Estimation of market potential of banking software in US and formulation of strategy; Nucleus Software Workshop (P) Limited, Madras

Abstract

As Information Technology is rapidly spreading its reach to all aspects of business, starting from manufacturing to space technology, more and more companies worldwide are getting into the bandwagon. Also this has been an area of rapid technological progresses. Hence the dynamics of competition within the application software industry are changing rapidly. In this fast changing scenario of software industry, Indian, software organizations have created a niche for themselves with high quality programming skills and low cost. In this backdrop, NUCLEUS SOFTWARE, which has been a relatively new company has been able to establish a name for itself in the area of banking and financial software, with prestigious assignments with CITIBANK. , To capitalize on its acquired expertise in this area, The large financial and banking sector of US has been selected as a potential target by NUCLEUS. This is all the more logical, considering the way information technology is pervading the banking sector. . The study has been an effort to estimate the market potential for banking software in US and to design an appropriate strategy for NUCLEUS SOFTWARE . To estimate the market potential, the top 230 commercial banks of US are considered and the approximate software expenses are calculated from the assets value, using the CITIBANK financial statement as a benchmark. , The total market has been estimated at about $6 billion. The whole of US has been divided into three profitable segments , such as, US EAST, US CENTRAL, US WEST, with the first one being the biggest. The second part of the report concentrate on formulation of a strategy for NUCLEUS to gain foothold in the US this year and to become a truly global player in the long term. ’ The recommendation is to establish a fully functional marketing network in the US east area and to use the database of banks to send inquiries through mail. It’s also been recommended to concentrate on the small and medium and to look for small and economical projects in beginning. After the initial entry , it should shift its focus to large banks and high quality projects.