STEM help / Training

2.3.17.1 Identifying the elements of a STEM business model

The challenge in creating a model template is that different technologies, markets or contexts require different detail. STEM allows you to create service and resource elements to suit, which then constitute your template for what detail is required. The icon menus make it fairly clear what the core inputs should be.

For a service, you need subscriber numbers, split by service type and segment (e.g., business/residential and POTS/ADSL), and then average traffic numbers. But one can always estimate the traffic numbers or adjust them in a workshop, whereas a client will generally have a good handle on subscribers. And you need tariff numbers; at the simplest, an ARPU; more generally, connection, rental and usage tariffs.

For a resource, you need its capacity (and units), deployment data (sites), and basic cost data, i.e., unit capital cost and maintenance cost. You can estimate the physical lifetime.

These will be sufficient to get a simple demo working. Refinements such as cost trends can be added later. In fact, most of the above data can be guess-timated and then refined in person with or by the client; the most important part to get right in advance is the structure, which is highly dependent on the context. The challenge is to be able figure this out!

For now, this means getting a clear outline of the intended business structure, and then bouncing this off an experienced modeller who can translate this into the service/resource structure required to define the necessary inputs. So you should consider:

  • the mix of segments and services considered
  • a list of significant cost items
  • the drivers to dimension the cost items (i.e., how many cost items does the model need to ‘buy’ every year to provision the service to end-users?).

This is precisely the process a consultant goes through to work with a client to identify the appropriate structure of a STEM model, so the more you can practise these steps, the faster you will learn to be self-sufficient. It is the association of this magic with the software (i.e., the ‘established STEM modelling process’) which makes STEM successful.

 

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