Digital Positioning for Emergency System (Dipersys)

Name : Mozes H. Baottong Novy NRA Mokobombang Renny Kusumaningtyas Master of Telecommunication Management April 2008

Lecturer: Els van de Kar

Table of content

Executive Summary

..... 03 .. 04

1 Introduction
2.1. Storyline 2.3. Added Value

2 Service concept .. 05
.. 06 . 06 . 07 . 07 . 09 . 10 . 12 . 12 13 . 13 . 19 2.2. Service Process 2.4. Usability Study

3 Organizational network
3.1 Value network 3.2 Revenue model 3.3 Pricing model 3.5 Financial analysis 4 5 6 7 Technical architecture References Appendices

3.4 Risks and challenges

Summary 23 ... 24 ... 25

Executive Summary
DIPERSYS is another implementation of location based services system. It is designed especially for services which need precession location of the end-user. This service can be used by a car workshop company to locate its customer who gets a car broken or a taxi company to locate its customer. This system will give an exact position of the end-customer so that the desired service can be delivered in shorter time than before. This system also provides notification for the staff/driver that is responsible to serve the customer. This system is very easy and very cheap. User interface is just an application inside a GPS enabled mobile phone or a mobile phone which can communicate with external GPS equipment. Just by pressing a button in the application, the request process is completed. It uses GPRS or SMS that is very cheap compared to call. For a car workshop or taxi provider, this system can help to reduce cost on customer service. It will also increase the quality of service to the customer. And also it can attract new customers because requesting a service using this tool is easier than using telephone to call the call center. Besides Dipersys is also easy to implement and scalable. Financial forecast of Dipersys deployment for Indonesia market shows a promising figure. The ROI (Return on Investment) period is only 1 year.

Design of Service System Digital Positioning for Emergency Situations

1. Introduction The Digital Positioning for Emergency Situations (Dipersys) offers advance services more than only GPS (Global Positioning System). The aim of this system is to give accurate location identification and other services in one application. The application is created with simple appearance; the end users only press on their cellular phone to request a particular service. With this application, we want to provide the end users (car workshop/insurance or taxi provider costumer) a system with an alternative to current costumer service call center, and with the power to manage their time more efficiently while using public transportation or having car problem. The system will initially provide the end users with the ability to select particular services such as reserve taxi or ask some help from the mechanics. Based on the end user input and the current user position, the system will estimate the arrival time for the next taxi or mechanics. The system would then tell the end users about the mechanic name (for car workshop/insurance costumer) or taxi number (for taxi clients) when they would arrive at that position. The next story will give further idea why we need application like Dipersys: Imagine you drive your car in the middle of the night all alone. After miles away, suddenly your car is break down. Then, you call your car workshop to have a mechanic who can help you. The customer service staff asks you where your position is. You try to recognize your surrounding area where your car broke. Unfortunately, you only can describe your surrounding but you have no idea where your exact position is. After an hour or two the mechanic comes to you. You ask to mechanic why he comes so long. Then, the mechanic answers because your location information is not quite clear so that it is difficult to find you. This situation can happen to anyone, especially for them who live in a crowd and big city such as Jakarta. With the current services, if above mentioned situation happen to you, the easy way to get mechanic is call the 24 hours workshop services or car insurance; however, there are some obstacles with online call system (conventional system), such as:

a. The availability of phone lines; The availability of phone lines and customer service staff who handle on it is not excessively. Thats why; you need to queue in line to speak to them. The prevailing condition happen you have waited in long queue in the phone lines. Of course, it takes time which means you need more time wait your mechanic. b. The position not accurate and time consuming. The next problem is to give briefly information about your exact position. Remember, you are in the middle of the night or somewhere you have no idea to give detail description where your position is. This situation takes more time to find you with broke car because the mechanic do not have any accurate information about your location. c. High error responsiveness. After calling the 24 hour operator, operator staff will inform the mechanic to take further action. However, sometimes this process does not happen like we are expected. There can be happen miss-communication to explain what have happened to us or the information about the caused of car break down; is there because of flat or faulty battery, flat/damaged tires, alternator faults, fuel problems and etc. In another word, the current system uses too many human interfaces which can cause error in information flow. d. Intercity coordination is difficult. In current system, customer service staff should contact a mechanic in the particular based on customer request. It takes more difficult to serve many customers in many cities. By using this system, an intelligent engine can assign an engineer directly without customer service assistance. This system also can be used to taxi and bus operator to help them proving their fast services in order to find the customer. 2. Service Concept. Dipersys will help the company to improving the best services for their customers to minimize above mentioned obstacles. The idea of this system is to provide two ways an interactive communication between customers and service providers such a car workshop, a car insurance or a taxi operator. Using DiperSys, the customer can easily give accurate location information to the. Furthermore, the location identification problem process is accurate and will take only in short of time. Dipersys will also give

confirmation to the customers when the system receives the information, so that, the customers no need to worry whether their messages have been received or not. 2.1 Storyline Jullie drives her car from Ciracas to Soekarno-Hatta International Airport, Jakarta and it will take around 2 hours if there was no traffic jam. In the middle of journey, there is water float in Pluit, but, she decides to through it away because her flight will fly only a few next hours. Suddenly, her car is stop when she through the water floats. She already tried to start the machine of her car again, but it does not work. After, she tries and tries again and fail she decides to call her car insurance to get some help. However, she realizes that she can not recognize where she is. She confuses that in what kilometers (KM) in the highway. In this situation, she takes her cellular phone, open Dipersys, choose the desire application and send the request. A few minutes later the mechanic come and helps her. Thanks God! The car damage is not too serious so that she can continue her journey to the airport and have pleasant flight to Amsterdam. 2.2 The Service Process Dipersys will help the workshop or car insurance company to find their costumers location if the car breaks down happens. Figure 1.1 will explain briefly how the service will be processed:

Figure 2.1 Dipersys Service Process for car workshop

First, the end user sends request to the the Diperys application through their celluar phone. The request will be sent through GSM network. While the costumer send the request GPS application in their cellular phone will also inform the location where the end user is. All this information will be sent from Dipersys application to car workshop or car insurance to request mechanic. Car workshop or insurance will give confirmation back to Dipersys about who the mechanic will be help the end user. This information will be send to the customer through Dipersys application. This process is the same when the end user requests the taxi. 2.3 Added Value Costumer has so many advantages from this service, either for end user or content provider (car workshop/insurance, taxi provider): For end users the system will: a. Reduce the frustration associated waiting for transportation or mechanic help. b. No waiting lines and quick response. This system not depends on the availability of phone lines in the car workshop / insurance or taxi provider, so that the costumer can have response as soon as possible. c.Avoid to crime. d. Increase personal control over arrival and departure times. For content provider the system will: a. Increase customer satisfaction by keeping them informed as events occur. b. Reliability. Dipersys supported by GPS with can give accurate location information which can be used for the customer to identify their position. c. Increase passenger perception of on-time performance and overall reliability of the system. d. Efficient There no needs of customer support staff. e. Low error With features in Dipersys, to minimize human intervention on data flow. 2.4 Usability Study

Quality is defined meeting the customers expectations: Learnability Dipersys is a simple application. The end users only have to press the request application on cellular phone the menu. Accurately and Reliability Every request and allocation data from the customer is handled by GPS system so the given information is accurate and reliable. Effective Dipersys is effective application because end users only press for desire application. Memorability The application has already been set up in the cellular phone menu. Therefore, it is easy to remind how it works eventhough they will use it months later. Responsiveness The service is not depending on the availability of phone lines in workshop or car insurance company; therefore, it will give fast response to the customer. Few error The system does not require customer service staff so that will reduce error which caused by human interface. 2.4.a Usability Method In the ergonomics discipline several methods have been developed that support the analysis of all kind aspects of the user and the setting the user is in. Methods include3): a. Interviews b. Questionnaires c. Surveys d. Task analysis methods e. (participative) observation f. Participative design From above mentioned method, this project combined 2 methods between interviews and questionnaire which involved 28 participants. The participants are the people who have car insurance and member car workshop in Indonesia and Netherlands.

2.4.b Usability Test The aim of the usability test are to evaluate customer satisfaction to the current services, to identify the success factor and to get feeling how the new services should be. We asked the car insurance and car workshop members through mailing list. From the questionnaire which has already been distributed in, we got 28 respondents. The questionnaire asked about the costumer satisfaction concerning the car insurance or workshop services, waiting time to be connected with costumer service staff and the mechanic. The result from the respondents as follow: a. 64.3% respondents said they are dissatisfaction to their car workshop/insurance services, b. 51.9% respondents said that it is difficult to reach the costumer service staff and c. 92.6% said that the mechanic arrive to their position more than 1 hours. Thus, we conclude the current service is not yet provide fast services to the customer.

3. Organizational network Dipersys is a universal communication service that bridges satellite and cellular technology. The primary Dipersys communications system relied on the Global Positioning System (GPS) network. The secondary communications system functioned through a nation-wide cellular network. Both systems work together to provide Dipersys users with a coast-to-coast, 24-hour communications service. All Dipersys handset access GPS via a radio transmitter. The radio transmitter sent signals from the vehicle to a GPS satellite orbiting the Earth. The GPS satellite and the GPS receiver in the terminal both generated the same signal. This service will be focused for markets in developing country with immature infrastructure such as road, safety car and public security.

3.1 Value Network

Figure 3.1. Value Network Customer: The direct customer is the company such as insurance car and taxi provider companies. Dipersys provider has an agreement or contract with the customer. Indirect User: The user is the person that pays and uses the service to the customer Dipersys provider: This is our company.. To the customer we make an agreement or contract, to the user, we maintain and serve the use of the network by an SMS service and to the content provider a new way of supplying their content and payment of this content. Content provider: The content provider provides the application content such as Java. Network provider: The network provider provides the access to the GSM or UMTS networks. The network provider handles also the billing for the use of the network. 3.2 Revenue Model This revenue model concern the way the financial transactions are arranged 1. There are three kinds of revenue model which will be used for this service as follow2: 3.2.a
1

Bundled Service for insurance car company

De Kar, Els van; Verbraeck, Alexander; Designing Mobile Service Systems; Delft University Press, 2007.

P.48.
2

De Kar, Els van; Verbraeck, Alexander; Designing Mobile Service Systems; Delft University Press, 2007.

P132.

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Concept: Under the bundling paradigm, we assume that users who use this service will be free of charge. The cost will be paid the content provider (e.g car workshop/insurance, taxi provider). Through this model we would obtain standard revenue from the operator, at a flat rate proportional to the number of clients served. Pros: Increases the probability of acquisition even by clients who would not have otherwise acquired the service. It increases the consumer surplus by offering a reduced price and would provide a more consistent user base. Cons: Under this model, developing a brand identity will be hard and customers will know the service as provided by the operator but it will not give our company brand recognition. 3.2.b Charge pre request data sending for taxi provider to serve their regular customer Concept: Dipersys will give advantage to the taxi provider for serving their regular customer. The user can send a request and do not need wait too long for a taxi. Pros: This model represents an innovation in comparison with existing SMS request service models; it adds the perceiveness of usefulness to minimize waiting time for taxi customers. Cons: The existing service using SMS which are provide by taxi provider and cellular operator is easily to be implemented, because all of user can send SMS through handphone. 3.2.c Charge advertising fees It is similar with the model above in term of pricing scheme but the risk, margin and strategies are quietly different. Concept: As a way to reduce the fees we must charge the customer or to make the service free of charge altogether, we could charge local advertisers for location sensitive advertising that can easily hit a highly focused market. Pros: This model represents an innovation in comparison with existing Internet advertising models; it adds the location advantage that in the general the Internet model does not know. This will enable small local advertisers to benefit from this service.

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Cons: The Internet era taught us a lesson on relying on advertisement as a sole source of revenue. Television is another clear example of relying to heavily on advertising. It must always be accompanied by another steady stream of revenues to be feasible. It must also offer the customer a value added proposition.

Figure 3.2 Revenue Model 3.3 Pricing Model This system business is B2B (business to business) orientation which means Dipersys provider will not charge directly to the customer. Therefore, all the expenses will be paid by car workshop or car insurance to Dipersys provider. This application will replace the existing system such as toll free calling system, etc. In Indonesia as our case business study, government does not give any obligation for the car owner to have insurance. The way to make margin from this application as follow: The data flow in this system is approximately 10 kbyte per request. If cost per 1 kybte is Rp. 25 as a result for 10 kbyte will cost Rp. 250 per request (in Euro = 2 cent). Comparing with the existing system which using toll free: If we take approximate time for the customer talk to the customer service staff is 3 minutes which 1 minute call price is Rp. 250 (local). Then to call in 3 minutes will cost Rp. 750 (in Euro = 5 cent). In conclusion, Dipersys is cheaper than the existing system. Business scenario to sell this application for the car workshop / car insurance:

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Dipersys will be sold per bundle which consists of 1000 (a thousand) users in a year. Estimation for 1 (one) user will use this application is once a month. So, total application usage per year is 12 times per user. Assume if company want make a 100% profit. As result price per bundle is Rp.6.000.000 (in Euro = 414). However, to sell this application to taxi provider, our company will charge them per request. Further, selling price from the advertiser will be charge Rp25/request or equivalent with 0.002. 3.4 Risks and Challenges This business is subject to various risks relating to changing competitive, economic, political, regulatory, infrastructure, business and financial conditions. The following risk factors could harm this new business, financial condition and operating results, adversely affect revenues and profitability. There are some risks and challenges for this new service: a. Our services, as well as the speed at which we can roll them out depend highly on the roll out speed of the independent operators. b. We might not manage to attract enough advertising revenue to make it a viable model. c. The complexity of collecting revenue from other businesses for advertisement may represent a challenge in volume. d. Dipersys is a new services and user behavior can affect the sales and income forecast. For example, if we assume that request per month is 1 request/user and because user experience is low, he/she tends to try this service for no reason. It makes cost for data higher than assumption. e. We might face difficulties in marketing process for this new service due to there is no previous provider who offers such kind of services. f. As the service innovator, we might be unable to develop a strong brand identity, which would strongly sever our growth. 3.5 Financial Analysis Investment decisions involve weighing up the risk and the likely rewards of various options. It is often the riskiest alternatives that yield the highest possible gains while the least risky options may yield smaller rewards. Business decision makers

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therefore have to weigh up risk so as to provide the most suitable rewards for stakeholders including shareholders and customers. For the service itself the customer is the main source of finance. But service can be financed by investments out of personal savings. Only in times that the business is declining a loan will be taken from a bank. 3.5.a The market The market of Dipersys over GPS technology is counted as one of the fasted growing markets for GPS applications. The target market is the people has a good job, has a car and enjoys comfortable travelling.

3.5.b Financial analysis For the financial analysis, we will define three sources of sales as income as follows: o o o Sales from insurance car with selling bundling price for 1,000 users/year Sales from taxi provider with selling price per data sending Sales from advertiser with selling price per data sending when reply the user request The three sources of Dipersys sales will be explained in details below: Assumptions and Parameter Calculation We have used facts, figures obtained from Indonesian government website, insurance car and taxi provider information and other publicly accessible information. We have not affirmed this information independently or ascertained the reason of such assumptions. These figures are based on externally available market data for public access. The financial assumptions provide the foundation for projecting all of Dipersys financial statements. a. The facts and figures of Indonesia The facts for sales from insurance car o Car insurance holder : 800,000 holders
3 4

o Total sales of car (prediction in 2008) : 400,000 units

3 4

http://www.sinarharapan.co.id/ekonomi/promarketing/2004/0330/prom1.html http://www.tempointeraktif.com/hg/ekbis/2007/04/07/brk,20070407-97274,id.html

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o o

Car sales with credit payment : 85%

5 6

Car sales in Java island of total car sales : 70%

The facts for sales from taxi customer o Regular customer taxi (blue bird Jakarta) : 400,000 customers 7 b. The assumptions The assumptions for sales from insurance car o Percentage of Car insurance holder compare with car sales : 85% It is based on data that 85% of car sales are paid with credit payment. The insurance is obliged by bank or finance company for the payment method. o Total customer of car insurance holder in Java island : 238,000 customers. It is based on data on car sales in Java and the fact of car sales with credit payment that can be related with above assumption. o Potential customer Dipersys from car insurance : 50%. It assumes that 80% of the car user using mobile phone with GPS facility. o Cost for data request (160 characters) that pays to the cellular operator is 0.017/request. If we charge the customer o for 0.0345, it means the margin is 0.0175/request or 50.7% Dipersys charges to the customer as bundling selling price, but since the cost that mention before based on traffic per request, we still have additional margin. Assume that only 40% of the user will send the request, it gives more profit. o Selling bundling price/year (1000 users/bundle) : 414/bundle The selling price based on calculation that 1,000 user x 12 months x 0,0345 = 414
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Ibid http://www.seputar-indonesia.com/edisicetak/ekonomi-bisnis/penjualan-mobil-naik-94-5.html http://www.bluebirdgroup.com/taxis_in_jakarta.html

6 7

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The assumptions for sales from taxi provider o Potential customer Dipersys from Taxi user : 40%. This assumes that customer has mobile phone with GPS facility since he/she works in the big company. o o Selling price for taxi provider : 0.0345/request Cost for data request (160 characters) that pays to the cellular operator is 0.017/request. If we charge the customer for 0.0345, it means the margin is 0.0175/request or 50.7% The assumptions for sales from advertiser o When user of insurance car or taxi provider send a request, the reply for this request will be sent for maximum 100 characters. The rest of 60 characters are occupied to advertiser such as car producer, car audio video, restaurant and many others. o Selling price for advertisement/data send: 0.002/send. There is no cost in charge for this service that Dipersys should pay to the cellular operator, because it is including in the cost for data request mentioned above in the assumption for sales from taxi provider or insurance car. Therefore, we can assume that the margin for this service is 100% The appendix 3 presents detail explanations of how Dipersys arrived at the financial assumptions that will underpin the sales and income forecast. Capital investment decisions are those decisions that involve current outlays in return for a stream of benefits in future years. Dipersys owners made an expectation of realizing future benefits. Figure 3.3. below represents the most important decisions that the organization makes, since we commit a substantial proportion of a firms resources to actions that are likely to be irreversible.

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Figure 3.3 Capital investment decision8 The positive Net Present Values (NPV) indicates that Dipersys investment should be accepted and the increase in the market values of shareholders fund. The Internal Rate of Return (IRR) is 103.91% which use in making capital investment decisions that can takes into account the time value of money.

DOSIT Method TNO / HAN University of Applied Sciences Prof Gerard Berendsen cs

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Figure 3.4 Expenses composition The figure 3.4 shows the composition of expenses and the growth assumptions. The main expenses are Salary and purchase raw material.

Figure 3.5 five years Sales & Income forecast Figure 3.5 shows that total sales that consist of sales from Insurance car, taxi provider and advertising has a growth of 20% for every year. This is base on assumption that car sales increase at that number. Main expense is salaries as 57.5% from total expenses. This five year Sales and Income forecast gives the company ability to make a decision whether or not to invest for Dipersys. The goal is to determine the value of the option to delay or continue the investment plan.

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4. Technical architecture This solution provides 2 types of services: 1. Services for a customer whose car is broken. This customer can use this service to contact the car protection company to request a support. 2. Services for a customer who need a taxi immediately. Technical architecture of this service can be depicted as in Figure 4.1. It consists of 4 parts: end-user part, GSM/UMTS network part, Dipersys part (core solution) and client part. 1. Customer Handset Customer equipment consists of a GPRS/UMTS mobile device with additional or integrated GPS equipment and GPRS access. GPS equipment inside the mobile device can detect the current position of the customer. This position can be fetched by Java application in the mobile device and should be included in the request to the Dipersys system. End-user application can be seen in Figure 4.1. This application is a Java ME based application.

Figure 4.1 End-user application This location information is fetched and then send if end-user pressed one of three buttons. The respond will be sent back via SMS. In the case where there is no GPRS signal, the application can send the request via SMS. This will make this system more reliable.

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2. Network connection GPRS/UMTS part is an operator network that is used to transfer the message over the GPRS network. Every customers handset must support GPRS. Application on customer side will send a request over a GPRS network to the Dipersys system. In order to provide a free service, each customer must be preregistered in Dipersys system an also in GPRS/UMTS network. 3. Dipersys Application Dipersys application is responsible for receiving and processing message from customers and then forwards the results to client application. In this case, DIPERSYS receives a request that consists of location information (GIS) and translates it to exact address using the map application API and process the request. The request can be: 1. Emergency request for a mechanic When the Dipersys receives an emergency request, it will invoke an API in car insurance to look for an available mechanics based on the customer location. Dipersys will send an alert to the mechanic and also the current location of the customer. It will also reply the customer request with additional information about the assigned mechanics. 2. Request for a taxi. Based on customer request, Dipersys will invoke an API in the taxi provider application to look for an available taxi nearest to the customer location. It will then inform the appointed taxi to find the customer and also inform the customer about the detail of the assigned taxi. This is the core application of Dipersys. It has direct connections to GSM/UMTS network through VPN. And also has several connections to several customers. These connections must be fully redundant to avoid single point of failure. The application should also be redundant and can be running active-passive on two different servers.

4. Client Application

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Client application, located at the client side, i.e.: a car workshop company or a taxi provider companies. This application responsible for allocating resources and send respond to Dipersys system based on end-user request, i.e.: allocate a mechanic for a user whose car is broken. Because this application is very critical, it should a highly reliable system. In this case, it must be a fully redundant application. If the Dipersys system does not respond, it will inform the customer that there is a problem in provider side.

Figure 4.1. Network Architecture The technical solution for this service consists of 3 applications: Mobile application, Dipersys system (core application) and client application. All this application is designed using JAVA technology. JAVA is an object-oriented programming-language that can provide all the requirements of this solution. The architecture of those applications can be seen in Figure NN2 below. Dipersys consists of web server with web services to handle request from end-users. It also uses JAVA API to access available functionality on the JAVA EE Platform. Dipersys also provides a user interface in a form of web interface. System administrator can manage the entire solution through the web interface.

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Dipersys should also have a module to convert a longitude/altitude of a client to an address. It can uses Google MAP API for this purpose.

Figure 4.2. Application Architecture Use case diagram This diagram shows the relations between a particular user and functions provided by the system. In this solution, there are two users identified: end-user and client-admin. Client-admin is a person who is in charge of the service of our client.

Figure 4.3. Use case diagram 5. Summary

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1. The Digital Positioning for Emergency Situations (Dipersys) offers advance services more than only GPS (Global Positioning System). The aim of this system is to give accurate location identification and other services in one application. 2. DIPERSYS can fulfill customer perceiveness of ease to use and usefulness. 3. The target market is the people has a good job, has a car and enjoys comfortable travelling. 4. There are three revenue models: o Sales from insurance car with selling bundling price for 1,000 users/year o o Sales from taxi provider with selling price per data sending Sales from advertiser with selling price per data sending when reply the user request 5. The positive NPV ( 98,464) indicates that DIPERSYS investment should be accepted and can increase the market values of shareholders fund. 6. The IRR is 103.9% which use in making capital investment decisions that can takes into account the time value of money. 7. Technical architecture is supported by a robust, fully redundant and highly available application with. It is also scalable and expandable for future requirement.

6. References

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[De Kar 2007] De Kar, Els van; Verbraeck, Alexander; Designing Mobile Service Systems; Delft University Press, 2007. [Gerard2007] Study material of finance management subject, Prof Jan Jansen, DOSIT Method TNO / HAN University of Applied Sciences Prof Gerard Berendsen cs

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Appendices

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.1

Appendix 1 Questionnaire result

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Appendix 2 : Sample of questionnaire reply

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xxxxxx

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Appendix 3 : Business Plan

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.4

Appendix 3 Assumptions and Five year sales and income forecast

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.5

Appendix 4 Expenses

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Appendix 5 Pro forma Income Statement

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