07-044 Rev. December 15, 2009 This case was prepared by lecturer M. Jonathan Lehrich and MIT Sloan students Paul John Paredes and Ramesh Ravikumar (MBA Class of 2005). Copyright © 2007, M. Jonathan Lehrich, Paul John Paredes and Ra mesh Ravikumar. This work is licensed under the Creative Commons Attribution-Noncommercial-No De rivative Works 3.0 Unported License. To view a copy of this license visit http://creativecommons.org /licenses/by-nc-nd/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. Compsis at a Crossroads M. Jonathan Lehrich, Paul John Paredes, Ramesh Ravikumar 2004 had not been a good year for Compsis. Founded in 1989 in the Brazilian industrial city of São José dos Campos, Compsis had grown steadily and su ccessfully. In its largest service line, systems integration for electronic toll collection (ETC), th e company had gained the dominant share of the Brazilian market and had even managed projects in Australia and India. Compsis had developed strong relationships with the Brazilian government a nd toll road operators, as well as an international reputation among industry competitors for quality and technological expertise. By 2003, the company’s founders could take pride in reach ing a height of 165 employees and US$4.2 million (R$11.1 million) in revenue. In 2004, however, it appeared that Compsis’s success might be in jeopardy. Revenue fell to US$3.3 million, primarily due to the Brazilian government ’s prolonged delay in awarding new toll road construction rights to concessionaires (road operators). Despite considerable efforts by the business development team, Compsis had been unable to win new ETC projects outside Brazil, not only in Latin America but in Europe and India as well. True, Compsis was making progress in turning its ETC software – SICAT