Mobile Ticketing Business Model Analysis...Critical Design Issues: Technology Domain Critical Design...

Business Model Design and

AnalysisAntero Juntunen 16.10.2009

Structure of the presentation

Theoretical framework for analyzing and

designing business models: STOF Model &

Method

Practical application of the STOF Model: the

NFC Mobile Ticketing case

2

STOF Model

STOF: Service, Technology, Organization, Finance

A framework for analyzing business models

3Source: Bouwman et al., 2008

STOF Model

Gives a holistic view of the business model of a

service

One problematic detail may be enough to cause

an otherwise functional service to fail

STOF Model can help in identifying the key

points which could cause a service to fail

Identifying these points early makes it easier

and cheaper to fix any problems


Service Domain:

Important design variables Value proposition

Customer, End User, Market Segment

Context

Pricing

Effort (ease of use)

Bundling


Service Domain


Critical Design Issues: Service

DomainCritical Design Issue Description Balance of

requirements

Targeting How to define the target

group?

Generic vs. niche service

B2C vs. B2B service

Creating value elements How to create value for

the targeted users of the

service?

Technological

possibilities vs. user

needs and wishes

Branding How to promote/brand

the service?

Operator vs. content

brand

Customer retention How to stimulate

recurrent usage of

service?

Customer lock-in vs.

customer annoyance

Source: Bouwman et al., 2008 7

Technology Domain:

Important design variables Technical Architecture

◦ Applications

◦ Devices

◦ Service Platforms

◦ Backbone Infrastructure

◦ Access Networks

Data

Technical Functionality


Technology Domain


Critical Design Issues: Technology

DomainCritical Design Issue Description Balance of

requirements

Security How to arrange secure

access and

communication?

Ease of use vs. abuse and

privacy

Quality of service How to provide for the

desired level of quality?

Quality vs. costs

System integration How to integrate new

services with existing

systems?

Flexibility vs. costs

Accessibility for

customers

How to realize technical

accessibility to the

service for the target

group?

Open vs. closed system

Management of user

profiles

How to manage and

maintain user profiles?

User involvement vs.

automatic generation


Organization Domain:

Important design variables Actors

Roles

Value Network

Interactions and Relations

Strategies and Goals

Resources and Capabilities

Value Activities

Organizational Arrangements


Organization Domain


Critical Design Issues: Organization

DomainCritical Design Issue Description Strategic Interests

Partner Selection How are partners

selected?

Access to critical

resources and

capabilities

Network openness Who is allowed to join

the value network?

Desired exclusiveness,

control, and customer

reach of service

Network governance How is the value

network orchestrated?

Who is the dominant

actor?

Customer ownership

and control over

capabilities and

resources

Network complexity How to manage

increasing number of

relations with actors in a

value network?

Controllability of value

network and access to

resources and

capabilities


Finance Domain:

Important design variables Revenues and Revenue Sources

Costs and Cost Sources

Performance Indicators

Capital and Investment Sources

Risks and Risk Sources

Financial Arrangements

Pricing


Finance Domain


Critical Design Issues: Finance

DomainCritical Design Issue Description Strategic Interests

Pricing How to price the

service for end users

and customers?

Realize network

profitability, realize

market share

Division of investments How to divide the

investments among

business partners?

Match individual

partners’ profitability

and risk

Valuation of

contributions and

benefits

How to measure and

quantify partners’

contributions and

(intangible) benefits?

Fair division of costs and

revenues

Division of costs and

revenues

How to divide the costs

and revenues among

business partners?

Balance between

individual partners’

profitability and network

profitability


Critical Success Factors:

Customer Value Clearly Defined Target Group

Compelling Value Proposition

Unobtrusive Customer Retention

Acceptable Quality of Service


CDIs & CSFs relating to customer

value


Critical Success Factors:

Network Value Acceptable Profitability

Acceptable Risks

Sustainable Network Strategy

Acceptable Division of Roles


CDIs & CSFs relating to network

value


STOF Method

A step-by-step

approach to

designing

business

models for

services


Dynamic Business Model

Framework

Business models are not static, but they

have to be changed over time


STOF Model in practice: NFC

Mobile Ticketing One example of using the STOF Model in

practice

The STOF Model can and should be

adapted to the needs of a particular case

For example, CSFs and CDIs can be

tailored to the specific service

23

NFC Mobile Ticketing:

General Information Near Field Communication is a RFID-based

short-range communication technology

NFC Mobile Ticketing simplified is bringing the

travel card into the mobile phone

Many pilots worldwide, but very limited

commercial rollouts

NFC in mobile phones has numerous uses

Unclear business model a big reason behind the

lack of NFC handsets on the market

24

Usage example: NFC Mobile

Ticketing


Service domain NFC mobile ticketing brings concrete benefits

to end users

Adopting the service should be easy

The service should be at least as easy to use as

travel cards

Users should be able to choose from multiple

payment options

Customer service should be arranged in a clear

way for the user

26


Technology domain NFC compatible with ISO 14443

Lack of NFC handsets is a symptom of other

issues

Public has a negative perception of the security

and privacy with NFC handsets

UICC (”SIM card”) currently the choice for

secure element

Many solutions for designing UIs

27


Organization domain

28


Organization domain MNOs have multiple roles in the value network

Banks needed for payment solutions

Friction between banks and MNOs

Public Transport Operators can reduce their

costs

Handset manufacturers balance between banks

and MNOs

Uncertainties with the Trusted Service Manager

role

29


Finance domain MNOs make the biggest investments

No transaction fees for MNOs

MNOs may charge rent for applications residing

on the UICC

Hard numbers needed for effective evaluation

of NFC services

30

Drivers for Mobile Ticketing

Intuitive touch-based interaction

Real value for customers

Compatibility with the legacy ticketing

infrastructure

Reduced costs in ticketing for PTOs

31

Restraints for Mobile Ticketing

Usability may be an issue with the software

Users have negative perceptions of the security

and privacy of NFC and RFID

Uncertainties in the value network

Limited availability of handsets

32

Further information

Course T-109.4300 Network Services Business

Models in spring 2010 examines the topic in

more detail

◦ Lecturing researcher Sakari Luukkainen

◦ Course book Mobile Service Innovation and Business

Models (Bouwman et al., 2008, available online via

Nelliportaali: MyiLibrary)

33

Mobile Ticketing Business Model Analysis...Critical Design Issues: Technology Domain Critical Design...

Documents

Transcript of Mobile Ticketing Business Model Analysis...Critical Design Issues: Technology Domain Critical Design...