STEM newsletter

STEM User Group Meeting 2007 proceedings

30 October 2007

The 2007 STEM User Group Meeting was a learning opportunity and forum for excellence in business modelling, focused around applications and features of the STEM business-modelling software for networks. This informal gathering at Corpus Christi College attracted delegates from ADC Services, BT, Juniper Networks, Motorola, Nokia Siemens, T-Mobile, Telkom SA, UK Telecoms Academy, Vodafone and the Welsh Assembly Government.

The event included a showcase of our latest WiMAX-DSL training material, a popular session on the latest development ideas for the future STEM 7.2 and 8.0 versions, as well as a number of guest presentations, described below. The event was dominated by an interactive modelling exercise over four sessions where two teams worked in parallel to create business models from a blank sheet in an accelerated process facilitated by our expert practitioners and made possible by STEM’s automated logic and consistency.

A meeting of minds

The event kicked off with a presentation of a new STEM training programme based around a comparison of DSL and WiMAX as competing technologies for the provision of broadband to a rural area. A deliberately simplified model presents all the most important telecoms market and network dimensioning concepts in one screen and a series of related exercises. A menu of advanced topics is then available for the user to question the robustness of certain assumptions and think through how to design better solutions.

This presentation was intended to set the scene for newcomers to the event before hearing from several guest presenters, mostly existing STEM users.

David Mellor, Chairman of the United Kingdom Telecoms Academy, gave an introduction to the work of the Academy, developing education programmes in telecoms in conjunction with the ITU and other international organisations.

David McGrath, Motorola, talked about the work of his team and some general principles and practical examples about using STEM and other tools in strategic thinking.

Adriaan Steenberg, Telkom South Africa, discussed some ways to reduce the complexity inherent in modelling the growth of a large SDH network.

Manfred Illenberger, Nokia Siemens Networks, presented some work based on the latest STEM version 7.1, exploring sensitivities around NPV break-even, and demonstrating how to use this technique to locate an optimal solution.

Two of these guest presentations touched on the terminology and techniques associated with modelling subscriber churn, which then dovetailed neatly with some of the content in the separate in-house session on development ideas for the future STEM 7.2 and 8.0 versions (as outlined in the articles STEM 7.2 development shortlist and Looking ahead to STEM 8.0 from the July 2007 newsletter). In particular, we looked at dynamic modelling and an annual growth model (proposed for inclusion in STEM 8.0) which could be used to model subscriber churn and additions directly.

Various annual-growth models

Business modelling by storm

The interactive modelling exercise was based around two optional topics which were presented in the kick-off session:

Online conferencing: the market and technical design for a desktop sharing service, the necessary network infrastucture, and the associated revenues and costs.

Car hire: a look at some revolutionary approaches to Internet-based low-cost vehicle rentals. For both topics, delegates were provided with headlines of the business strategy and reference data to help fill in the specifics of a model and ensure consistency between approaches.

Online conferencing architecture

The team split was conceived as ‘newcomers’ versus ‘ old hands’, but in practice the division came down to those seeking to develop their general business-modelling skills and those wanting to learn from how others ‘do it in STEM’. The generalists tackled the car-hire topic (as something fresh) while the STEM-focused team modelled online conferencing.

In the second session, the inevitable debate about how to approach certain aspects of these businesses did not prevent either team from getting a model off the ground, and in the third session and the timed half-an-hour in the last session, both teams worked magic to come up with results directly addressing the business issues posed at the outset.

Due to the constraints of time, each team was given precisely 7.5 minutes to present their approach and results. On car hire, we were shown a tornado chart comparing various sensitivites and the significance of the residual value of a hire vehicle. For online conferencing, we were shown snapshot charts comparing outcomes across different scenarios, and another tornado chart. In the end, the generalists were awarded the nominal confectionery for combining two new features of STEM 7.1 on a single chart!

Sensitivity analysis for car-hire business model

Overall the exercise was considered “thoroughly enjoyable”, “very, very valuable”, and “such a valuable experience”. On that basis we expect to run a similar event next year, and your suggestions for possible business topics are most welcome.

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