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eTEN

Trans-European Telecommunications Networks

PROJECT FINAL REPORT

[09 / 2004]

VER. 1.1

Contract No.: 28635 Project Acronym: STAR

Project title: Strategic Territorial Agency Reunification

Project Co-ordinator: SINTRA Francesco Fusco

Signature.................................... Date 14/09/2004

Project Review Report 2 of 47

Table of Contents

A. PART A. PROJECT SELF-ASSESSMENT SUMMARY............................................................. 3

A.1 OBJECTIVES: .......................................................................................................................... 3 A.2 VALIDATION RESULTS: ........................................................................................................... 5 A.3 PARTNERS’ COMMITMENT TO DEPLOYMENT:........................................................................... 8

B. PART B. ASSESSMENT OF THE WORK DONE................................................................... 10

B.1 MAJOR VALIDATION ACHIEVEMENTS: ....................................................................................10 B.2 MAJOR SHORTCOMINGS:........................................................................................................12 B.3 CHANGES TO ORIGINAL PLAN:................................................................................................12

C. WORK DONE............................................................................................................................ 13

C.1 MAIN OBJECTIVES OF THE REMAINING WORK:........................................................................13 C.1.1 Final Business Plan ...................................................................................................... 13 C.1.2 Pilot tests..................................................................................................................... 15 C.1.3 Dissemination and starting of deployment...................................................................... 16

D. PLANS FOR IMPLEMENTATION AND DEPLOYMENT....................................................... 19

D.1 THE SERVICES: ......................................................................................................................19 D.1.1 Describe the services that will be provided including the information content................... 19 D.1.2 Provide a technical and functional description of the infrastructure needed...................... 20

D.2 THE MARKET ........................................................................................................................25 D.2.1 Describe how the services will be marketed, including the pricing approach. ................... 29 D.2.2 Describe the expected competition and the expected market share. .................................. 31 D.2.3 Quantitative Analysis.................................................................................................... 33 D.2.4 Number of possible Marketing Areas ............................................................................. 33

D.3 THE KEY ACTORS:.................................................................................................................34 D.3.1 Identify the key actors (public and private) needed to deploy and operate the services....... 34 D.3.2 Report on the need to involve other partners in the operational phase of the project. ........ 35 D.3.3 Report on the planned initiatives to prepare deployment................................................. 35

D.4 INVESTMENT IN THE OVERALL PROJECT..................................................................................35 D.4.1 Provide a provisional time table of the project for the deployment and operation of the overall project. ............................................................................................................................. 36 D.4.2 The VTA-Network ......................................................................................................... 37

D.5 RISKS AND DEPENDENCIES.....................................................................................................39 D.6 FINANCE ...............................................................................................................................40

D.6.1 Investments .................................................................................................................. 41 D.6.2 Costs ........................................................................................................................... 42 D.6.3 Revenues...................................................................................................................... 44 D.6.4 Profit / Loss Analysis.................................................................................................... 45 D.6.5 Cash Flow.................................................................................................................... 46


A. PART A. PROJECT SELF-ASSESSMENT SUMMARY

A.1 Objectives:

1. Do the project objectives (both the long-term objectives of the project overall and the short term ones of the feasibility/validation phase) remain valid or is there a need for change?

Within the scope of the STAR (Strategic Territorial Agency Reunification) project the business idea of creating a so-called Virtual Territorial Agency (VTA) has been validated by a consortium of public and private partners coming from three different European countries (Italy, Germany and the United Kingdom). The VTA is a coordinated set of instruments for the creation of an Internet-based local territorial marketing agency. As a common framework it will merge all the existing relevant data and services of a region into a suitable platform, actively involving political and business decision-makers. Thus, it will offer concrete marketing services to a large number of business investors. The VTA aims to help public administrations to:

• extend territorial marketing to a broader audience;

• facilitate access to local resources;

• integrate business services to overcome fragmentation in assistance to investors;

• enhance local systems with one-to-one communication, interactive services and transactions.

During the STAR project, a prototype of the VTA was developed and tested in four European regions (Piacenza, Bologna, Norfolk and Saarbrücken). In this phase the following common products were identified:

• An open reference and specifications manual to give instructions and specifications on how to

build up a TM web agency

• An enabling web template (prototype structure) which has been populated at four pilot sites to

demonstrate viability

• An auxiliary set of supporting services (consultancy, training, marketing kit) to its deployment. The validation of the STAR prototype by the members of the STAR consortium has led to the conclusion that the VTA represents a unique and economic tool to set up a virtual territorial agency in order to promote a territory and attract business investments. Therefore, the STAR consortium intends to start a deployment phase for the VTA after the validation has been finished and market the VTA and its components within the countries of the European Union.

In the long run, the project STAR aims at creating and validating a set of official local points to efficiently promote the territory and attract investors, by collecting and harmonising, within one single cooperative framework, existing data and services, so far individually provided by each single public organisation (e.g. Chambers of Commerce, Trade Associations, Provincial Business Departments, Banks, etc).


As short term objectives to be achieved during the validation phase, the project STAR aims at defining

• the commercial services for the TM web site • the target market to be served • the best deployment approach

After an in-depth analysis of the state of the art and market demand in the three reference European countries, we can affirm the main goal is still valid.

A few and weak the attempts are so far to set up a local (web) agency that actually regroup all the territorial marketing resources, provided by the independent organisations within the same region.

Three deliverables (D4.1, D5.1, D6.1) report in detail the great number of local web sites dealing with marketing services and how this fragmentation hampers the concrete business attraction and relocation.

While the deliverables D4.3,D5.3 and D6.3 describe how the final STAR prototypes web sites were implemented to demonstrate the improved functionality of an integrated dedicated territorial marketing web agency.

2. Given the current progress on the project, does the project co-ordinator believe that these objectives can be achieved within the available budget and timeframe?

STAR represents a key change from existing, apparently similar projects because it will consider and validate solutions to the most common pitfalls. The services and products derived from the project STAR will in fact solve the following two critical issues which, today more than once, could be the cause of failure:

• a need for frequent and low-cost updates of the information offered. This has proven to be a critical issue for all similar initiatives so far.

• a need for reliability from the services provider’s point of view, without affecting the interactivity of the service. This has turned out to be a key issue for Public Administrations seeking to be competitive.

Given the final tangible outcomes of the project, there is a solid basis for believing that the objectives can be achieved within the available budget and timeframe.


A.2 Validation Results:

1. Is the project co-ordinator globally satisfied with the feasibility/validation results?

First of all, the project coordinator wishes to acknowledge all the consortium members for their high-quality cooperation in achieving the intermediate results.

Among many the project co-ordinator would like to underline the following consortium features that gave consortium a concrete contribution to a successful project undertaking:

ü Good team

ü Consolidated cooperation

ü Sound expertise

ü Strong commitment

ü Proper knowledge balance

The project coordinator is globally satisfied with the estimated validation results, even if the validation phase hasn’t yet finished as reported in the project time-plan.

Three deliverables (D4.3, D5.3, D6.3) report about validation platform at the three pilot sites, identifying designed commonalities and differences.

The pilot validation plans are feasible and has been completed within time schedule.

The common STAR services that have been tested during the pilot validation phase were fully identified and demonstrated by a set of professional validators.

They have been carried out in two separate sub-phases:

ü VTA tool set testing

ü VTA validation

plus

ü Some additional web services have been tested on a local basis, e.g. enterprise localisation in Italy, housing pricing in Germany, Skill and professional availability in UK.

2. Does the quality of the work and of the deliverables meet the partner’s expectations?

The quality of the work, in terms of cooperative effort to meet a common goal, is definitively good and the quality of deliverables surely meets the partner’s expectations, according to the peer review process the Project Board set up, as described in deliverable Quality Plan (D1.1).


a. The projects’ methodology of quality assurance will help Local Authorities not only in the scope of the VTA services covered by STAR. This experience will be useful also in several future implementations of services to citizens, based on interactive web technology.

The achieved results are:

STAR main products

1. Reference and Specification Manual

2. Consolidated VTA template

3. Auxiliary Market Kit

Local VTA transactional services that have be finally loaded onto the VTA prototype include

1. Added value territorial data

2. Industrial area search

3. Investment analysis

4. Business Relocation Support

These services are fully described in the deliverables D2.1 and D2.2.

We want to underline in this section one of the most fruitful goals met by our project, that is the definition of a valuable architecture capable to allow a real shared transeuropean management of TM web services.

To provide system independence and to promote syndication of information and services to each VTA, we have designed the system to be hosted from a single partners location and available to each VTA as a Web Service.

3. Is the technical approach up-to-date?

Thank to the active and effective contribution of IT partners and external third parties, involved in the technical design, the final system will be built on Internet Information based server, running a Windows NT OS and it will be partly secured behind firewalls and available over the public Internet to registered STAR users.

The VTA application makes use of open standards, such as HTML, ASP page script, SQL, XML, XSLT, Java Script, XML SCHEMA, and ColdFusion Web Services on ColdFusion MX.

Other than the production system ability to scale to larger data volumes and more registered users, the system should perform as an intrinsic interoperable tool against different operating environments, to be low cost when streamlined into several scenarios.

The design of the pilot, does not affect the systems final goal, an easily accessible online public service.

In the design of the system we have made the following basic assumptions:

ü each target user may have varying technical ability


ü each target user will have different web platforms

ü each target user will have different social and legal environment for the product

ü each target user may have different defaults, character sets or measurements

ü each target user may want additional system functionality or enhancements to be accommodated for within the system, and for it to integrate with existing legacy systems

System’s Architecture

This Architecture will provide cost saving to each VTA and simplify maintenance of the service for the STAR consortium. Validated Web services may provide a model for future services for inclusion within the STAR VTA – to be confirmed as part of the Market Validation Project and early Deployment.

In the above schema the architecture of productive area web service is represented, the major technical features are:

An open standards XML interface to upload data directly

·A simple interface for manually entering information

·A simple method based on JavaScript for retrieving information into partner websites

A visit to the www.investineu.net will allow anybody to try on-line VTA capabilities and performance.

Productive Area Architecture

Thin Client VTA Server Internet LIISY Web Service Central Data

WEB UI Norfolk Data Entry

Call Centre

Private Network


A.3 Partners’ Commitment to Deployment:

1. Is the validation strengthening the commitment of all partners to proceed with the deployment and the commercial offer of the proposed service?

Most of participant partners have a long consolidated experience in working together in European project, this helps in strengthening the cooperation for a successful exploitation.

The careful planning and tracing of each activity as required by the project has noticeably influenced the involved organisation and personnel in improving the way they are used to work, thus making much more documented (and easy to repeat) each step of the planning and of the development carried out so far.

This is believed to be an important result of the project, because in most casa Public Administrations involved to become repeatable by following a pragmatic and optimized approach. These efforts include (but are not limited to):

ü Careful personnel time tracing ü Market analysis ü Cost/benefit analysis (a complete new way of reasoning for PAs) ü Careful user analysis to find out user needs

Moreover, the same approach is being applied and successfully progressing in three different European sites, even with slight differences in the services offer and software/hardware/organisations involved.

There are chances for applying know-how related to the VTA start up in other national and European contexts, mainly in terms of organisational impact

For the above reasons, the partners have enforced their will to deploy the proposed service, in different forms.

First of all, it is already clear that a support shall be offered to other regions having similar needs, thus deploying the know-how developed within the project, under the form of a reference and specification manual and VTA template. This perspective is widely shared between the partners and needs many tasks to be performed, which include defining responsibilities, solving legal and accounting issues, and promoting the out coming results. The major clues of this commitment are: a common approved package of products and a signed deployment agreement. For its high complexity, this deployment task is being made by further approximations, starting with the first step, already being taken, which is represented by the projects’ dissemination activities and the packaging of the marketing kit : Appropriate discussion threads and forums are already opened in the STAR web site to let interested regions and organisations to enter for free and get in touch with the consortium starting getting advice about SAP and planning. As soon as more data on the contacts (type, quantity, most common questions and needs) coming form the returned questionnaire would be available it will be easier to take further steps and to include a concrete deployment proposition in


the final Business Plan, together with definitions of the support services the partners may offer to other regions, and a general scheme defining the pricing policy. On one hand, we have a focus on the possibility for affiliate new VTA centres to open, thus establishing a true commercial offer also to private actors. This focus is at present shared by private partner. At this reguard we can anticipate potential new customers answered our market survey questionnaire by stating they are keen to become future VTA users. As it’s easy to understand from all the above, the strengthening of the partner’s commitment to deploy the project results appears becoming a valuable project result itself, which could originate a launch of a well defined deployment project. The consortium believes in the future commercial feasibility of products/services deployment, having a strong consciousness of the business and of the target market. The still open issue is about the way the deployment is going to be undertaken (direct, indirect, franchising (syndication)).

Draft business plan deliverable (D3.1) outlines the existing views on this subject.

A deployment agreement has already been signed among partners and it is annexed to Final Business Plan report (D3.2).

For the above referred reasons we can again state that given the current progress on the project, there is a solid basis for believing that the objectives have been achieved within the available budget and timeframe.


B. PART B. ASSESSMENT OF THE WORK DONE

B.1 Major Validation Achievements:

In this report, the major achievements will be described at global, i.e. consortium level, as those are the most outstanding in terms of validation.

We do remind the above are fully described in the produced deliverables, in the following some results are shortly highlighted..

The major achievements of the STAR project are:

• A common definition of expected commercial services/products

• An overview about the served target market

• A shared vision of the practical pilot testing

• A homogeneous method to validate results

• A commercial agreement for future deployment

The common commercial services/products identified by the consortium are:

• An enabling web template (prototype structure) which will be populated at three pilot sites to demonstrate viability of the main objective

• An open reference and specifications manual to give instructions and specifications on how to build up a TM web agency

• An auxiliary set of supporting services (consultancy, training, marketing kit, data entry tools) useful for the effective deployment .

A positive feedback from on going trials validation users of the pilot service has been obtained, complete description can be found in the deliverable D7.2.

Estimated effort in man/days

Name WP1 WP2 WP3 WP4 WP5 WP6 WP7 Total

Intern Personnel

Thied party Assist

Intern Personnel

Thied party Assist

Intern Personnel

Thied party Assist

Intern Personnel

Thied party Assist

Intern Personnel

Thied party Assist

Intern Personnel

Thied party Assist

Intern Personnel

Thied party Assist

Intern Personnel

Thied party Assist

SINTRA 135,0 120,0 100,0 100,0 88,0 543 0 PROBO 10,0 15,0 15,0 40,0 20,0 100 0 PROPC 10,0 15,0 15,0 40,0 20,0 100 0 COBO 20,0 80,0 30,0 60,0 190 0 NORF 15,0 64,0 30,0 150,0 50,0 309 0 LIISY 10,0 25,0 20,0 105,0 60,0 220 0 SAAR 15,0 25,0 30,0 155,0 35,0 260 0 TELETEC 10,0 20,0 75,0 125,0 90,0 320 0 Total 225 0 364 0 285 0 210 0 255 0 280 0 423 0 2042 0

Actual consumed effort in man/days

Name

Intern Personnel

Thied party Assist

Intern Personnel

Thied party Assist

Intern Personnel

Thied party Assist

Intern Personnel

Thied party Assist

Intern Personnel

Thied party Assist

Intern Personnel

Thied party Assist

Intern Personnel

Thied party Assist

Intern Personnel

Thied party Assist

SINTRA 155,8 0,0 120,5 0,0 100,0 0,0 100,8 0,0 0,0 0,0 0,0 0,0 88,0 0,0 565,05 0PROBO 13,0 0,0 17,0 5,0 0,0 0,0 62,0 18,0 0,0 0,0 0,0 0,0 20,0 0,0 112 23PROPC 13,0 0,0 13,0 0,0 17,0 0,0 30,0 0,0 0,0 0,0 0,0 0,0 10,0 0,0 83 0COBO 24,5 0,0 29,2 0,0 0,4 0,0 11,9 0,0 0,0 0,0 0,0 0,0 158,6 0,0 224,62 0NORF 15,0 0,0 64,0 0,0 30,0 0,0 0,0 0,0 150,0 0,0 0,0 0,0 50,0 0,0 309 0LIISY 41,0 0,0 49,0 0,0 40,0 0,0 0,0 0,0 64,0 0,0 0,0 0,0 56,0 0,0 250 0SAAR 21,0 0,0 25,0 0,0 31,0 2,0 0,0 0,0 0,0 0,0 156,0 5,0 35,0 2,0 268 9TELETEC 18,0 6,0 26,0 3,0 79,0 60,0 0,0 0,0 0,0 0,0 125,0 11,0 88,0 9,0 336 89Total 301,27 6 343,67 3 297,42 60 204,69 18 214 0 281 16 505,62 9 2147,67 112

WP1EFFORT in the period n.1 n2. n.3 n.4 n.5 n.6

WP2 WP3 WP4 WP5 WP6 WP7 Total

The differences between the estimated and actual man/days are quite small. We wish to underline that the WP1 was increased of about 80 m/d to try to give a whole tranEuropean approach to the entire consortium activities and to the official deliverables

B.2 Major Shortcomings:

No major shortcomings occurred during the first nine months and hence no change to original plan has been undertaken.

Just a few minor issues have required our attention, but all of them are of course normal consequences of a complex and often tight schedule of work. All of these have been promptly dealt with at Project Board meeting level. Considering that the level of cooperation and communication between partners has become increasingly good, at present we believe that any minor problem may have required co-ordinator’s attention will have absolutely no implications on the overall project validation.

Just to give an example, during the common services definition session some originally planned TM services were dropped out as it was evaluated their proper market validation undertaking would be beyond time and budget allowed by the project while others were labelled as local web services, just to keep the expenses within budget ceiling.

B.3 Changes to Original Plan:

No major changes to the original plan were required, apart from minor adjustments to the project management schedule, which results from quarterly monitoring reports.

In particular, the effort spent for T11 and the deadline of the D31 have been slightly shifted because the consortium decided to set up and use a quality review process in order to outline the most important issues in the Business Plan and in the pilot plans themselves. The commitment and good attitude towards a better overall quality make us believe this process will prove to have been worth the extra time, costs and efforts it required.

Due to some difficulties to fix the final review meeting the project duration has been raised to 19 months and the final event was held on the 16th of July 2004.


C. WORK DONE

C.1 Main Objectives of the Remaining Work:

The major activities done in a tight time scale (M10-M18) are briefly reported below. It is straightforward to notice they all were compulsory to get the expected market validation.

• To finalise the selected user training (D7.1)

• To complete the pilot test (D4.3, D5.3, D6.3)

• To validate results (D7.2)

• To refine the business plan (D3.2)

• To disseminate achieved results (D7.3)

• To start deployment agreement (annex to D3.2)

Most chances to deploy results of this project and the overall success itself will be proportional to a combination of several factors, upon which:

• Public Administration savings • User satisfaction • Popularity of the results

It is easy to find out that all the above factors are bound to project’s activities (Business Planning, Pilot validation, Dissemination). We would like to give on these three main categories of activities some specific insight and outline their most interesting aspects related to the project goals.

C.1.1 Final Business Plan Business Planning for the Public Administrations have proven to be a long and challenging task for several reasons:

q The organisations and personnel examined are scarcely accustomed to some concepts which are so common for a private company. For instance, even a simple concept like market analysis are difficult to deal with if related to organisations traditonally behaving like if they were the only possible competitor. Also the big size and a complex organisational structure have contributed to make this task even harder.

q VTA processes can benefit both the Public Administration and the citizen. This adds a dimension doubling the efforts required to write and to even to evaluate a business plan.


The work carried out so far will help us to better focus our efforts in producing the Final BP, and this is believed to be one of the most difficult and important steps towards the project overall goals.

The market validation will define the best business model and approach to sell the out coming products/services in other European regions.

A questionnaire has been identified by the consortium as a useful tool to get aware of the potential market features.

The analysis of cost/revenue forecast and pricing will be dealt in the Final Business Plan report at the end of the validation phase.

Open issues on market validation that need to be solved in the next coming nine months are:

• Can we actually move territorial marketing sections in a unique MT site?

• Can we guarantee effectiveness to casual investors?

• How can we sell the virtual agency to other European regions?

The members of the consortium are aware of the fact that a successful deployment of the VTA will need a strong and efficient management. For this reason, the four regions participating in the STAR consortium are not going to market the VTA directly by themselves, because public institutions normally have to obey some restrictions whilst trying to do commercial business.

Instead, a new entity acting as a private company is going to deal with all the necessary activities in order to market the VTA with its products. A parallel analysis in the countries participating in the STAR project about the administration and legal issues incurring when creating an international company with the core mission to sell the VTA results, suggested to the consortium that this approach is fairly complicated and shows very high fixed running costs. Therefore the consortium decided that a more flexible cooperative team formed by the private partners of the Star project will manage the sales and marketing of the VTA products in the deployment phase.

This new entity will be managed by the private partner SINTRA, and it will be centrally responsible for all necessary activities for a successful deployment of the VTA and its components.

Although the future role of the public partners of the consortium will be limited as described above, they do not give up the responsibility for the sustainability of the VTA:

- First of all, they will continue to use the VTA and its services and invest further into their local VTA platform. Therefore they have a vital interest in the further success of this product.


- Furthermore, they are committed to support the distribution efforts of SINTRA in their countries by serving as active references in order to convince further regions in their countries to use the VTA.

The legal and commercial regulations building the operational base for the active deployment and marketing of the VTA for SINTRA will now be settled by contracts between SINTRA and each of the partners of the consortium. The main issues are:

- The VTA and future enhancements, which will be developed by the public partners, shall be at SINTRA’s free disposal for the purpose of deploying it to the market.

- The private partners will actively promote and sell the VTA in their countries, thus acting as sales partners for SINTRA.

- The public partners will participate in the distribution of future profits resulting from this business performed by S INTRA.

C.1.2 Pilot tests Pilot tests are taking into account much of the information collected during previous phases in order to achieve a successful result, mainly we are training user validator to receive from them valuable remarks on the proposed services.

Furthermore, the performance of similar tasks at the same time and in different contexts and by comparing results at regular intervals we discover to be able to address problems faster, avoid common pitfalls, and also make different regions feel challenged towards achieving a “European level” quality of ser vice.

In this second phase of the STAR project, from month 10 to month 17, the selected web services have been fully tested by the client community representative (valuators) against the requirements defined in the analysis and design deliverables, corrections and adjustments have been then made as required, and the final prototype has been built at each pilot site. The validation team included specific expertise in the business area addressed by the project, to ensure that the system provides the required functionality.

These are the internal documented results of each test, and the reports returned to the developers describing the problems discovered during testing, using the adopted validation criteria. A formalized procedure has been followed for communicating results of tests and corrections of known problems back and forth between the client community and developers. These validation criteria forms are part of that formal procedure. In order to assess the user acceptance of the final prototype a User Acceptance Sign-off form was adopted. This is a form, signed by the work package leader, that indicates that the system, documentation, and training materials have passed all tests within acceptable margins.

Final prototype


This is the actual Final prototype, including the online help, obtained after the adjustment were made. Any problems identified during User Acceptance Testing were corrected in the tuning of the solutions, which were then used to create the Final prototype INVESTIN.

The final prototypes are the starting point for the deployment phase and therefore they play a crucial role for the successful exploitation of the STAR project.

Final Documentation and Training Materials Tested and updated user documentation and training materials were finalized during user acceptance testing, and were used to issue the second release of OPEN REFERENCE MANUAL 2.0 plus the VTA brochure Below we give a description of the steps adopted to finalise the acceptance report and the validated prototypes.

1. Representatives of the client community who understand the business functions were selected

2. run the tests detailed in the test plans, including tests of the installation and the online help, according to the scripts developed during the Design and construction phases.

3. Any hardcopy user documentation has also been reviewed for usability and accuracy, before final print out.

4.. The testers formally documented the results of each test, and provide error reports and modifications requests to the appropriate local developer(s)

5. The developers and technical writers corrected the application, installation procedures, online help, user documentation, and training materials, as required.

6. The test team completed the User Acceptance Checklist for application transition deliverables.

7. The Project Managers obtained the signed User Acceptance Sign-off from workpackage leader, as a clue of the undertaken activity.

8. The developer(s) and writer(s) created the Final prototype and installation procedures, using the frozen development system containing all the corrections implemented as a result of User Acceptance testing.

9. The team gathered the testing documentation together, and forwarded it to the peer reviewer representative for review.

10. The peer reviewer representative reviewed the present report and completed the quality compliance form before returning the materials to the project manager for the final release.

C.1.3 Dissemination and starting of deployment These activities appear the most important means of enforcing project’s popularity and set the basis for further developments.


An important point of the consortium’s dissemination activities will be the web site, also because many technical issues related to the start up of a VTA find their best way of being discussed and spread around a wide audience by a well-organised web forum (many specialised forums covering territorial marketing topics are widely used at present). So, next steps in this direction would be:

1. Identifying threads that may interest a (relatively) wide audience in order to channel contacts towards the consortium. These threads would be:

2. VTA - legal aspects 3. VTA – business planning 4. VTA – technological issues (covering the most common IT problems/solutions

identified so far, such as web content management tool, Java programming, digital security, XML)

5. Identifying a consortium representative, responsible for each of these threads (either as a contact point or a forum moderator)

6. Opening web forums on the STAR web site or contact pages for each of these topics, through which the user may get in touch with the consortium’s representative.

7. Starting an experimentation phase to be extended until the end of the project, which results will first of all influence the final Business Plan, but also determine subsequent developments and future deployments or the know-how.

This strategy will be unavoidably integrated by the conventional dissemination activities, which are already being carried out and will be intensified the next months depending on the degree of progression on the most visible results.

STAR Time Frame

Date Activity

Del

iv

WP

Dep

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Con

trib

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Res

p

Don

e

Mo

nth

Pee

r R

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01/01/2003 Execution Official Web Site D15 WP1 SINTRA X 2 PROPC 31/03/2003 Communication and Dissemination Plan D73 WP7 COBO X 3 SINTRA 31/03/2003 Quality Plan D11 WP1 SINTRA X 3 NORF 31/03/2003 Quaterly mngt report D12 WP1 SINTRA X 3 SINTRA 31/03/2003 Emilia Romagna State of the art D41 WP4 SINTRA X 3 SAAR 31/03/2003 Norfolk State of the art D51 WP5 NORF X 3 COBO 31/03/2003 Saarbrucken State of the art D61 WP6 SAAR X 3 PROBO 30/06/2003 User Interface design D22 WP2 D21 (m6) D32 (m18) SINTRA X 9 TELETEC 30/06/2003 Quaterly mngt report D12 WP1 SINTRA X 6 SINTRA 30/06/2003 Definition of services to be deployed D21 WP2 SINTRA X 6 LIISY 30/06/2003 Preliminary Business Plan D31 WP3 D32 (m18) TELETEC X 6 SINTRA 30/06/2003 Emilia Romagna detailed pilot setup D42 WP4 D41(m3) SINTRA X 6 SAAR 30/06/2003 Norfolk detailed pilot setup D52 WP5 D51(m3) NORF X 6 COBO 30/06/2003 Saarbrucken detailed pilot setup D62 WP6 D61(m3) SAAR X 6 PROBO 30/09/2003 Interim progress report + CS D13 WP1 D12 (m3, m6) SINTRA X 9 SINTRA 30/09/2003 Quaterly mngt report D12 WP1 SINTRA X 9 SINTRA 03/10/2003 Review Meeting - Brussels X 10 31/10/2003 Emilia Romagna results of test D43 WP4 D42(m6) D32 (m18) SINTRA X 10 SAAR 31/10/2003 Norfolk results of test D53 WP5 D52(m6) D32 (m18) NORF X 10 COBO 31/10/2003 Saarbrucken results of test D63 WP6 D62(m6) D32 (m18) SAAR X 10 PROBO 31/12/2003 Quaterly mngt report D12 WP1 SINTRA X 12 29/02/2004 Web Guide D71 WP7 D32 (m18) COBO X 14 PROPC 31/03/2004 Quaterly mngt report D12 WP1 SINTRA X 15 SINTRA 30/06/2004 Final Report D14 WP1 D12 (m12, m15) SINTRA X 18 ALL 30/06/2004 Full Business and exploitation plan D32 WP3 D31 (m6) TELETEC X 18 SINTRA 30/06/2004 User acceptance report D72 WP7 D71(m18) SINTRA X 18 LIISY

D. PLANS FOR IMPLEMENTATION AND DEPLOYMENT

At the moment this document is being written it is quite difficult to integrate with fresh content all the issues listed below for a number of reasons. Mainly, all the much recently submitted pilot plans and draft business plan already contain almost all the available information up-to date, which can be enhanced here only in a few cases.

D.1 The Services:

D.1.1 Describe the services that will be provided including the information content.

The services, which should be provided by an agency for territorial marketing, are grouped into four categories according to a comprehensive conceptual model that worldwide literature considers a reference frame to classify services along two axes: interactivity – user profile.

The four categories are:

Generic information: An ordered set of facts and features describing the region

Key indicators: A list of more relevant parameters to evaluate the region

Interactive services: A set of web based transactions to interact with the VTA to get some computed information or activate some processes (e.g. locate and prebook an industrial area)

On line services: A group of services provided by qualified personnel staff (e.g. a marketing call centre)

During the STAR project an analysis was performed in order to identify the invariant set of services to be put in the front end of VTA (refer to report D2.1). The result is given in the table below. It shows a list of common services which have to be present on any VTA instance. As can be seen, Online Services as one of the four above mentioned categories were dropped out since these depend heavily on the local structure of a marketing agency. It has finally to be noted that any local implementation of VTA will actually provide their own specific services to support business relocation, as a combination of front-end and back-end mixture.


D.1.2 Provide a technical and functional description of the infrastructure needed.

Please refer to D4.2, D5.2 and D6.2 deliverables for an in depth description of the implemented IT infrastructure. In the following the overall needed infrastructure is simply shown in the below diagram.

It represents the networking features of STAR VTA points and some major links to relevant connected sites.

From one single European entry point( 1) you can reach regional canonical TM web sites (2) and then you can interact with executive web agencies (3). It has to be noted that due to Internet enabling technology any level can be directly interacted with.


Level

1 2 3

In the following sections we briefly summarise the infrastructure of the different pilots. It ought to be underlined Italian pilot was set up in two different sites because we want to validate local focused VTAs instead of one larger but generic VTA.


D.1.2.1 Emilia Romagna – Italy VTA – Bologna Implementation Schema

Layers

ArcSDEdata gateway

ArcIMSservices

STAR Web application(MS IIS5 on Win2000

server)

File System

Web contentmanager (ASP

pages)

MS Access

Tables Tables anddynamic pages

Oracle RDBMS(on Sun Solaris server)

The components in use in this architecture are:

• A Compaq DL 360 rack Windows 2000 server with Internet Information Server 5 • ESRI ArcIMS Web map server • Sintra’s web content manager, storing information in a relational database • A SunFire 280 rack Solaris 2.8 server, with Oracle Database 9i Enterprise Edition

and ESRI ArcSDE, used to store tables and cartographic layers In order to make the system completely compliant with the standard DBMS used in Province, also the dynamic pages will be taken to Oracle RDBMS.

The final architecture will consequently be the following.

Layers

ArcSDEdata gateway

ArcIMSservices

STAR Web application(MS IIS5 on Win2000

server)

File System

Web contentmanager (ASP

pages)

Tables anddynamic pages

Oracle RDBMS(on Sun Solaris server)


VTA – Piacenza Implementation Schema

Web Service

Client

Internet InformationService

Windows 2000 Server

Internet InformationService

Windows 2000 Server

Internet Explorer 5.5/6.0

Netscape

Internet

External database

D.1.2.2 Saarbruecken – Germany

STAR - Communication Network

EnterprisesCitizens

Public Inquiries

Local BrowserVTA - Navigation

Phone switchingHelp & Service Desk

Expert 1Expert 2

Expert 3Expert 4

Meeting of Experts

Advisor

specialSolutions

Phone InquiriesWWW - Searchengines

Electronic Mail

Internet - InquiriesIntranet - Inquiries

Actualities

Basic Territorial Informations

Database

Regional GIS Database

Service 1

Service 2

Service 3

Service 4

Online - Help - Database

External Links (regional)

Mail-Exchange

Enterprise-Mail-Infosystem

Personal Contact-Pages

STAR VTAGlobal Network

Telecommunication

Contacts

www.investineu.netwww.investinnorfolk.ukwww.investinpiacenza.itwww.investinbologna.it

www.investinsaar.de

customer advisory servicetechnical support (IKS)

advice regards contents (specificdepartement)

unique phonenumber

Means of communication of STAR VTA / Final Structure June 2004

D.1.2.3 Norfolk – United Kingdom The current intention is to host the STAR website with NTT/Verio who are a specialist hosting company and we have worked with them on many other client projects.


The Norfolk website will be set-up as one virtual server on the following physical server platform: 700 MB disk space Solaris 2.6 Unix Operating System Triple data backup The website site will be covered by an NTT/Verio Service LevelA greement that provides 24x7 support for the site and 100% service level availability. Service credits are available for specific service issues that reduce the actual service level achieved in any month.


D.2 The Market

In the framework of the STAR project we confine ourselves to look at the market in the countries of the STAR consortium in order to get an estimation of the potential for the marketing of a VTA. As an example for the countries having recently entered the EU we included the polish voivodships.

Market in Italy

It is considered that in Italy, the market for on-line public services for enterprises is in its initial phase. In effect, it is a new issue in Italian Public Policy, and, indeed, in 2003 the Department for Innovation and Technologies has launched a huge project to support technological innovation necessary for eGovernment. At present, there are not many Italian public or private organisations with innovative web-sites aiming at providing comprehensive territorial marketing services, which follow the eGovernment qualitative standards. Anyway, these Agencies could be interested to have a consultancy for presentation of marketing services on the web. In fact it is probable that other Italian potential customers for the VTA will want to access this consultancy, especially if they have not yet implemented a web site. So it is important to see the data and the numbers of the overall Italian market addressed. The overall number of the Italian provinces which should be interested in setting up a VTA is about 103, but it has to be seen that only a few Regions and Provinces have decided to coordinate the existing Territorial Marketing offer into web-sites and portals at the Provincial level. There are two different types of competitors to VTA services: 1. Companies which provide direct support to enterprises to settle in new areas. Although quite a number of these companies existed in the past, with the introduction of the Internet technology, they are gradually changing their offers to provide value-added services, often including use of the web services. 2. The traditional software houses that already provide equipment and applications to the Public Administration can provide software solution of the kind of VTA. In this second category we see large companies with well-established bases such as IBM, Finsiel, Olivetti, as well as a large number of smaller companies, including ADS, SAGA,CORE, Centro Computer and Delisa. Although they have a large share of the Italian market for standard processing, in general they are not able to provide the advanced capabilities of the STAR offer. Given the complexity of setting-up a VTA, the main competition will be actually in the area of consultancy to the Public Administration, and in providing Project Management. Target Market


The product, i.e. STAR VTA can be directly used by those organisations which are delivering marketing services for their territory, whenever VTA is recognised as a valuable tool to streamline and improve their different actions. Thus an in-depth analysis of their annual cost budget gives a rough figure of the potential market for a STAR VTA. So far we have got only fragmented figures, nevertheless an assumption of overall estimated spending could be made. The region is called named EMILIA and it includes the area of five administrative provinces: Bologna, Modena, Reggio-Emilia, Parma e Piacenza. For each of these provinces we have at least the following canonical major organisations: • The Province • The Capital Municipality • The Chamber of Commerce • The Enterprise Association plus a set of minor (i.e. smaller organisations). For sake of reliability we limit our investigation to only the major bodies and for each of them we calculate the current spending 2002 (in €) for web and press advertisement as the potential market for STAR VTA We thus obtain the following table: Organisation

Bologna Modena Reggio Emilia

Parma Piacenza Ferrara Total

Province 468.000 292.000 350.000 390.000 135.000 20.000 1.655.000

Capital Municipality

200.000 150.000 160.000 180.000 27.000 110.000 827.000

Chamber of Commerce

19.000 18.000 21.000 20.000 19.000 20.000 117.000

Enterprise Association

10.000 12.000 20.000 16.000 42.000 10.000 110.000

GRAND TOTAL 2.709.000

Market in Germany


In order to gain knowledge about the market for the VTA product, a first market study was carried out in Germany using the Internet, the Deutsche Städtetag and other consultants surveys. From the German point of view the first group of clients to buy a VTA are the economic promotion bodies of the German cities and provinces. The “Deutsche Institut für Urbanistik” has interviewed 195 of these cities in the year 2000 to find out the current state of the economic promotion activities of the cities and to highlight strengths and weaknesses of these activities. The main result of the research was that the majority of the cities have confirmed, that (compared with the year 1995) territorial marketing and usage of IT-capabilities have the greatest importance. It was highlighted that “territorial information over the Internet” is a service necessary to develop quickly in the coming years. In 2001, the research institute “Kienbaum” published the results of a study on “economic promotion of German cities in the Internet”, rating the 50 biggest German cities. One result was, that they could assess the increasing development of Internet activities for economic promotion between 1999 and 2001. But the most important result was, that most of these cities have no separate territorial marketing presentation in the Internet, the related pages are hidden between the other Internet pages of the city and often difficult to find. A further weakness was still the absence of published contact sites of experts and an easy to use contact method between investors and communal experts. Economic Promotion in Public Administrations in Germany Some research results of the current year (Kienbaum, Bertelsmann, Ramboell ) confirm that in most of the bigger German cities economic promotion is existent in the public administration, but only in approx. half of the cities and of the districts (more in Western Germany than in Eastern Germany) a One Stop Agency is running. A special research of the University of Hamburg ( based on 365 cities and districts) showed that in most locations economic promotion via Web Agencies is expected during the next years and the majority of the requested public bodies will realize it by using external experts and applications: Based on these more or less equal results of the current weakness of German cities’ economic promotion in Internet the researchers ask for a better territorial marketing under a common goal: “Services, infrastructure information, territorial information given by digital thematic maps bundled in a single easy to use Internet portal and forming a territorial cluster for territorial marketing between all related bodies”. They claimed also the integration of the digital signature in the services for B2A / A2B communications via Internet, to speed up the workflow between enterprises and administrations. The overall market in Germany can be divided into three groups:

1. Public bodies as cities and provinces 2. Economic promotion entities (often in public ownership)


3. Private consultancy enterprises The German partners decided to focus in the first step on the so called 323 “Landkreise” (small regional bodies) which belong to the more weak economic promoters in Germany: State of: No of Districts

Baden-Württemberg 35

Bayern 71

Brandenburg 14

Hessen 21

Mecklenburg-Vorpommern 12

Niedersachsen 38

Nordrhein-Westfalen 31

Rheinland-Pfalz 24

Saarland 6

Sachsen 22

Sachsen-Anhalt 21

Schleswig-Holstein 11

Thüringen 17

Based on the described studies and researches approx. 50% of the districts are potential clients for VTA due to the massive lack of the use of Internet for economic promotion of their territory. The market for territorial marketing tools is in an evolutionary stage, because of the introduction of GIS referenced services for a lot of industrial branches. For public administration there are only some local applications developed, most of them only focussed on the needs of their local clients. Market in the United Kingdom

There could be competition from other agencies within the local area that may operate independently from a local inward investment partnership. This could be existing


regulatory functions such as call centres and libraries, property agents etc. Furthermore, there is also a Business Link in each county council area and usually a Chambers of Commerce which might access it. The two latter may also be regarded as potential competitors, but usually they work in partnership with the local authority. However, competition is likely to come from neighbouring, or indeed any other local authority or territorial agency across the world, that might wish to emulate what is being done in NORFOLK. The competition is more real from those parts of the world with a similar economic base - particularly those with a similar knowledge or academic base, or with lower labour property costs. As the structure of local government changes in the UK, regional government, or other agencies such as the Small Business Service (The National Business link) or the Institute of Directors that may develop a regional face could start to become keen to develop similar products. Compared to the above-listed entities, the STAR VTA is unique in the sense that it will be the only truly integrated service to assist businesses relocation. While services such as Direct Access and UK On-line offer some regulatory advice, neither can be described as being a truly territorial marketing web site. The STAR VTA aims to fill this gap by providing information in a simple to understand format. It will enable a business, or potential business, to quickly and easily understand the characteristics that might affect them without having to refer to a range of different sources or departments.

D.2.1 Describe how the services will be marketed, including the pricing approach.

The starting point to define how the services will be marketed is to clarify the underlying business model and the market demand segmentation.

Business model


STAR Project

PIACENZA BOLOGNA NORFOLK SAARBRUECKEN

Validation of "Virtual Agency (VTA)"

SINTRA LIISY Teletec

4 Pilot Sites with common structure

VTA

TERRITORIAL

AGENCIES

VTA SERVICES

ENTERPRISES

PAY TO

OFFERTO

SELLS

TO

PIACENZA BOLOGNA NORFOLK SAARBRUECKEN

DEPLOYMENT AGREEMENT

SINTRA / VTA Marketing Team

SINTRA LIISY Teletec

Deployment

Return on Investment

Demand segmentation


To describe how the services will be marketed there exists a dual position from STAR

consortium point of view, according the nature and the role of the given partner.

At one hand we have private partners who whish to sell STAR products to Primary Market to assure a good revenue, in term of cash flow and profit from STAR current investment, at the other hand we have public partners seeking to marketing the services to their territory to generally improve quality of life and social benefits

The consortium signed a final deployment agreement to tight up the commitment in the commercial exploitation of the STAR outcomes, as described in the final business plan (D3.2).

A deployment proposal VIT@L was launch in the pending call of eTen 2004/1.

D.2.2 Describe the expected competition and the expected market share.

There is definitely no clear competition for the STAR services, major public local organisations can be considered competitors as they really provide marketing information but so far failures in capturing large business relocation audience testify there is room for making business.

Market share is thus limited by the potential investment capacity of the STAR consortium to reach target market and in the limited budget available for the served customers to sustain initial deployment expenses.

In the following diagram the STAR positioning is given to show where the final product is supposed to be set by participating partners.


At this stage of the progress we can supply rough figure above the target market.

Market segmentation of the TM services and providers Le

vel o

f co

mpl

exity

Basic generic web site Classic agency

Transactional web site Virtual agency

STAR

Market segmentation of the TM services and providers Le

vel o

f co

mpl

exity

Basic generic web site Classic agency

Transactional web site Virtual agency

STAR


D.2.3 Quantitative Analysis

To have a closer look on the possible market we studied the situation in the partner countries Italy, UK, Germany and Poland, one of the countries having just joined the EU.

Starting from the consideration that the request for Virtual Territorial Marketing Agencies (VTA) is most promising in areas with bad economic conditions we set up a rating for the provinces in the four countries.

The basic numbers used to calculate the rating indicator are inhabitants per area (weighted with the factor 25) and unemployed persons in the area (weighted with the factor 75).

The result is a rating indicator showing a ranking of the regions according to highest unemployment rate and lowest inhabitants density.

With the selected methodology the different administration areas become comparable and it solves the problem of different area sizes in the partner countries. We also can exclude all areas with high inhabitant density.

The following table shows the number of provinces (Italy), Landkreise (Germany), counties (UK) and voivodships (Poland) interesting for VTA deployment. Hereinafter we name them “Territorial Agencies”.

D.2.4 Number of possible Marketing Areas

Country Potential marketing areas with high demanding VTA needs

Potential marketing areas with medium demanding VTA needs

Total provinces

Italy 39 64 103

Germany 92 228 320

UK 99 29 128

Poland 9 7 16

Total 239 328 567


D.3 The Key Actors:

D.3.1 Identify the key actors (public and private) needed to deploy and operate the services.

D.3.1.1 Emilia Romagna – Italy There is the need to involve the Emilia Romagna region and its IT company ERVET to harmonise and integrate STAR web sites with their institutional sites other than Associations of local authorities at larger scale and Chambers of Commerce to operational exploit VTA. In addition a agreement in under way with the new Agency for territorial marketing which has just be created in the city of Bologna.

D.3.1.2 Saarbrucken - Germany

As the Capital city of the State of Saarland, Saarbrücken is also the economic and cultural centre of a cross-border region, situated in the heart of Europe. Its vicinity to France and the traditional Franco-German service industry network had established a "European competence" long before the Single Market was founded. Saarbrücken's other hallmark is its superb quality of life which is also a reason for companies to settle in the city region.

Until the early 80´s Saarbrücken was a place dominated by big iron mill and iron construction companies. As these were gradually phased out, there was a need to create new industries with new jobs. Today Saarbrücken has a well-developed service sector and a lot of SMEs working for the IT-Branch, the car-construction branch and advanced machinery branch. The university of Saarland and a high number of IT-Research institutes are concentrated in Saarbrücken.

The city administration is one of the best IT-equipped administrations in Germany. It is member of Major Cities of Europe and the Union of German Bigger Cities..

D.3.1.3 Norfolk – UK STAR will develop a local partnership called “Shaping the Future” This is an inclusive partnership with over 3,500 people engaging at different levels. It is a partnership with the County Council at its heart that is geared towards attracting inward investment into Norwich.

The partnership includes representatives from both the public and the private sector. These include:

• Businesses (over 200 businesses are actively involved in Shaping the Future and in excess of 5,000 businesses per annum benefit from partnership activities)

• Business Link Norfolk


• District Councils • EEDA • Employment Services • FE colleges • Go East • Local Economic Forum chairs • Norfolk Careers Service • Norfolk Chamber of Commerce • Norfolk County Council • Norfolk Learning and Skills Council • Rural Community Council • Sector/Cluster Group chairs/co-ordinators • Strategic Partnership chairs • Trade Unions • UEA • Voluntary Sector

D.3.2 Report on the need to involve other partners in the operational phase of the project.

The team is aware of its own weakness in facing a so huge market and a effective marketing action will surely be beyond consortium own resources, hence each partner at local level is seeking to involve local other players in term of key actors to amplify the commercial potential of the consortium, as it is written in the draft deployment agreement.

D.3.3 Report on the planned initiatives to prepare deployment (e.g. joint ventures, contractual arrangements between partners).

The planned deployment initiatives undertaken by the consortium are:

• to define and sign a deployment agreement (a draft deployment agreement has already been sign in order to guarantee a coherent partner behaviour in the last half of the project.

• to approve a deployment action plan, which will be started just after the end of this validation phase

Both will be included as annex to the D3.2 deliverable.

D.4 Investment in the Overall Project

The draft business plan assumes that the prototype will be deployed at several European sites, including participant regions, for a total initial deployment phase estimation of about 16 local points, with no yet clear distribution at country level.


As far as consortium knowledge is concerned, initial Technical Annex figures can be confirmed, a detailed forecast will be finalised by the end of the project.

Upon such assumptions, in the following a provisional estimation of overall costs and expected revenues is shown below.

D.4.1 Provide a provisional time table of the project for the deployment and operation of the overall project.

From a marketing point of view the VTA is mainly a product combined of software and consultancy. The most common approach for distributing such a product into a broad market would be to build up a highly qualified team of sales representatives and consultants and sell directly to the customers. This approach was evaluated during the STAR project (refer to Draft Business Plan, Deliverable D 31) and, finally, given up in favour of a network concept. In this approach the customers using the VTA have the status of associated members paying an annual membership fee for using the services of the organisation, such as the right to use the VTA, getting further information and assistance.

The main reasons for this decision are:

- In the first model the customer has to pay relatively high license fees for the VTA at the beginning compared to a significantly lower annual membership fee. Especially for public institutions these high initial investments could have prohibitive impacts.

Investment categories Initial market deployment phase (24 months)

1 Specific studies and validation exercises

Franchising Analysis

€ 45.000,00

2. Material Investment Technical equipment € 1.175.000,00 Office equipment € 272.500,00 Agency Furniture € 775.000,00

3. Intangible Investment Marketing campaigns € 130.000,00 Training € 525.000,00 Acquisition/development of contents

€ 825.000,00

Translations Software integration * Software licenses * Legal issues and IPR € 135.000,00 Set-up of organisational structure € 2.675.000,00 Other intangible investment

SPECIFY

TOTAL €6.557.500,00


- The market analysis showed, that public institutions seem to be more prepared to join an organisation offering fitting services and interactions with other members than to invest completely on their own in the improvement of their territorial marketing.

- The costs and risks to build up the new entity for the deployment of the VTA following the first approach are fairly higher compared to those of the network concept.

D.4.2 The VTA-Network

The basic idea for this distribution model is, that there are a lot of small and medium-sized regions spread all over Europe (- especially regarding those countries which soon will join the EU -), which either do not have the necessary resources and experience for a professional territorial marketing or want to reach a better visibility in the perception of potential investors. For them it might be very attractive to subscribe to an association where they can find all the tools and information to build up an own territorial marketing with relatively low costs.

Although it is true that up to a certain degree regions are competing against each other whilst trying to attract new investors, there tend to be many advantages in communicating. No potential investor will take a decision for the allocation of his business just only by using web-based services. So, the competition between regions regarding web-based territorial agencies is relatively low. On the contrary, especially smaller regions could profit from working together with other smaller regions in order to defend themselves against the marketing power of the big regions or municipalities. In addition, even for narrow-located regions fighting for the same potential investor, there might be advantages in communicating with each other, by that way preventing themselves from being played off against each other by the investor.

Together with the new VTA team SINTRA will build up this descibed association as the kernel for the future commercialisation of the VTA with the accompanying services. The revenues will be generated mainly by the annual membership fees. The main services the members of the association will receive in return are:

- right to use the VTA with all its components, - regular updates of the VTA with all enhancements, - free consultancy or support of 2 man-days per year, - regular newsletter, - free attendance at regular annual events, - actively managed open forum for the members for intercommunication.

A second source of revenues will be the fees for consultancy and training, if a member needs further assistance. For this he will have to pay on a timely base.


Compared to the distribution model of direct selling where the customer has to pay a relatively high license fee for the VTA at the beginning, here the stream of revenues per customer is extended over a longer period of time, thus forcing the VTA organization to permanently improve its different offerings.

As already described it is necessary to attract further partners in order to amplify the acquisition of new customers and to be able to offer local support in different countries.

As already described the consortium owning the property rights of the VTA has a vital interest in a succesful marketing for the VTA. The public members of the consortium therefore support actively the marketing and sales effort of the new VTA team under the leadership of SINTRA. Because all public partners of the STAR consortium are using the VTA already in practice, they will serve as references for new customers, which will be of very high value for a successful penetration of the market, especially in the start-up phase.


D.5 Risks and Dependencies

Contacted Universities and Chambers of Commerce provide consortium periodic surveys about territorial marketing opportunities and they do reveal fragmentation could seriously hamper investments. The risks to be faced are related to the commitment of public organisations in conveying resources for one STAR canonical official territorial marketing web site.

Dependency is related to the interoperability with legacy systems, owned by public organisations, where bureaucracy and legal constraints could hamper exploitation.

Public partners are clarifying the issues at local level to fit national or regional regulations.

The D7.2 deliverable will include a section dealing with such topics.


D.6 Finance

As consequence of the positive results of the validation of the VTA, the public partners of the STAR consortium are going to use the VTA with its tools after the end of the validation phase by themselves. For this purpose further investments will be necessary .

Thus, the public partners of the consortium establish, maintain and develop their local VTA platform with a double-railed view. While on one hand the public partners have a strong need for increasing their economic promotion using e@Government applications like VTA the given budget for economic promotion has to be partially rerouted to finance these applications. On the other hand, at the same time their pilot installations with their further enhancements serve as a references for the promotion of VTA, thus helping SINTRA with its new VTA marketing team to distribute the VTA to the European market.

As already described the the public partners are not going to commercialise the VTA directly by themselves, as described above, for them no further calculations for profit or loss are reasonable in the framework of this business plan.

The following table shows the estimated average expenses for all the partners during the first 30 months of the deployment phase:

Estimated costs for Public Partners

Period: 30 months Non recurrent costs Monthly Cumulated

operating costs (30 months)

1. Office ( 4 rooms)

Facility management 2400 18.000,00

Office rent 6.000,00 45.000,00

Office equipment 40.000,00 40.000,00

2.Organisation

Project costs 100.000,00 100.000,00

3.Content works


Service set up 480.000,00 16000 960.000,00

Update costs 6.000,00 180.000,00

Translation costs 600.000,00 9.000,00 870.000,00

4. Personel

Personel costs 0 96.000,00 2.880.000,00

Training costs 120.000,00 120.000,00

5.Computing

Software 48.000,00 48.000,00

Hardware 60.000,00 8.000,00 300.000,00

TOTAL 5.561.000,00

New Entity for Commercialisation

The new entity for the commercialisation of the VTA is a newly created de-facto team, which will work under the leadership of the private partner SINTRA.

A financial forecast is given for the first 5 years of the deployment. Based on estimations of

- necessary investments,

- operating costs, and

- expected revenues

profit and loss accounts together with a cash flow analysis have been developed. All calculations are exclusive value-added tax (VAT). The main results are shown in the following tables; further details on a quarterly base can be seen in a complete overview in Annex 3.

D.6.1 Investments To build up a new commercial entity affords investments, even if it can start under the umbrella of an already existing company like SINTRA. Apart from investments for equipment and other material the main investments will be the further development and improvement of the VTA and the acquisition of contents for the different services which will be offered to the VTA network.


INVESTMENTS (in TEURO)

Y 1 Y 2 Y 3 Y 4 Y 5

Office Equipment 35,0 15,0 0,0 10,0 10,0

Technical Equipment 25,0 10,0 0,0 5,0 5,0

Software 15,0 5,0 0,0 5,0 5,0

Acquis. Content / Development 140,0 280,0 50,0 100,0 100,0

Total 215,0 310,0 50,0 120,0 120,0

As the table shows the main investments will be made in first two years of the deployment. It can be foreseen, that, together with the improvements developed by the public partners in that period of time, the investments for the further enhancements of the VTA will then have led to complete, stable and attractive product.

D.6.2 Costs The costs are calculated for a working team of 5 employees in the starting year, which grows to 8 employees in the fifth year. It is assumed that from the very beginning an own sales force is needed, whereas the need for own consultants will not be given until the end of the first year of the deployment, because first a base of customers has to be created, before consultancy can be applied. Costs (in

TEURO)

Y1 Y2 Y3 Y4 Y5

Personnel 247,5 361,9 374,0 384,6 443,2

Sales & Marketing 115,0 116,0 68,0 86,0 86,0

Material & Services 120,0 120,0 120,0 80,0 80,0

Misc.(depreciation, interests, rent, etc)

94,3 199,8 233,0 233,5 214,1


Total Costs 576,8 797,7 795,0 784,1 823,3

Table and diagram show the typical effect, that personnel costs dominate in a service oriented company. Among miscellaneous costs depreciation and paid interests constitute the main cost elements. The interests to be paid result from the estimation of cash flows (see below); any lack of liquidity resulting from insufficient operational internal cash flow is assumed to be covered by bank credits with an interest rate of 6 %.


Costs in 5 Years

0,0

200,0

400,0

600,0

800,0

1.000,0

Y1 Y2 Y3 Y4 Y5

1000

EU

RO

PersonnelSales & MarketingMaterial & ServicesMisc.(depreciation, interests, rent, etc)Total Costs

For the calculation of commissions as part of the costs for sales and marketing we estimate, that nearly one third of the new customers will be acquired by sales partners, who will get a fixed commission of 3.000 EURO per customer.

According to the nature of the business, starting with the second year, the costs remain relatively stable over the time, because maintaining and supporting a network of associated members will cause decreasing marginal costs per newly entering members while revenues increase direct proportionally to the number of members. This underlines the statement, which has been made earlier, that creating and maintaining such a network tends to be a steady business with limited risks.

D.6.3 Revenues According to the chosen distribution model the revenues consist of membership and consultancy fees. Regarding the benefits a member of the VTA network will profit of, an annual fee of 10.000 EURO seems to have a high chance to be accepted by the market. For the estimation of revenues coming out of consultancy and training (2 consultants starting at the end of the first operating year, 5 starting with the fifth year) we assume 600 EURO per man day, which leads to roundabout 100.000 EURO per consultant in a year. A deduction of the revenues for consultancy has been taken into account for the amount of free consultancy the members of the network will get for their annual membership fee.


Revenues (in TEURO)

Y1 Y2 Y3 Y4 Y5

Fees 167,5 450,0 725,0 925,0 1.125,0

Consultancy / Training 0,0 175,0 155,0 145,0 220,0

Total 167,5 625,0 880,0 1.070,0 1.345,0

We estimate, that the network will grow from 25 members at the end of the first operating year up to more than 100 in the fifth year of operation.

D.6.4 Profit / Loss Analysis The profits are calculated including depreciations but before taxes on income and earnings. Profits (in

TEURO)

Y1 Y2 Y3 Y4 Y5

Revenues 167,5 625,0 880,0 1.070,0 1.345,0

Costs 576,8 797,7 794,9 784,1 823,4

Revenues in 5 Years

0,0200,0400,0600,0800,0

1.000,01.200,01.400,01.600,0

Y1 Y2 Y3 Y4 Y5

1000

EU

RO

Fees Consultancy / Training Total


Profit -409,3 -172,7 85,1 285,9 521,6

The profit / loss analysis shows that break-even will have been achieved at the beginning of the third year of operation. The VTA network will then have reached about 65 members.

D.6.5 Cash Flow The following table shows the cumulated internal cashflow at the end of each of the 5 years previewed and the resulting external funding needed (for the details refer to the the complete overview in Annex 3): Cashflow (in

TEURO)

Y1 Y2 Y3 Y4 Y5

Cumulated internal cashflow -588,5 -981,9 -749,4 -398,0 144,8

External funding 651,0 1.065,0 885,0 570,0 50,0

It has to be considered, that the main cashflow of a year is already generated during the first quarter, because then the annual fees of the members of the network are due.

Profit / Loss in 5 Years

-500,0

0,0

500,0

1.000,0

1.500,0

Y1 Y2 Y3 Y4 Y5

1000

EU

RO

Revenues Costs Profit


As shown above the internal cashflow is growing continously starting with the third year of operation due to the increasing customer base, allowing to pay back most of the external funding until the end of the fifth year.