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© Pradeep Kumar Ramiya Mothilal 2012 - No copying without permission

Ace Inc.

Coin Card Every Penny Counts...

Vivek Singh Niranjan | Rasheed Ahmad | Azamain Yusof

Chao Yu-Shu (Bianca) | Pradeep Kumar Ramiya Mothilal

Coin Card 2012

Page | 2 © Pradeep Kumar Ramiya Mothilal 2012 - No copying without permission

Table of Contents 1. Executive Summary ......................................................................................................................... 4

1.1 Business Overview .................................................................................................................... 5

2. Organization Structure .................................................................................................................... 6

2.1 Business Strategy ...................................................................................................................... 6

3. Marketing........................................................................................................................................... 8

3.1 Ace Inc’s Mission: ...................................................................................................................... 8

3.2 Ace Inc’s Vision: ......................................................................................................................... 8

3.3 Market Research ....................................................................................................................... 8

3.3.1 Primary Research ............................................................................................................... 8

3.3.2 Secondary Research ......................................................................................................... 8

3.4 SWOT Analysis .......................................................................................................................... 9

3.5 5P’s of Marketing ....................................................................................................................... 9

3.5.1 Product ................................................................................................................................. 9

3.5.2 People .................................................................................................................................. 9

3.5.3 Promotions ........................................................................................................................ 10

3.5.4 Price ................................................................................................................................... 10

3.5.5 Place................................................................................................................................... 11

3.6 Marketing Plan ......................................................................................................................... 11

3.6.1 Building awareness and Understanding ....................................................................... 12

3.7 Advertisements ........................................................................................................................... 12

4. Operations: ..................................................................................................................................... 13

4.1 Operational Snapshot ............................................................................................................. 13

4.2 Supply Network Design .......................................................................................................... 13

4.3 Departments ............................................................................................................................. 14

4.4 Support Infrastructure ............................................................................................................. 14

4.4.1 Office Space: ........................................................................................................................ 14

4.4.2 Server and database: ........................................................................................................... 14

4.5 Products: ..................................................................................................................................... 15

4.5.1 RF Card Reader: .............................................................................................................. 15

4.5.2 Smart Card: ....................................................................................................................... 15

4.6 Quality Control and Performance Improvements: .............................................................. 15

5. Financials ........................................................................................................................................ 16

5.1 Funding ..................................................................................................................................... 16

Coin Card 2012


5.2 Sales .......................................................................................................................................... 16

5.3 Purchases ................................................................................................................................. 17

5.4 Value Added Services ............................................................................................................. 17

5.5. Revenue Generations ............................................................................................................ 17

5.5.1 Advertisement on Card .................................................................................................... 17

5.5.2 Advertisement on Website .............................................................................................. 17

5.6 Cash flow forecast ................................................................................................................... 18

5.7 Sales Forecast ......................................................................................................................... 19

5.8 Break Even Analysis ............................................................................................................... 20

6. Expansion Plan .............................................................................................................................. 21

7. Appendix ......................................................................................................................................... 22

Coin Card 2012


1. Executive Summary

Ace Inc.’s Coin Card service is a prominent contactless smart card application

payment service provided to students for managing low-priced transactions

efficiently. Moreover, the Coin Card service provides convenience and safety for

each and every penny transacted with attractive discounts from various businesses

that are high valued and utilized. The businesses which tie up with the Coin Card

service end up promoting their offers on products to potential customers and

increase their revenues. Thus the Coin Card service serves as a bridge between the

business and customers to increase transactions. Increase in transactions will result

in increase of revenues for the Coin Card services.

The Coin Card services will begin its operations from January 1st, 2013 by

reaching the university students with Coin Cards. The Coin Card once activated and

registered for a negligible cost will serve its customers providing information on

offers available in the nearby businesses. The Coin Card can be topped up using

Coin Card Web Services. The students can coin the Coin Card in the Card Readers

installed at multiple locations (Cafe, Vending Machine, Photocopiers etc).

The marketing and research strategy of Coin Card service aims to seek

businesses that offer discounts and offers to potential customers who are using Coin

Card. The discounts offered to the Coin Card Customers will generate revenues in

terms of advertising costs. The research information will give an insight on the

expansion strategy. The analysis of competitors reveals that although there are

many similar services available across the globe, none of the smart card services

predominantly target the student population by providing the university related

services at negligible cost. There is a tremendous market for the Coin Card service

as the survey conducted with university students revealed that 84% of the students

will opt for the Coin Card.

The infrastructure facilities for the Coin Card Web services will be located in

the United Kingdom for information accessibility, while the software related web and

security services will be outsourced to India to avail the quality deliverables at an

affordable cost.

The Coin Card service is estimated to break even in 8 months from its

initiation despite the cost of operations to provide superior services to customer. Led

by a high qualified team from Ace Inc., the Coin Card service will exceed customer

expectations during its operation and thus achieve its vision in the nearby future.

Coin Card 2012


1.1 Business Overview

Coins have been linked to the concept of money 2500 years ago when they

originated in Anatolia and since then they have been part of our everyday’s life. The

circulated coins, considered to be the building blocks to value wealth and to trade,

gave rise to the transaction era.

Today, despite the advent of internet and technology to perform transactions,

millions of in-expensive transactions take places every day using coins. Each and

every individual spends substantial periods in his life time, valuing his wealth in

terms of coins as well as doing in-expensive transactions using coins, whereas there

are many means to do the same efficiently. One of the approaches could have been

to eradicate coins from circulation, however given that there are more than 41600

unique coins in the world; it is easier said than done. Rather than getting rid of coins,

the value of the coins can be transferred in an electronic card and can be used to do

in-expensive transactions efficiently and hence make every penny count. Ace Inc

makes this very thing possible for everyone.

The Coin Card service, provided by Ace Inc., is one of most prominent service

that has been inspired from the leading contactless smart card application payment

services which serves specific classes of people across the world. To start off, unlike

other electronic payment services, the Coin Card service has been shaped to best

suit the requirements of students for performing in-expensive transactions so that it

becomes an integral part of their life. Irrespective of the value involved, may be as

small as taking a photocopy which takes approximately 3.5 penny, the transactions

can happens in an efficient way valuing each and every penny. Besides efficiency,

the Coin Card service offers convenience and safety to manage coins for all kinds of

transactions.

The Ace Inc, provides this invaluable service to customers using the Coin

Cards and the Coin Card Readers installed at multiple locations in the university

campus. In addition to making transactions efficient, Ace Inc. provides value added

service to all its customers by offering them information on discounts and offers. In

turn this results in the promotion of businesses which ties up with Ace Inc for

advertisements. The expansion plan will be solely based on the marketing and

research information from reaching out for more businesses who wish to collaborate

and endorse their products. Thus, Ace Inc Coin Card service creates a win-win

situation for all its customers who serve each other by valuing transactions.

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2. Organization Structure

See Appendix A for the executive profile of the Ace Inc’s leadership team.

2.1 Business Strategy

Ace Inc. has a business strategy for short term and long term business continuity. The short term strategy underlines the objectives to help the business grow and occupy market share in initial phase of the release. The long term strategic business objectives provide a platform to maintain a competitive advantage in a technologically advancing and evolving market through innovativeness and value addition. The short term business objectives are summarized below:

To expand the business in the targeted segment across major Universities in U.K.

To break even in the first year by aggressively promoting and selling the product and associated value added services to its customers.

Rasheed Ahmad (MD & CEO)

Pradeep Kumar Ramiya Mothilal(CIO)

Web Maintenace

Database Management

Security

Quality Control

Yu-Shu (Bianca) Chao (Head Maketing &

Branding)

Promotions

Branding

Marketing

Sales

Vivek S Niranjan (COO)

Sales & Customer Service

Purchase

Human Resource

Procurement

Maintenance and operational support

Azamain Yusof (CFO)

Accounts Recievable

Accounts Payable

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To aggressively promote and install Ace Inc. payment system (card reader) at amenities which are used by students like vending machines, takeaways, taxi services, book stores, small grocery stores etc.

The long term business objectives are summarized below:

To innovate and research in the area of cashless payments and provide facilities to integrate the Coin Card chip in smart phones.

To expand the business aggressively and provide high returns to shareholders.

To become market leader in providing cashless payment facility for day-to-day transactions to international and home students.

Coin Card 2012


3. Marketing

3.1 Ace Inc’s Mission:

To provide the university students worldwide, an easy, efficient, in-expensive, convenient and safe means to do low-priced payments with attractive promotions that are highly valued and utilized

3.2 Ace Inc’s Vision:

Imagine a world without coins which have been replaced by innovative and cutting edge technology solutions for its ingenious usage across the oceans. We are Ace.

3.3 Market Research

This part of the plan aims to examine the potential coin card users by primary and secondary research and identify the strengths and weaknesses through a SWOT analysis.

3.3.1 Primary Research

Sample: 88 college student (including postgraduate and undergraduate)

A summary of key trends are as follows:

The survey shows a highly willingness (84%) to substitute coin with card and a highly preference (82%) of discount and promotion with using card. Details of primary research is available in Appendix B

3.3.2 Secondary Research

See Appendix C for the Secondary Research done for the Coin Card Service.

Yes 84%

No 16%

Willingness to substitute coin with card

Yes 82%

No 18%

Preference of discount and promotion with

using card

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3.4 SWOT Analysis

Ace Inc. team will address all the weakness covered in the analysis and will work to convert them to company’s strength. Our R & D department will develop a robust program to provide high end security to the users.

3.5 5P’s of Marketing

3.5.1 Product

- Coin Card 1. Product Name: Coin Card 2. Ace Inc. Tag Line: “Every penny counts” 3. Product / Service Description: Customer can use this card in every store,

café, vending machine in the campus by only swiping your card in front of the card reader and also enjoy the discounts offered on nearby stores, including pubs, taxi, restaurants, book stores and clothing stores.

- Card Reader Product Name: Coin Card Reader

3.5.2 People

Ace Inc Target customers for the smart card services are university students (international & domestic students) who have limited amounts of money and have to manage their expenses in a fixed amount. Ace Inc. provides an integrated system which keeps track of their money and also provides ease of making day-to-day transactions. The parents of students could also be a potential target customer, as the card can be topped up by them for pocket money expenditures, and thus ensures parents that their children don’t spend cash wastefully.

Coin Card 2012


Figure: Market Segmentation analysis

The vendors who install Ace Inc.’s card reader in their Vending Machines present at the outlets will be the target customer for Card Reader market.

3.5.3 Promotions

Ace Inc. will use number of promotion techniques to retain the interest of customer as well as vendors on usage of Coin Card and its services. It will ensure that value added solutions are provided to the customers. Free Distribution of Coin Card - Ace Inc. will distribute Coin Card to the target market for free. After coordination with the University, the cards would be included in the welcome pack/arrival pack of new students. Discounts – Vendors associated with coin cards will provide discounts to the customers which in turn will benefit the vendors by getting large volume of customer. These discounts shall be available on the company website and would be subject to weekly changes. Refer Appendix J.

3.5.4 Price

The following parameters have been taken into consideration for the pricing of the cards:

1. Suitability to national and international students 2. Usage of the card. 3. Best rates compared to the competitors

Card Fees:

Cost to open account (Handling and Admin Expense)

£ 2

Cost to Customize Card (Name Imprint/Own Picture)

£ 2.5

Use of Card at Point of Sales (POS) Free

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Recharging Coin Card account:

Direct Deposit (Company reload N/W location)

Free

Direct Debit £ 1.5

Online Top-Up through website portal Free

Manage your Account:

Web Portal Free

Lost or Stolen card replacement £ 2

Maintenance (Name or mobile number change)

Free

Statement (on request) £ 5

3.5.5 Place

Ace Inc. is going to target universities cafe, vending and coffee machines, other student utility services (like taxi, stationery stores, nearby grocery outlets etc.) for the card reader, and national and international students for the smart cards. Customers can order coin card though our website, buy from retail outlets and/or grocery stores, or collect from hand to hand distribution. Refer Appendix D.

3.6 Marketing Plan

The following diagram illustrates the marketing plan and strategy for the Ace Inc. coin card.

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3.6.1 Building awareness and Understanding

Coin card being completely new and unique product, Ace Inc. will initially create awareness and understanding of the coin card among the potential and targeted customers using various forms of marketing communication such as advertising, transactional agents, field agents and friends and family.

3.7 Advertisements

See Appendix E for how the Coin Card Services has been advertised.

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4. Operations:

4.1 Operational Snapshot

Ace Inc. provides the next generation technology of smartcard cashless payment

system. It is a unique card payment system that aims to eradicate the use of coins

for small payments at places like vending machines, public toilets, coffee terminals,

take away counters, taxis, buses etc. It replaces bulky coins in the wallet with a card

that can be used to pay the exact change anytime and every time.

Given below is a block diagram indicating the steps involved in a transaction made

by Coin Card:

The card can be easily recharged (Top-Up) either online, or through recharge cards

available at local grocery shops and retail stores or by direct debit. The upper limit of

the balance that can be held in the card is 50 Pounds, i.e. a user can top-up his/her

card from 1 Pound to 50 Pounds. Money is transferred from user’s bank account to

the company bank account and the balance information is saved in company’s

database against the user.

4.2 Supply Network Design

Ace Inc. has a business model that would enable it to cut costs and hence provide

greater value added services to its customers. The supply network structure is made

Coin Card 2012


to best utilise the capabilities of the firm and sets boundaries for vertical integration.

An indicative supply network diagram is given below to illustrate the operations of

Ace Inc.:

4.3 Departments

See Appendix F for various departments for operating Coin Card Services.

4.4 Support Infrastructure

4.4.1 Office Space:

See Appendix G for proposed office.

4.4.2 Server and database:

See Appendix H for the Server and database details.

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4.5 Products:

4.5.1 RF Card Reader:

Specifications:

Place of Origin: Guangdong, China (Mainland)

Brand Name: Mingwah Model Number: RF-30

RFID card writer: 13.56MHZ Mifare reader Work frequency: 13.56MHZ Type of Read/Write: Mifare S50

4.5.2 Smart Card:

Coin Card has a smart chip embedded in it. The specifications of the chip are: Sony 13.56 MHz FeliCa radio frequency identification (RFID) chip.

4.6 Quality Control and Performance Improvements:

See Appendix I

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5. Financials

5.1 Funding

The business start up cost of £ 28,000.00 is the capital, which is jointly funded

through £ 13,000.00 equity with each of the directors contributing £ 2,600.00 and

£ 15,000.00 loan from bank. The Long Term Loan will be repaid over 4 years with

the interest rate of 7%.

5.2 Sales

Ace Inc’s research survey has identified that over 84% of the students are interested

in replacing the coins that tend to make wallets heavy, with card. Our sales

forecasting is mainly on the number of students in Leeds, which is approximately

35,000.

Month-1, we start to advertise and market our product to the students. Below are the

forecast of sales from Month-2 to Month-12.

Through our marketing efforts (for Months-8) we manage to capture the market by

33,561 students approximate to 95% out of 35,000.00 students’ population. Refer

Appendix I.

Ace Inc also plans to sell card reader for £25 each from year 2 onwards.

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5.3 Purchases

The total purchases for year 1 amount to £ 4,500. For detailed breakup of the

purchases and other expenses refer appendix L.

5.4 Value Added Services

Ace Ice will provide many free value added service and will charge for very few services such as charges for printing account statement.

5.5. Revenue Generations

5.5.1 Advertisement on Card

The company will focus on getting extra revenue by printing vendor’s advertisement on coin card. As a promotional strategy the company will give free advertisements space on the card for first year. From second year the company is proposing to earn £ 5000 for one year.

5.5.2 Advertisement on Website

The company will rent out space on its website for businesses to advertise their offers, thereby promoting their deals and products and would also in turn generate revenue.

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5.6 Cash flow forecast

Cash Flow Forecasts for Five years

Month: Year One Year Two Year Three Year Four Year Five Totals

Receipts

Collections from credit sales 146,361 175,633 210,760 252,912 303,494 £ 1,089,161

New equity inflow 13,000 £ 13,000

Loans received 15,000 £ 15,000

Other 0

Total Receipts £ 174,361 £ 175,633 £ 210,760 £ 252,912 £ 303,494 £ 1,117,161

Payments

Purchases 9,000 10,800 12,960 15,552 18,662 66,974

Payments to creditors 0 0

Salaries and wages 103,200 118,680 136,482 156,954 180,497 695,814

Employee benefits 0 0

Payroll taxes 0 0

Rent 3,840 3,840 3,840 3,840 3,840 19,200

Utilities 1,200 1,200 1,200 1,200 1,200 6,000

Repairs and maintenance 1,000 1,000 1,000 1,000 1,000 5,000

Insurance 2,400 2,400 2,400 2,400 2,400 12,000

Travel 2,000 2,200 2,420 2,662 2,928 12,210

Telephone 1,520 1,520 1,520 1,520 1,520 7,600

Postage 0 0

Office supplies 2,300 2,000 2,000 2,000 2,000 10,300

Advertising 1,600 1,600 1,600 1,600 1,600 8,000

Marketing/promotion 3,600 3,600 3,600 3,600 3,600 18,000

Professional fees 0 0

Training and development 5,000 5,000 5,000 5,000 5,000 25,000

IT-Server 1,000 1,000

IT-Database 200 200

IT-Infrastructure 3,000 3,000

Loan repayments 4,800 4,800 4,800 4,800 0 19,200

Tax payments-Corp 0 249 2,641 130 4,141 7,161

Capital purchases 0 0

Other 1,948 1,948 1,948 1,948 1,948 9,740

Total Payments £ 147,608 £ 160,837 £ 183,411 £ 204,206 £ 230,337 £ 926,400

Cashflow Surplus/Deficit (-) £ 26,753 £ 14,796 £ 27,349 £ 48,706 £ 73,158 £ 190,762

Opening Cash Balance £ 26,753 £ 41,549 £ 68,898 £ 117,604 £ 254,805

Closing Cash Balance £ 41,549 £ 68,898 £ 117,604 £ 190,762 £ 418,813

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5.7 Sales Forecast

The Ace Inc forecast the Sales and Purchases will be increase by 20% yearly due to

expansion to various Universities and High schools.

From the forecast for 5 years, the chart shows that the company will generate

potential revenue in the long-run.

As far as the total Profit/Loss is concerned, our company starts with a negative cash

of -£1,247.00 for Year 1 and would then slowly increase to a profit of £ 73,158.00 in

Year 5.

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Year 1 Year 2 Year 3 Year 4 Year 5

Am

ou

nt

5 years Forecasts

Total Sales Total Cost

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5.8 Break Even Analysis

Based on the break-even analysis chart given below, Ace Inc. can break-even at the

end of Month-7. Before that, our Total of Sales are below the Total Cost (i.e. revenue

is negative) since theTotal Costs are more in the beginning, until Month-8 after which

revenue generated becomes greater than the cost.

-

5,000

10,000

15,000

20,000

25,000

30,000

1 2 3 4 5 6 7 8 9 10 11 12

Am

ou

nt

£

Month

Break-Even Analysis

Total Sales Total Cost

Break-Even

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6. Expansion Plan

Coin Card service will keep up with the growth of technology by embedding the technology into mobile phones.

Coin Card service has been projected to expand to reach customers in all the universities located in United Kingdom and Europe.

Coin Card service will expand its operations to provide services outside the universities.

Coin Card service plans to introduce Penny Card for school children.

Coin Card service will enhance security features in its operations and web services.

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7. Appendix

Appendix Title

Appendix A – Executive Profiles Appendix B – Market Research Questionnaire Appendix C – Secondary Research Appendix D – Website Appendix E – Advertisements Appendix F – Departments Appendix G – Office Space Appendix H – Server and Database details Appendix I – Quality Control and Performance Improvements Appendix J – 12 Month Cash Flow Appendix K – Flyer printing quotation Appendix L – Detailed Financial Assumptions

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Appendix A – Executive Profiles Rasheed Ahmad – MD & CEO

Rasheed has worked for number of top IT and consultancy firms and has a rich experience of handling a project team at large scale. He has worked for companies like Deloitte & Touché, Infosys Limited. With the proven leadership and managerial skills, Rasheed as a MD and CEO will have overall responsibilities of Ace Inc. Pradeep Kumar Ramiya Mothilal– Chief Information Officer (CIO) With his strategic leadership capabilities, Pradeep Kumar is the CIO of the Ace Inc. Being a Six Sigma Green Belt, he has over 5 year experience in IT industry and have handled several globally acclaimed projects. Pradeep will take lead role in all the technical aspect of the Ace Inc including designing and implementation of quality product and services. Vivek Singh Niranjan – Chief Operations Officer (COO) After graduating as an engineer, Vivek worked for a newly established company with a vision of creating sustainable energy. In past he has successfully implemented and handled the company’s operational activities across the field. As a COO of Ace Inc, Vivek is going to improve company’s inventory and the working capital and will be directly responsible for the company’s strategic planning and its implementation. He will also take care of the post sale activities of the company. Chao Yu-Shu (Bianca) – Head Marketing & Sales

After graduating from Ming Chuan University-Taiwan and worked for one of

the biggest food company in Taiwan with clients such as McDonald and KFC as a

marketing group leader. Chao has in-depth experience in the groom and launch of

both brand and product. As Head of Marketing, Chao will contribute on developing

the marketing strategy, focus on market need for Ace Inc.

Azamain Yusof – Chief Financial Officer (CFO) Finance is the back bone for any company. As CFO of Ace Inc, Azamain will not only focus on the strategic finance decision, cash forecasting and budgeting but will also monitor and implement all these activities. Azamain has a strong work experience in Banking Sector and is well adapt with banking rules and regulations.

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Appendix B – Market Research Questionnaire

1 How much change in terms of coins you carry daily? (All values given below are in Pounds)

A- None (5)

B- 0-0.99 (2)

C- 1-1.99 (11)

D- 2-2.99 (20)

E- 3-5 (37)

F- more than 5 (13)

2 Does carrying coins bother you (do you feel uncomfortable)?

A- Yes (49)

B- No (39)

3 Have you run out of coins when you were in need of them?

A- Yes (71)

B- No (17)

4 Do you spend time in counting coins for a small payment?

A- Yes (62)

B- No (26)

5 How much time do you spend on counting coins or change returned at the cash counter?

A- Less than a minute (71)

B- 1-2 minutes (15)

C- More than 2 minutes (2)

6 In a “week”, how much time do you spend waiting on a “pay-here” queue (any queue which accepts payments for product purchases or services received)?

A- Less than 5 minutes (30)

B- 5 to 10 minutes (28)

C- 10 to 20 minutes (22)

D- 20 to 30 minutes (5)

E- More than 30 minutes (3)

7 On a scale of 1 to 5, (1 being least likely and 5 being most likely) will you wait behind a queue of 10 or more people to buy a product when substitutions (alternatives) are available?

A- 1 (least likely) (41)

B- 2 (24)

C- 3 (19)

D- 4 (1)

E- 5 (most likely) (3)

8 Would you like to have the coins replaced by a card which has each and every penny?

A- Yes (74)

B- No (14)

9 Will you be interested to get promotions or discounts from the vendor when you use the “coin card”?

A- Yes (72)

B- No (16)

10 Two vendors are selling equivalent products or providing equivalent services. Will you choose a vendor giving promotions or discounts over one who doesn't?

A- Yes (82)

B- No (6)

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Appendix C – Secondary Research Background According to UK Card Association, in September 2012 almost 831 million transactions were done using credit card or debit card amounting to total of £40.8 billion. As at September 2012, the total money spent using plastic money has averaged £41.5 billion for the year 2012, which is more than the average compared to last year. Looking at the current situation of economy, where customers are in need of a trade-off between convenience and budgeting. Competitor Analysis

Existing plastic money providers are our competitors. With the expansion in mind Ace Inc. coin card looks debit cards and credit cards as the biggest competitor. In smaller segment where Ace Inc. will target its coin card will have other competitors such as Refresh Card, Bristol Pound and Oyster Card. After a detailed analysis, we identified out main competitors below:

Comparing credit cards/ Debit cards in the market, with coin card, the users do not have to worry about the due date payment, the penalty charges and the interest charges. Being a prepaid cash card it will also help reduce the debt and strengthen the economy. Moreover, using bank services without over-expenditure and involvement to banks will be the unique feature offered by Ace Inc. coin cards.

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Appendix D – Website

Home Page Coin Card Service

Promotions Page - Business Advertisement

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Topup Page

Account Statement Page

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Appendix E – Advertisements The advertisement will help Ace Inc. create awareness and understand Coin Card among potential and targeted customers. Ace Inc. will focus on two following forms of advertisement. The company will advertise in all four corners of the universities Union Website – University union website is one such place on internet where students visit often. The inquired rate for advertising on the homepage of the website is £ 900 for six month. Poster Site – Ace Inc. will also hire the available poster sites available at various corners of the university and the rate for the poster site is £ 900 per 6 month. Face to Face – Ace inc. will distribute flyers and hire students to advertise the Coin Cards to the other students of the university. Appendix D shows the price quotation for flyer printing.

Ace Inc. has a proposed budget of £ 5200 for first year of operation. Simultaneously with advertisement Ace Inc. will also create strong understanding of the product among the targeted customers. Other marketing Cost

Educating and Activating Customers Ace Inc. will here use more personal approach; as such company will leverage transactional agents, field agents, current users and friends and family to guide potential customers from awareness to use.

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Appendix F – Departments The Key departments of the firm are:

Procurement Department: Ace Inc. will have a procurement team which will

perform the task of purchasing the card readers, smartcards from suppliers in China

and other material. The diagram below indicates the location of key operations of

Ace Inc.

Sales/Marketing Department: The sales and marketing team would be responsible

for sales and distribution of the card reader and smart cards to potential customers

and to promote the value added services offered by the firm.

Security Management Department: Ace Inc. will strive to ensure high standard of

security is maintained to prevent hackers from getting into system and to provide

ethical services to customers.

R&D and Innovation Department: The R&D team shall constantly research and

come up with latest advancements in the cashless transactions system. The future

strategy for R&D team is to realise the incorporation of smart card chips into mobile

phones to launch the next level of payment methodology.

Quality Control Department: The Quality control team shall constantly perform an overall quality audit of the company to ensure best operational practises are followed in the operations.

Outsourcing

- IT Support and web development

- Stationery and other day-to-day necessaties

Offshore outsourcing

- Purchase Card Reader and smart cards from China

- Customer Service Support in India (Expansion Strategy)

Domestic Operations

- Customer Service operations during initial stages

- Technical Support

- Design, R&D and Innovation

- Quality Control

- Sales and Procurement operations

Offshore operations

(None)

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Appendix G - Office Space

Highs and description:

South Parade in Leeds City Centre

A 1930's art deco building

Extensive refurbishment

High quality office accommodation.

Each floor is approximately 5000 sq. ft. in size

Excellent views of the City Centre Cost for rent: £82pw

References: http://www.gumtree.com/p/flats-houses/office-space-to-rent-south-parade-ls1/113046841#gallery-item-full-1

http://www.gumtree.com/p/flats-houses/office-space-to-rent-south-parade-ls1/113046841#gallery-item-full-1

http://www.gumtree.com/p/flats-houses/office-space-to-rent-south-parade-ls1/113046841#gallery-item-full-1

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Appendix H – Server and Database details

IBM Server: IBM System x3500 M4 Express

Specifications:

Intel® Xeon® E5 -2603 1.8GHz 10M 4C

4GB (1 x 4GB RDIMM)

Open BAY FOR 3.5" Hot Swap SAS/SATA HDD (8)

M1115 disk controller

750 Watt power supply

Database: Oracle 11g Enterprise Edition Database for holding customer records and

transactional history. See Appendix for further details.

Coin Card 2012


Appendix I – Quality Control and Performance Improvements

Ace Inc. seeks to deliver value in its products and associated services for its short term and long term sustainability in the market. The organization takes the Balance Score card approach given below to get the overall picture of the quality aspects that need to be implemented.

The Ace Inc.’s Coin Card service targets a small segment of market to start with which involves limited production and services even though it has the potential to seep into other market segments and expand. However, foreseeing the growth of technology in the future, the Coin Card service will inevitably become a service that involves mass production. Hence, for Quality Control and Performance improvements, the Coin Card service will tend to align Total Quality Management (TQM) and Six Sigma right from the outset. The Ace Inc. craves to make continuous improvements throughout its life cycle of existence in order to meet the growing expectation of the customer and avoid radical changes to its operations. As the improvement in operation performance stems from the improvement in operations capabilities, the Ace Inc. will use the following: • Total Quality Management for continuously improving the tangible aspects of its service such as Operations, Customer Relationship Management to deliver quality to customers • Six Sigma for intangible services such as Transaction processing, network management primarily to eliminate flaws and improve performance Quality Management of tangible services:

Quality Management of tangible services is aligned to the Element Approach of the Total Quality Management which takes key process and units into consideration and uses the tools of Total Quality Management to foster improvements. Ace Inc. plans to bring about quality in the Coin Card Service by performing the following:

Coin Card 2012


Customer Focused: As the Coin Card Service revenues depends upon meeting customer expectations, Ace Inc. shall phase out the quality improvements such as upgrading Coin Card Readers or Coin Cards, training employees depending upon whether the efforts were worthwhile for the customer by seeking regular feedbacks. Involving all hands: Ace Inc. shall involve all the employees to work towards common goals and hence improve commitment. Proper environment will be provided by the Management team to integrate continuous improvement efforts with normal business operations. Process centric: The process involved from procuring the Coin Card and Readers from the suppliers to delivering the Coin Card Service to the customers will be broken down into unique process with performance measures to monitor unexpected variation. Integrate Systems: The Ace Inc. will integrate the horizontal processes of the vertically structured departments such as marketing and operations so as to connects business improvement elements to exceed expectations of customers, employees and other stakeholders. Strategic and systematic approach: To achieve the organization’s vision, mission and goals with quality, Ace Inc. will follow a strategic and systematic approach. Continuous Improvement: Small improvements in terms of being analytical and creative, will be made wherever applicable, to become more competitive for meeting stakeholder expectations. Decision Making: The decisions made by Ace Inc. on Coin Card service will be fact based which has been collected over a period of time to improve accuracy on decision making and to achieve consensus. Communication: As Total Quality Management involves the organizational improvements effective communications plays a major role in Ace Inc. for motivating employees at all levels and maintaining the morale.

Process Activities Inputs Outputs Customer Document

ation

Criteria

Sales of Coin

Card Services

and

advertisements

Provide

Specification

Answer

Customer

inquiries

Coin

vending

machines

literature

Customer

purchases

Coin Cards

or Readers

Vendors

People

who use

Coin Cards

Registration

Details

Revenue

Growth

Net income

growth

Scheduling for

installation of

Coin Card

Combine jobs

in order to

maximize

Coin

Vending

Machine

Successful

installation

University

services

Installation

report

Percentage

on time

installation

Coin Card 2012


Services efficiency location

Purchasing of

Coin Card

Services

Qualify

suppliers

Monitor

Supplier

performance

Feedback

from

customer

s who

use Coin

Card

Services

Purchased

Services

Vendors

People

who use

Coin Cards

Service

Feedback

Percentage

delivery of

service

Shipping Packaging

products

Monitoring

shipments

Shipping

supplies

No damage Vendors

People

who use

Coin Cards

Shipment

Feedback

Percentage

delivery on

time

Transaction

Processing

Getting the

information

Information

Update

Amount

and card

number

Transaction

successful

Customers

who use

the Coin

Card

Transaction

statements

Accuracy

Time taken

for

Transaction

Termination of

Service

Termination

request

Verifying the

request

Card

number

and

customer

mobile

number

Coin Card

Service

termination

successful

Customers

who have

stopped

using the

Coin Card

Service

Termination

Reference

number

Percentage

of successful

Termination

of Service

Replacement

of Coin Card

Request for

replacement

Replacement

of Coin Card

Card

number

and

customer

mobile

number

Shipping

address

Successful

replacement

of Coin

Card

Customer

who has

lost the

card

Replaceme

nt Service

Reference

number

Percentage

of successful

Coin Card

replacements

Quality Management of intangible services:

Ace Inc. uses Six Sigma to focus on Quality Management of intangible services resulting in elimination of defects in the System. The Coin Card Service stands apart from other competitors in terms of delivering reliable service at high performance level. By implementing Six Sigma in the Transaction processes, Coin

Coin Card 2012


Card saves 54 minutes of transaction time every year for hundred concurrent transactions happening concurrently across the market. The time savings can be translated into system performance cost. Ace Inc. believes that the savings will improve exponentially as the Coin Card Service expands across all the markets and thus prove to be remarkable in value to all the stake holders of Ace Inc.

DMAIC Methodology: Transaction Process Improvement

Define TPM-Graphical L1, Graphical L2

Results in trivial and non trivial thoughts Provides the approach towards solving a problem

Brain storming results

about the Transaction

process improvement

Measure Process Map- HL,LL C&E matrix

Depicts inputs and outputs of the process and its flow. Provides the required trivial and non trivial inputs and all outputs.

Represents the variations Determines the priority

Analyze Process FMEA Identify failure/potential risks. Severity of each risks

Prevention of failure

Improve RCA Determines the root cause. Eliminates repeated occurrences of the same problem.

The problem description

Control Control Plan The description of the actions that need to be taken. The person to take the action

Sustain the project gains.

Analyze Improve Control Measure Define

Coin Card 2012


Results:

CTQs as

identified

in the

Charter

Metrics\

Measures

Baseline

Value

Improvement

after DFSS

deployment

Time

Savings

Projected

for next 6

months

Remarks

Transaction

Processing

time

Time taken

for 100

Transaction

s

10seconds

1second

27

minutes

Assume 100

Transactions

happened

per day

Cost Saving Calculation:

CTQ - Transaction Processing time Goal achieved - 1second /100 transactions Assumption - 100 Transactions happened per day Time Saved - 9seconds / Day (approx) 1 month (4 weeks / 20 days) - 4.5 minutes 6 month projected saving - 27 minutes

Coin Card 2012


Thought Process Map - 1

Thought Process Map - 2

Coin Card 2012


Process Map As is Low Level

Process Map To be Low Level

Process Map to be High Level

Coin Card 2012


Cause and Effect

Failure Mode and Effect Analysis

Example Rating Scale for Severity

Severity Description Ranking

Hazardous without warning

Resulting in corruption of the system and loss of data without warning.

10

Hazardous with warning

Resulting in the OS Corruption but no loss of user data. 9

Very High Application / configuration corrupted no loss of data 8

High Application / configuration corrupted no loss of data. 7

Moderate System partially operable (loss of secondary function. 6

Low System partially operable but with significant

degradation of performance. 5

Very Low System fully operable with significant degradation of

performance. 4

Minor System fully operable with significant degradation of

performance. 3

Very Minor System operable with minimal interference (using

refresh / retry). 2

None No effect 1

Coin Card 2012


Example Rating Scale for Probability

Probability Description Rating

Very High: Failure is almost inevitable

> 1 in 2 10

1 in 3 9

High: Repeated failures

1 in 8 8

1 in 20 7

Moderate: Occasional failures

1 in 80 6

1 in 400 5

Low: Relatively few failures

1 in 2,000 4

1 in 15,000 3

Remote: Failure is unlikely

1 in 150,000 2

<1 in 1,500,000 1

Example Rating Scale for Detection

Detection Description Rating

Absolute Uncertainty

Design control cannot detect potential cause/mechanism and subsequent failure

10

Very Remote

Very remote chance the design control will detect potential cause/mechanism and subsequent failure

9

Remote

Remote chance the design control will detect potential cause/mechanism and subsequent failure

8

Very Low

Very Low chance the design control will detect potential cause/mechanism and subsequent failure mode

7

Low

Low chance the design control will detect potential cause/mechanism and subsequent failure

6

Moderate

Moderate chance the design control will detect potential cause/mechanism and subsequent failure mode

5

Moderately High

Moderately High chance the design control will detect potential cause/mechanism and subsequent failure mode

4

High

High chance the design control will detect potential cause/mechanism and subsequent failure mode

3

Very High

Very high chance the design control will detect potential cause/mechanism and subsequent failure mode

2

Almost Certain

Design control will detect potential cause/mechanism and subsequent failure mode

1

Coin Card 2012


Root Cause Analysis

Control Strategy For Control Plan for Transaction Process

Objective Reduce Transaction Processing Time

Out of Control Conditions

Server Performance

Procedure Nature of Control What to Check Action Responsible

Transaction Processing

Review on successful transactions

Concurrency Control Performance

Measure performance on the basis of time

Chief Information Officer

Transaction Request

Review on card reader data

Accuracy of Input data

Take a data sample and measure accuracy

Chief Information Officer

Appendix J – 12 Month Cash Flow

Coin Card 2012


Appendix K – Flyer printing quotation

Coin Card 2012


Following is the price list for printing the flyer from Priceless Print in Leeds

A6 Printed Flyers size 105mm x 148mm

Colour Sides 250 500 1000 2000 3000 5000 10000

b/w 2 £34 £51 £78 £105 £123 £152 £214

b/w 2 £40 £64 £98 £115 £136 £167 £236

full colour 2 £44 £74 £109 £128 £150 £185 £261

full colour 2 £63 £100 £153 £179 £212 £261 £368

Printed on 130gsm gloss. Other materials available on request (price may vary)


Colour Sides 250 500 1000 2000 3000 5000 10000

b/w 2 £34 £59 £94 £125 £148 £175 £236

b/w 2 £40 £70 £104 £138 £163 £192 £259

full colour 2 £64 £85 £115 £153 £182 £213 £288

full colour 2 £85 £100 £162 £216 £255 £300 £405



Colour Sides 250 500 1000 2000 3000 5000 10000

b/w 2 £45 £82 £105 £145 £167 £214 £314

b/w 2 £50 £90 £115 £160 £183 £236 £345

full colour 2 £75 £100 £128 £177 £202 £262 £383

full colour 2 £108 £141 £179 £250 £285 £368 £539


Appendix L – Detailed Financial Assumptions

Coin Card 2012


Expenses

Purchases

The price of the reader machine cost £ 20.00 each, bought 40 pieces and the smart

card cost £ 2,500 for 50,000 pieces (we buy in bulk). Total purchases as follow;

1. Reader machine (100 pieces @ £ 20.00) - £ 2,000.00

2. Smart card (50,000 @ £ 0.05) - £ 2,500.00

Total Cost of Purchases - £ 4,500.00

Loan

The company borrowed a Term Loan for £ 15,000.00 from the bank with the interest

of 7% for 4 years. Therefore, the loan repayment is £ 400.00 monthly for 48 months

plus with the total interest of £ 4,200.00 (yearly £ 1,050.00).

Corporate Tax

The company will pay corporate tax of 20% of the company business minus the

capital of the business. For the Year 1, the corporate tax is £ 312.00 to be paid on

Year 2.

Salaries and wages

All directors will received salaries monthly of £ 1,200.00 each (5 persons -

£ 6,000.00), and 2 staffs will received £ 500.00 each (2 persons - £ 1,000.00).

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