In the context of ITS Business models Frank Berkers MSc August, 2008

Goal of the workshop Introduce/recap business modelling in the context of ITS Outline Personal introduction Business model Business model, case & plan Value web RTTI Value web NRA scenario, TomTom scenario Summarizing business modelling as a process

Content….HOME Introduction Frank Berkers MSc TNO Information and Communication Technology senior consultant Department Business Innovation and Modelling - Finance & Business Impact Introduction Business model Business model - RTTI Discussion Econometrics Computer Science/Technology Management Marketing Intelligence Analyst ABN AMRO Methodological consultant in MR senior consultant TNO ICT BIM

Business model A business model describes the way in which an organisation or network of organizations wants to create value and earn money by applying technology.

When/why do business modelling? From a historical perspective on development of NRA role ↓ From… building and managing infrastructure independently ↓ To… procuring infrastructure realisation ↓ To… supplying to and cooperating with private parties Deal with (need for) change –in technology, service..- by exploring strategic alternatives (scenarios), assess risk, – in a structured analytical way Use available methods (from private domain) also in public and public/private domains in conversation with industry Preparation for an investment-decision (business case) To facilitate, simplify and unify comparison of countries and services as a preparation for the implementation framework Remarks on terminology ‘business’ is not strictly a private domain concept (public domain produces services that lead to ‘utility’ in exchange for funds) (Business) model and case have different meanings in different contexts ´case´ is often used as casus, to refer to a situation/ scenario/ circumstance/ affair/ business

The term ‘business case’ mostly referres to a financial analysis. This can be considered as a more extensive elaboration of the financial domain A ‘business plan’ is a plan to convince decision makers and investors - also includes operational processes and track records of the management team are included How it connects Business case Business plan Business model

STOF: business model domains Service domain describes the service concept of an organisation to a specific customer/end user in a specific market segment. Technical domain describes the technical architecture and functionalities that are required to realise the service Organisation domain describes the roles, activities and required parties (valueweb) to create value for a customer Financial domain describes the way an organisation wants to generate business for a specific service. Important elements: Revenue, costs, risks and investments. SERVICE DOMAIN ORGANISATION DOMAIN TECHNICAL DOMAIN FINANCIAL DOMAIN

Value web analysis Who is the (end) user? Which roles/activities are required to make & deliver the service? What is the added value of each role? Roles Who delivers to who? What is the flow of money? Relations Which party is best capable to perform a certain role? Are there combination of roles possible that can be performed by one party? Parties Where is the power in the web? Which roles are required to get started? Which cooperations are essential for a good service delivery? Power

Why business modelling using value web and STOF? A structured approach framework: complete, customizable not formal, easily understandable many approaches are variants of this ‘Backbone’ is a service/process decomposition in line with historical perspective, i.e. shift from infrastructure (tangible) to service provider in a multi party market Identifies key roles and generates strategic alternatives (scenarios) reveals implicit choices (and power) – in cases part of the model is ‘predetermined’

Data infrastructure provider Data collection Storage / Hosting Data gathering Data aggregation Decision making Regulation Data processing End user Content Utilisation With permission of end user via service provider Value web RTTI Application Provider Service Provider Communi- cation Provider Device Provider Advertising Content providing Wholesale Service Provider

Data infrastructure provider Data collection Data aggregation Decision making Regulation Application Provider Service Provider Storage / Hosting End user Communi- cation Provider Device Provider Advertising With permission of end user via service provider Wholesale Service Provider RWS - loops RWS RWS - TIC RWS - Traffic - mgt IR detect RWS - Traffic - mgt Business model RTTI Scenario: NRA as business owner ,SMS Services: stand-alone Technique: loops - radio Organization Finance: public

Data infrastructure provider Data collection Data aggregation Decision making Regulation Application provider Service provider Storage / Hosting End user Communi- cation provider Device provider Advertising NRA Business model RTTI Scenario: TomTom as business owner Services: PND integrated Technique: cell phone - PND Organization Finance: subscription service

Data infrastructure provider Data collection Data aggregation Decision making Regulation Application provider Service provider Storage / Hosting End user Device provider Advertising NRA Business model RTTI: monetary flow Scenario: TomTom as business owner Communi- cation provider Flow of money

Business modelling process Take a current service or design a (hypothetical) service Describe the service as a process in a value web comprising roles/activities, relations (flows of products, services, information and money). Separate subprocesses Primary: from content creation to deployment to user Secondary: from enabling platform to additional services Populate/instantiate the value web by assigning parties to the roles and investigate power. Further elaborate the value web by denoting specifics of the four domains: service, technology, organization and finance. This is a business model (also referred to as business model scenario).

From business models to business case Generate: Create new scenarios or business models (for instance by choosing another technology, or playing “what if…?” ). Appraise: Each model has it’s own pros and cons and can be evaluated against a (preferrably predefined) set of requirements. Selection and detailing: After selecting an acceptable model all relevant flows and effects are quantified. This is the business case. A business case is positive if it adds value* in a given timeframe.(*utility ) It is advisable to prepare a list of requirements and priorities in advance

Questions Frank Berkers TNO ICT T E