a String variable. For the payroll period number
provide options of 1 – 53 for a weekly payroll (depending on the pay day
some companies will have 53 pay periods if they are a weekly payroll e.g.
there are 53 Saturdays in 2011 so if a company pays on a Saturday they
will have 53 pay periods this year), 1 – 12 for a monthly payroll, 1 – 24 for
a fortnightly payroll etc..
-
As periods progress then this list of options reduces to prevent a user
mistakenly entering the same period number twice and creating an error.
For example, after previously entering period 1 the next time the user tries
to set a new period their list of options will start from 2 up to 53 for
weekly payrolls, 2 to 12 for monthly payrolls and so on.
-
Provide get method for period number and pay date to be called upon by
other classes.
Timesheet Calculation Class
// This class is used to calculate a timesheet for each individual employee.
List of Operations
-
Take information inputted by user into timesheet on application interface
regarding any payments and deductions for the specific employee.
-
Use get methods from employee class to call on the specific employee‟s
year to date gross pay and tax paid figures and their period tax credits
figure. These figures will be used in the tax due calculation for this period.
-
Calculate tax and USC due this period using if statements to determine if
the employee is due to pay a higher rate of tax (41%) otherwise calculate
163
all tax at the lower rate of 20%. Add the tax due value to the year to date
tax paid figure and add the gross pay this period to the year to date gross
pay figure, then using the Employee class set methods set this figures as
the new year to date tax paid and gross pay figures.
-
Send information for this period to payslip class to generate a payslip for
the employee object.
Payslip Class
// This class generates a payslip for every employee for each separate pay period.
List of Operations
-
Receive information from the Timesheet Calculation class regarding
figures (i.e. this periods nett pay, gross pay, tax deducted etc.) to be placed
on employee‟s payslip.
-
Get period number and pay date by calling on get methods in Set Period
class.
-
This information is then printed to file for each specific employee using
the figures supplied from the Timesheet Calculation class and by calling
the get methods in the Employee class. These payslip files can be accessed
and printed by the user.
-
If using the email payslips option the payslip will be printed to a pdf file
and then encrypted with password set by the user and given to the
employee. Send payslip in pdf format to employee‟s email address using
get method for email address in Employee class.
-
Send information to reports class for compilation of different reports.
Reports Class
// The reports class creates a number of different reports for each payroll period by adding
164
// totals from each employee payslip.
List of Operations
-
Receive employee gross pay this period, tax paid this period, USC charge
this period etc. from Payslip class use all relevant figures to compile
reports for this particular payroll period to create a number of different
company-wide reports.
-
Use get methods from employee class to get any required information (i.e.
name, address, pps number) when generating P45 details reports, P60s etc.
The above classes are a general blueprint of how the application layer of the company‟s
product will be constructed. A software developer will be hired to code the entire application
which will be more in depth than the outlined pseudo code classes. The completed
applications classes will be more intricate than the above pseudocode which is intended to
give an overview of the application layer‟s structure. In addition to this, the management
team expects to receive support from Microsoft in (1) establishing the application on their
Azure platform and (2) linking the interface with the storage database to allow the application
to function correctly.
165
Future Recommendations
The management team have outlined a three year plan for the CPS service in this report.
Beyond this time-frame there are a number of objectives and goals that the team considers to
be essential in allowing CPS to continuously grow and prosper not only in the Irish markets
but also potentially abroad in the medium term.
As outlined in the CPS business and revenue models, the company will become profitable in
year two. The management team recognizes that these forecasts are only estimates and costs
and revenues may fluctuate over this time period.
In year three, the company anticipates hiring a market research company in order to assess
the size of the sole trader market in Ireland. Sole traders would currently constitute a part of
the target market but the management team could not identify specific figures with regard to
how many sole traders are operating in Ireland. In year three, the company will be profitable
and so the management team can apportion a larger budget to research and development to
assess the potential of the sole traders market.
The management team have also identified a number of strategic manoeuvres that could
assist CPS in maintaining its competitive advantage by reducing its internal and external risks
while also increasing its market share in the payroll service industry:
Entering the UK:
In year four, the management team would seek private investment in order to enter the British
market. CPS believe that this as an inevitable step in order to ensure the company‟s long term
future. As CPS would be exporting the service abroad, the company would be eligible for
financial aid from numerous county boards along with Enterprise Ireland.
CPS anticipates undertaking extensive market research in year three in preparation for this
potential expansion. Should the research demonstrate that there would be a viable market for
the CPS system, additional investment would be sought in order to initiate this expansion into
the U.K market.
Additional Features:
CPS recognizes that in the future, a basic payroll system may not meet all the requirements of
its users as their clients expand and require additional features. In year four, the management
team propose to develop „add-on‟ reports and functions for companies that would require
166
such features. CPS would charge a fee for this service in addition to the annual subscription.
Additional features could also include holiday processing along with advanced reporting
which would allow users to create their own reports.
This will require substantial research and development and the management team would
anticipate increasing their R&D budget from year three onwards to pave the way for such an
innovation.
Potential sale of the company:
CPS will hope to have gained a significant proportion of their target market by year three.
According to financial projections, this will be approximately 37% of the specific section of
the SME market that CPS is targeting. Should CPS achieve this objective, there is no doubt
that it would make an attractive prospect for one of its competitors to buy-out. In the event
that CPS did receive offers for a buy-out, the company may need to consult a financial
advisor who could have the company valued and assess the financial pros and cons of such a
sale to the five directors.
167
Group Reflection on the Practicum Module
The practicum module required the group members to demonstrate an array of competencies
in order to compile this practicum report. Competencies such as teamwork, leadership,
interpersonal skills and project management were developed over the course of the past six
months. Group members needed to draw on knowledge from their previous experiences as
well as lessons learnt from other modules in the MECB programme. The group members
believe that they have used the practicum as an opportunity to (1) improve a number of their
competencies and (2) apply the knowledge that they had gained throughout the MSc. in ECommerce course.
Project Management
Prior to conducting any research for the practicum, the team decided on a timeframe for the
project. For example, a decision was made to have all qualitative interviews completed by the
1st of July and all quantitative surveys were to be returned by the by 12th of July. This careful
planning allowed the group to ensure that sections of the project were completed by strict
deadlines and that ultimately the entire project was completed before the final submission
date.
Once this timeframe was established, the project stages were broken down into individual
tasks that needed to be completed. These tasks were then allocated to team members to
complete. Each team member was responsible for the work associated with the assigned task
and completed it by the deadlines established by the group at the beginning of the practicum
process. Each team member took part in a variety of different tasks and provided support to
when needed, to their fellow team members.
Group meetings were held twice a week to discuss any issues that team members were having
with their assigned task. These meetings also provided the team with the opportunity to
assign new tasks that were to be completed for the following week. This time management
and co-ordination of a number of tasks simultaneously allowed the group to complete the
required amount of work within the allotted time. For example, after conducting all of the
qualitative interviews, it was decided that two team members would analysis each of the
interviews whilst other members began preparation for other sections of the project such as
the industry and market analysis. Meetings with our assigned advisors, Dr. Yuhui Gao and
Dr. Claus Pahl, were also arranged at important junctures of our practicum journey in order to
168
seek their opinion on our level of progress. This careful project management allowed us to
compile an effective report within the set timeframe. The Prince2 Project Management
certificate which three of the group had successfully achieved earlier this year was a major
advantage in getting the team to design deadlines and to adhere to them.
Teamwork
The practicum module required massive team effort from all participant group members.
Successfully meeting deadlines and assigning tasks required effective communication
between group members and a number of decisions had to be made by the group regarding
any difficulties that were encountered. For example, as our selected target sample constituted
individuals who completed payroll for their company, the team needed to what was the best
means of conducting quantitative research. The team, after long discussions decided that
survey questionnaires were the only feasible method that could be used.
Dr. Gao suggested that the team could possibly use an online forum to gain payroll
administrators views. The team ultimately decided as a group, to distribute quantitative
surveys instead this would provide a much higher response rate from participants.
The group had worked together on previous projects throughout the year and this was a major
advantage. Each member knew the strengths and weaknesses of the other members and this
helped when delegating responsibilities and tasks to each other. Each group member‟s
opinion was valued and before making a group decision, each member was encouraged to
express their feelings towards the issue in question, so as to ensure that group decisions were
taken in a wholly fair & democratic manner.
Knowledge from Other Modules
The practicum process required all group members to put knowledge gained from other
modules into practice. The aim of the project was to establish a feasible business plan for a
start-up organisation. This required the application of knowledge and theory acquired from a
number of different modules.
As the team‟s proposed product is a web application that runs over the cloud, technologybased modules such as Networks and Internets, Information Access and Web Design &
Implementation were all extremely relevant in designing the CPS web application.
169
Experience gained from the Next Generation Management (NGM) module enabled the team
to assemble quantitative surveys appropriately as well as conduct qualitative interviews with
participating individuals. Furthermore, the NGM module also aided the group in establishing
a SEO and digital marketing strategy for the company. All group members had taken part in
the Google Online Marketing Challenge and had also conducted an SEO analysis for actual
clients and the lessons learned from these core tasks were invaluable in this practicum. The
Risk Management & Regulation in E-Commerce module had provided the team with a strong
base to construct a risk management strategy from based around minimising the impact of
any identified risks.
.
170
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179
Appendices
180
Appendix A: Ansoff Matrix
Adapted from (Tuto2u, 2011)
181
Appendix B: Brand Positioning Statement
182
Appendix C: From Software as a Product (SaaP) to Software as a Service
(SaaS).
183
Appendix D: Competitor List for CPS
184
185
Appendix E: Porter’s Five Forces for CPS
186
Appendix F: PESTLE Analysis for CPS
187
Appendix G: SWOT Analysis for CPS
188
Appendix H: The Value Chain for CPS
189
Appendix I: Financial Costs Appendices:
The following is the list of sources that CPS used to ascertain the costs in certain
areas of the finances.
Associated Costs:

Salary of Software Developer and IT Graduate:
o http://www.payscale.com/research/IE/Country=Ireland/Salary
o http://www.payscale.com/research/IE/Job=Office_Administrator/Salary

Office Supplies:
o http://www.pcworld.ie/Product/PACKARD-BELL-iMedia-D2525UKDesktop-PC-Black/304191/307

Cloud Application Used: Microsoft Azure:
o http://www.microsoft.com/windowsazure/offers/popup/popup.aspx?lang=
en&locale=en-US&offer=MS-AZR-0003P
o http://aws.amazon.com/ec2/pricing/

Acquired Loan Information:
o http://businessbanking.bankofireland.com/loans/small-business-loan
o Also the amount was determined by Business Loans Manager Jennifer,
bank of Ireland (Phibsboro).

Rent:
o Meeting with Ms Sue O‟ Neill 21st July @10am

Telephone
o http://business.eircom.net/broadband/products/landline/callpackages/1927
2549/

Corporate Tax Rate:
o http://www.idaireland.com/why-ireland/tax/

Website
o Registration for one year costs the company €39.93c for the domain name.
The website is hosted by weebly.com. There is also a €10.00c private
registration surcharge. The benefit of this surcharge is that it helps protect
the website against spam, fraud and identity theft by shielding personal
data.
190
Domain Name Registration
Privacy Surcharge
191
Appendix J: Sample Sales Script for CPS Employees/Directors
INTRO/PA
This script is the
framework for a call
aimed at obtaining a
free trial customer
Good Morning/Afternoon, my name is YYY from CPS. Please
could I speak to (name)?
If PA.
Good Morning/Afternoon (PA Name), my name is YYY from CPS:
please could you put me through to (Name)
Please review web
site and annual
report.
Tone is friendly and
confident
PA may ask for the purpose of the call.
Certainly. CPS is an innovative Irish software company with
specific expertise in providing payroll management expertise and
solutions for SME companies. We work with companies to
substantially increase payroll proficiency while reducing costs.
Emphasize Bold
Words
Companies such as XXX and YYY use CPS to achieve these
outcomes.
Talk slowly don‟t
rush
I would like to speak to (Name), to update him/her with the type of
results achieved by SME companies using our services, and to
explore how we might be of assistance to him/her.
Could you please put me through to (Name)?
192
What do you mean by that (substantially increasing proficiency
while reducing costs)?
We do this by offering a new, fast and easy to use payroll software.
We are the first to offer this particular type of payroll solution.
PA Objections
My Boss is not the best person to contact, contact IT
We have from experience that working exclusively with Company
Owners, who are ultimately responsible for increasing firm
productivity and overall company costs, is essential.
Is (name) available?
He is busy.
I understand completely, so when would be good time to call?
(NB. Suggest use this enquiry, in all cases, if he is not available now:
whether it is in 1 day or 6 weeks. If he is going to be away for a
while, politely enquire when he will be back and is likely to be able
to take the call, and then, without fail, call back at precisely that
time/date. May have to repeat this several times, before get through,
but that‟s OK: remain patient and cheerful.)
SME Owner Call
Good Morning /Afternoon how are you today (Name)
Emphasize Bold
Words
Talk slowly don‟t
rush
My name is XXX of CPS, Cloud Payroll Solutions.
Have you heard of CPS? (rhetorical don‟t wait for an answer)
If he/she does answer yes then Great, then you will know…….
193
If he/she does answer no then Well let me explain …….
We are one of the Ireland‟s fastest growing payroll solution
organisations. We work with owners of successful SMEs to rapidly
improve their payroll function and reduce costs, through
improvement to the payroll processes of our customers.
Our clients include companies such as: AAA,BBB, CCC,DDD etc.
The reason I‟m calling you, is because I would like to try our new
software. It is being offered as a free trial and we think you will
agree, it is an excellent service. Once you download, I would like to
call you to discuss your experience and to discuss how you can
continue using the software.
What exactly do you do?/how are you different, then?
We work with successful SMEs firms like your own to automate
their payroll function, and the associated internal business
processes, thereby improving proficiency and reducing costs. These
improvements are substantial: often reflecting savings of the order
of 20/30. The bottom-line impact of this is clearly quite profound.
Owner‟s Objections
Why do we need to use you – we have existing payroll software
Our system is extremely easy to use and we are also very
competitively priced at €99 plus Vat p/a.
We are the first Irish company to offer this service over the Internet,
so you can access the data from anywhere and you don‟t need to
purchase any hardware, nor endure any installation process.
We are doing fine at the moment
Most of our clients are successful companies like yours. However
they are generally successful because they are always looking for
better ways of doing things. CPS’s experience is that the best run
194
firms get the best results from our services, for this reason.
It is of interest but I am not the best person – call (IT person) and
tell him you spoke to me.
We have found from experience that working exclusively for
company owners, who are ultimately responsibility for staff
productivity and reducing operating costs is essential.
Given that you have expressed some interest, I would like to offer
you our free trial. Are you online at the moment? Just go to
www.cloudpayrollsolutions.net and click download. Its as simple as
that. I would like to give you a call in one months time to discuss
how we can sustain your cost savings. How this this day next month
sound, so the X of August?
Yes
Great speaking with you, and enjoy our software.
195
Appendix K: System Architecture
196
Appendix L: Example CPS Press Release
197
Appendix M: Search Engine Marketing for CPS
This section contains screenshots of various different platforms that Cloud Payroll Solutions
has used throughout the process. The anticipation is to increase the brand awareness of the
company along with having the correct tools in place to measure, analyse and increase the
performance online.
Search Engine Advertising/Optimisation
198
Google alerts is a service that will allows CPS monitor the Internet by entering certain
keyword terms. Alerts are then sent directly to the CPS Google powered email. Management
used this tool throughout this process, to better monitor where specific terms relating to the
company appeared across the web. See below:
199
200
201
202
www.cloudpayrollsolutions.net
203
204
205
206
207
208
209
210
Appendix N: Fingal Enterprise Meeting
211
Appendix O: Survey Cover Letter and Questionnaire
Dear Sir/Madam,
As part of my Masters in Electronic Commerce, I am conducting research into the area of
cloud computing in small to medium sized enterprises. I am investigating this because I am
researching the feasibility of a new internet-based, cloud computing based payroll system. I
am inviting you to be a part of my study because of your involvement with payroll in your
given organization.
If you accept, you will be asked to complete a questionnaire that is attached at the end of this
email. This questionnaire consists of 28 questions and will take you approximately 15
minutes to complete. I would like to stress that nobody will have access to the information
you provide in this survey except my four colleagues (listed at the bottom). The questionnaire
results will be stored under lock and key at Dublin City University. To ensure your
anonymity you will be referred to by job title and industry not by name during our study.
The questions are related to how you currently use your payroll system and your own
thoughts relating to the potential of a new payroll system. There is a risk that you may share
some personal information or that you may feel uncomfortable with some of the questions. If
there is a question that you would rather not answer, please feel free to move to the next
question. You are free to withdraw from the questionnaire at any time. We have the full
support of Dublin City University to engage in this research in a personal capacity. You do
not have to participate in this study if you do not wish to do so. Choosing to participate or not
will not affect your position in any way.
I would like to thank you for taking the time to read this letter. If you would like to know
more about my study before deciding whether to participate, please contact me at the email
address which you received this letter/survey from and I will contact you as soon as possible.
Regardless of whether you choose to participate, please let me know if you would like a
summary of my findings. To receive a summary, please send an email to:
[email protected]
212
Yours Faithfully,
Mark Allen, Dara Boland, Ian Campbell, Tommie O’Brien and Graham Tate.
Masters in Electronic Commerce
Dublin City University
Cloud Payroll Solutions Survey:
Your Job Title:
Date Completed:
Please complete the following questionnaire survey which consists of 28 questions. The
questionnaire should take approximately 15 minutes to complete. If you are completing and
returning this survey electronically via e-mail attachment, please indicate the most
appropriate response to each question.
This can be done by either:
 Circling the particular answer
 Highlighting the text of the answer
 Placing the answer text in bold

Thanks in advance for your participation in this study.
213
Section 1: Payroll in the Organisation
1. In what industry is your company operating in? (Please indicate)




Retail
Financial Services
Leisure & Entertainment
Other
If other, please specify
2. How many employees do you currently have on your company payroll?
Number:
3. Are all company employees paid: (Please indicate)




Weekly
Monthly
Some are paid weekly, some are paid monthly
Other
If other please specify
4. Do you currently use a payroll software package? (Please indicate)


Yes
No
5. Which of the following systems do you use? (Please indicate)






Sage
Quantum
Thesaurus
Intelligo
Big Red Book
Other
If ‘Other’ Please Specify
214
6. How often is this software used to process payroll (Please indicate)





Daily
Weekly
Fortnight
Monthly
Annually
7. How much does your payroll system cost annually? (Please state in Euros)
€
8. How many users have access to the payroll software in your company? (Please
indicate)
 1
 2
 3
 4
 5 or more
9. Do you use a hired accountant to process payroll on a period by period basis?
(Please indicate)


Yes
No
10. If yes, how often would you use this accountant to process your payroll? (Please
indicate)



Weekly
Monthly
Annually
or

Not Applicable
215
11. What is the annual cost of using an accountant to process your payroll? (Please
indicate)





< €250
€251 - 500
€501 - 1000
€1001 - 1500
> €1500
or

Not Applicable
12. Does your payroll providers include a customer service facility with your current
package? (Please indicate)


Yes
No
13. How would you rate your current software's customer service out of 5? (Please
indicate)





1 (Very Poor)
2 (Poor)
3 (Average/Adequate)
4 (Good)
5 (Very Good)
14. How much does your ‘customer service’ costs amount to annually? (Please
indicate)






Less than €50
€50 - €100
€101 - €150
€151 - €200
€201 - €250
Over €250
or
216

Not Applicable (No extra customer services costs, included in the price of the
software )
15. Annually, on average how many times do you need to contact customer service?
(Please indicate)






Never
1 -5
6 -10
11 -15
16 -20
Over 20 times
16. Do you believe this service could be improved? (Please indicate)



Yes
No
Not Applicable
If ‘Yes’, briefly how do you believe this service could be improved?
Section 2: Potential Payroll Software & Cloud Computing
17. Would you be willing to switch from your current payroll software provider?
(Please indicate)



Yes
No
Maybe
Briefly, please explain the reason for your response?
___________________________________________________________________
__ _______
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18. If you would be willing to switch from your current provider, which of the following
would you consider to be the single most important feature of a new payroll
package?
(Please indicate)






Significant annual cost savings
A more simplified, user-friendly package
Improved customer service
A payroll system that could be accessed by you from outside the company
premises
Not Applicable
Other,
If other, please specify
19. Are you familiar with the concept of ‘cloud computing’? (Please indicate)
 Yes
 No
20. Would you feel comfortable using a new payroll system that operated over the
Internet? (Please indicate)
 Yes
 No
 Maybe
21. If yes/maybe to q 19, how much approximately how much would you be willing
to pay for a new payroll service that could be accessed over the Internet? (Please
indicate)

€________
or

Not Applicable
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22. How reliable do you perceive Internet security to be today? (Please indicate)





Very reliable and secure
Fairly reliable
Undecided
Somewhat unreliable
Wholly unreliable and open to attacks
23. Do you use any of the following online services? (Indicate all that are
applicable)
 Staffbalance
 HR Locker
 Salesforce.com
or
 I use none of these online services
24. Do you use a public e-mail provided by any of the following companies?
(Please indicate)





Google - Gmail
Microsoft - Hotmail
Yahoo - Ymail
Linux - Linuxwaves
Other
If other, please specify
Section 3: Smart Phone and Remote Access
25. What phone do you use? (Please indicate)
 Apple
 Android
 Symbian (Nokia Smart Phone)
 RIM Blackberry
 Other Smart Phone
or
 Non Internet Based Phone
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26. Do you use your phone to complete any payroll tasks? (Please indicate)
 Yes
 No
27. Do you use Phone Apps for any aspect of business management? (Please
indicate)
 Yes
 No
If Yes, please specify the apps that you use?
___________________________________________________________
28. If a smart phone application was developed to allow remote access to payroll
information, do you believe you would adopt this feature? (Please indicate)
 Yes
 No
 Undecided
End of Questionnaire. Thank you for your participation
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Appendix P– Cloud Payroll Solutions Poster
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