There are seven types of element within a STEM model which can represent aspects of a network, plus three additional types which are used to capture hierarchies and scenarios within a model. The three key elements are Services, Functions, and Resources. These key concepts and their connection are illustrated in
the figure below.
Services offered by the operator, such as local PSTN calls, international calls, leased circuits, X.25 or CLASS services are each tariffed and the demand from customers specified. To meet that demand, the operator must provide a range of Resources which are categorised by the Function they perform. Functions might include local access links, local exchanges, transmission circuits and trunk switches; or corporate HQ, directory enquiries and telephone operators.
For each Function a number of alternative Resources can be specified. For example:
- an access link could be implemented by copper or fibre
- a local switch might be analogue or digital
- directory enquiries could be fully staffed or semi-automated.
The key elements of a STEM model
Because networks are geographically spread, STEM models the deployment of Resources across a number of sites according to a user-selectable distribution.
The other seven optional elements of a STEM model are Market Segments, Locations, Transformations, Cost Indices, Collections, Dimensions and Variants. A brief introduction to the characteristics of each type of element is provided below.
Services 
Services represent the services offered by operators to their customers, such as ISDN, voice mail, X.25 or international calls. The demand for each service is specified in terms of connections, the traffic volume and distibution, and the busy-hour traffic. The relationship between Service demand and the resources which the operator must install to provide that Service is described by the Requirements. For example, for each ISDN connection, a line card is required; for every 100 minutes of total traffic, 2 minutes will need to be diverted to a voice mail facility; for every 20 Erlangs of international call traffic, 28 channels will be required in the international switch.
Tariffs are specified for each Service, which STEM uses to calculate Service revenues – although this is not necessary when developing pure cost models. A Service can have a Connection, Rental and a Usage Tariff. A Churn Tariff can also be specified if required.
Resources 
Resources represent particular types of equipment (e.g., a telephone handset, an ATM switch or a vehicle) or other sources of cost in the network to be modelled.
A Resource is described in terms of its physical characteristics and costs including Physical Lifetime, Capacity, and the various costs of ownership or use: Capital Cost and Maintenance Cost, for example.
The demands for the Service are met by the Resources within the model. How Resources are installed in the model each year to meet demand can be specified in a variety of ways depending on the deployment demands and the physical characteristics of the Resource. STEM uses this information to calculate the total number of units of each type of Resource required in each year, given the demand, and to calculate the cost of installing and running them year on year (or by quarter, or month).
Functions 
Functions represent groups of Resources which perform a particular role within the model – this might be a network function, such as a local switch, or an organisational function, such as a personnel department. Functions in a cost model, for example, might be terminals, network terminations, access links, local exchanges and the transit network.
By grouping similar Resources together and specifying how demand utilises those Resources over time, STEM can model the dynamic process of replacing one Resource with another, thereby representing the replacement of old technology with more modern systems.
Market Segments 
Market Segments represent the different groups of customers that may use the Services within the model. Demand for a Service can be represented by the level of penetration of the Service into the size of a Market Segment.
It is possible to create new Services for a Market Segment, edit and compare data for the Services associated with that segment, and view results aggregated over that segment.
Locations 
Locations represent the logical places at which network Resources may be placed, e.g., exchange nodes, base station sites.
Each Location has a number of physical sites associated with it which may increase (or decrease) with time, as in the roll-out of a new network. The deployment of a Resource can be linked to a Location, in which case the Resource is distributed across the sites associated with that particular Location.
Transformations 
Transformations are used to represent special relationships between calculated quantities in the model. They can, for example, be used to relate the required capacity of one Resource to the installed capacity of another, potentially in a non-linear way. Typically, this is used to determine the number of racks or cooling plants that are required to support a given number of line cards.
They can also be used to relate the use of a Service to the installed capacity of a Resource – in this way it is possible to model interconnect arrangements by relating demand for one Service, such as local loop interconnect, to demand for mobile-fixed cellular calls.
Another important type of transformation is the Erlang B Formula, which is used to convert the busy-hour traffic demand of a Service into the Resource capacity which needs to be installed.
Cost Indices 
Cost Indices represent the elements which make up the cost of purchasing and installing Resources (Capital Cost). The Cost Indices defined for the cost model of a local access network, for example, might include those for basic components of telecommunications equipment such as electronics, copper wire and optical fibre, and infrastructure-related items such as ducts, salaries and vehicle costs.
For each Resource the Capital Cost can be specified in terms of the proportion of these Cost Indices which make up its total cost and STEM then uses this information to estimate the future Capital Cost.
For each Cost Index a Cost Trend is specified, describing the future evolution of that element of cost relative to current prices.
Collections 
Collections allow you to group together a number of elements of any type. If the elements in a Collection are all of the same type, the corresponding input data can be compared directly from the icon for the Collection. Aggregate results for the Collection can be selected alongside results for individual elements of the same type.
Dimensions 
Dimensions are used in conjunction with Variants in order to define scenarios within a STEM model. A Dimension identifies up to 120 separate inputs in a model as parameters for those scenarios.
Variants 
Variants are associated with a particular Dimension: each Variant provides alternative time-series values for the parameters identified by that Dimension. A scenario is then defined by the choice of one Variant for each Dimension.
Templates
STEM’s template replication
concept enables you to take a fragment of model structure and automatically generate multiple named copies, specifying in detail only how the respective copies differ. The Template element first identifies which elements comprise the template for replication, together with the key differentiating parameters. Then the names of separate copies are specified as Variant elements, together with the corresponding key values for each copy. STEM then automatically generates an expanded model based upon this prescription in a process that is concise and easy to maintain.
Sensitivities
Sensitivity elements allow you to carry out independent sensitivity analyses of various parameters with minimum modelling overheads. You simply identify a number of parameters which STEM then varies up and down by a certain number of steps, independently of each other, and in turn.
Debt Facilities
Debt Facility elements allow you to create a detailed model of the funding requirements for a network. You can define individual debt facilities with separate terms and schedules.