Peachtree 2013 Annual Report Download - page 22

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Focusing our business
Focusing our business captures a number of initiatives
that we’ve undertaken:
– Changing the way we work;
– Streamlining our product portfolio and reallocating
investment to our best growth opportunities;
– Disposing of non-core businesses; and
– Transforming our brand.
Working with greater focus has led to a transformation
in how we define success and in the way we collaborate
with each other across the globe.
Changing the way we work
Although we’re executing on our strategic priorities
locally, we have defined them globally. This is a new
way of working for Sage, but we believe it is the only
way to create the right conditions for success:
– It ensures all of our people are pursuing the same
goals in a consistent way;
– It means we make products that can be deployed
globally whilst maintaining our focus on meeting
the local needs of our customers; and
– It encourages closer working practices and
knowledge sharing across the organisation.
Streamlining our portfolio and reallocating
investment
To help us identify which products and services
represent our best growth opportunities we conducted
a review of our product portfolio last year to identify:
– The closeness of products to our core business; and
– The potential for products to create value.
The review led us to categorise our core products as
Invest, Harvest and Sunset. We use this categorisation
to determine our investment priorities. Invest products
represent our best current and future growth
opportunities and receive significantly more research
and development (“R&D”) and sales and marketing
(“S&M”) investment.
Harvest products are mature, high-margin products,
and we will continue to invest in them appropriately
to maintain their market positions.
Sunset products have lower growth potential and,
in most cases, the needs they serve are better met
by another product within our portfolio. These products
have begun a sunset process and associated
investment will be redirected towards our Invest
product portfolio.
This rigorous framework for managing the portfolio
gives us clearer focus on the strategic drivers that will
influence growth in both the near and medium term.
We see Sage ERP X3, our payments businesses,
Sage One and our exposure to high-growth international
markets as some of our best opportunities for growth
in the near term.
Looking further ahead, we’re excited about being able
to further accelerate our growth with our hybrid cloud
products and mobile applications.
Disposing of non-core businesses
A number of our products did not meet with the
definition of our core business and were categorised
as non-core. These products were either not integrated
with the core or were addressing the very specific needs
of particular industries.
During the year, we disposed of several non-core
products, including:
– Sage Saleslogix
– Sage ACT!
– Sage Nonprofit Solutions
– ATL
– Automotive
– C&I
– Aytos
– UK Construction
The disposals are an important strategic milestone
and are evidence of our progress. Their successful
completion allows us to sharpen our focus on
opportunities that offer better future growth potential.
Chief Executive’s review continued
Our strategy continued
1
Organic revenue
by category
Invest 47%
Harvest 45%
Sunset 8%
2012 2013
42%
49%
50%
35%
Research and
development
Sales and
marketing
Total spend on
Invest products (%)
2012 2013
Turn to our strategic KPIs on page 45
to see how we’re doing in reallocating
our resources
See note 16 in the Financial statements
starting on page 134 for details on
the disposals
20 The Sage Group plc | Annual Report & Accounts 2013