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  • 1. Background document: Trans-national scale project and spin-off company based upon the results of Local Development Cooperation Actions Enabled by Semantic Technology Maria.GERONYMAKI@ec.europa.euFP6-2004-IST-4-26919]The proposal concerns two major action plans capitalising upon the results of the FP6-2004-IST-4-26919 - Local Development Cooperation Actions Enabled by Semantic Technology - SpecificTargeted Research Project Information Society Technologies:The industrialisation of LD-CAST technology and consolidation of adhering Private and PublicInstitutions both as service provuiders and as service distruibutors i.e. through a 2009 - C.I.P. or otheradequate EU programme available during 2009 - funding needed < 2.500.000,00 €.The start-up of a spin-off company to exploit and manage the Business model proposed to the EUCommission in the conclusive phases of the 6th FP in July 2008 - funding needed > 2.500.000,00 € tobe possibly financed via EIF venture capital.The LD-CAST agency main value proposition would be the offering of day-to-day services enhancingand catalyzing cross-border business ventures. These services are mostly supporting businesses in
  • 2. completing bureaucratic procedures quickly and accurately (i.e. obtaining documents certifying thefinancial, legal and technical-quality skills).The predominant VALUE offered in the LD-CAST scenario is:saving of time and money (i.e. a service taking now days to perform, may be performed by LD-CASTwithin minutes)trustworthiness of services.What is more, LD-CAST will offer one stop access to a wide variety of services coming also from alarge network of service providers and different countries. Thus, an entrepreneur may concentrate onbusiness critical issues rather than spending time on lengthy bureaucratic procedures. Startup service offering (funding from EU C.I.P 09 or other similar program)In the startup phase (2,5mio € funding i.e. from C.I.P.) where service suppliers are increased jointlywith distribution channels and the technology refined, the first release of the LD-CAST system willallow the execution of a set of services (the so called “startup service offering”) chosen among a largeroffer responding directly to the common requirements of EU mSMEs.During the requirement analysis phase, the supply specialty sub-contract has been chosen among theones considered more suitable for the needs of LD-CAST as the most used, the most widespread andflexible contract form in EU business environment.Although the supply specialty sub-contract does not exhaustively cover all possible businessrelationships and services used by European enterprises (as for example those related to e-Procurement), it provides a typical scenario for Business Episodes in the LD-CAST scope, including aheterogeneous set of services to be provided as part of a complete process or as stand alone offering.Apart from satisfying specific market needs, these services have also been selected due to their extremeflexibility that allows for the future implementation of further well-connected business episodes. Forexample, the domain of international trading partnership for a company residing in Italy comprises allthose contractual relationships in which a sourcing need is satisfied cross-nationally in a value chainfinalised in the finished or semi-finished products.The initial offering must be turned into concrete products/services that represent this giant stepforward; a disruption from the way the same services are today accessed or offered. At the currentstage, the market’s trends have underlined the increasing transnational trade exchanges, the increasingneed for transnational trust networks and the increasing need for fast and cheap access to businessservices. To respond to these market needs, the LD-CAST value proposition has been focused on thefollowing services:Trustworthy Partner searchCompany legal verificationCompany fiscal verificationTechnical and quality standard verificationCompany/Branch registration abroad
  • 3. General Business environment informationFiscal informationLegal informationTechnical and quality standard informationSocial security informationLogistic informationMarket evaluationIt should be noted that the aforementioned set of offered services constitutes the superset of theoffering; some of these services will not be available in all countries as their implementation isprohibited due to different regulatory frameworks.The LD-CAST main value proposition is the offering of day-to-day services enhancing and catalyzingcross-border business ventures. These services are mostly supporting businesses in completingbureaucratic procedures quickly and accurately (i.e. obtaining documents certifying the financial, legaland technical-quality skills).The predominant VALUE offered in the LD-CAST scenario is:saving of time and money (i.e. a service taking now days to perform, may be performed by LD-CASTwithin minutes)trustworthiness of services.What is more, LD-CAST will offer one stop access to a wide variety of services coming also from alarge network of service providers and different countries. Thus, an entrepreneur may concentrate onbusiness critical issues rather than spending time on lengthy bureaucratic procedures. Future service offering (Post start-up; funding from E.I.F. or other public-private risk capital)The Chambers of Commerce participating in LD-CAST shall be able to implement more services in thefuture thanks to the state of the art LD-CAST platform. The nature and number of these services willdepend on LD-CAST development during the expansion phase at startup. The new institutions privateand pubblic joinging the group shall carry an endowment of their own services and distributivecapacity. Possible future service implementations may include either some of the initial services thatwere not originally implemented in some countries or completely new services, such as the following:Business Start-up assistance.Training.Information on funds, financing and incentives.New Business services integration for future proofing. Multilinguism services
  • 4. The LD-CAST Business model has been adapted on Osterwalder model, which synthesises thedifferent conceptualizations into a single reference model based on the similarities of a large range ofmodels.From the financial point of view, the revenue model has been taken into account by looking atdifferences between cost structures due for example to the maturity level of technologies supportingservices and to the effectiveness and efficiency of existing processes.In the next picture the four pillars and the nine building blocks of the BMO are depicted together with aset of numbers representing the order with which data have been collected and analysed during the LD-CAST project.For exploiting innovative technology in order to extract value, the appropriate business model needs tobe defined. The LD-CAST Business Model addresses the following four main areas:Value Proposition: what are the products and which is the value that LD-CAST proposes to offer tothe market;Customer Interface: who LD-CAST’s target customers are, how it plans to deliver them products andservices, and how it intends to build a strong relationship with them;Infrastructure management: how will LD-CAST carry out infrastructural and logical issueseffectively, with whom and what kind of network enterprise/bodies will it perform business;Financial aspects: what is the revenue model, the cost structure and the business model’ssustainability.
  • 5. Business Model Architecture Target Customer segmentThe customer relationship constitutes the pillar of this business model. Thus, a conceptual approach tocustomer relationship is needed to understand the essence and the relation between the LD-CAST valueproposition, the target customer segments and the distribution channels. Furthermore, the conceptualapproach will allow the determination of customer segmentation. Effective customer segmentation willenable the LD-CAST consortium allocate investment resources to target customers that will be mostattracted by its value proposition.In overall, the following target customer segments for LD-CAST have been identified:Individual businesses (no matter if already exporting or first time exporter);Business consultants;Private business service providers;Chambers of commerce & professional associations;Online business information Portals/Vortals;Investors and companies interested to make joint ventures;Public Institutions (looking for suppliers);Public business service providers;Local/National development agencies (and in general governmental bodies like Foreign Trade Centres, Euro Info Centres,and the Chambers of Commerce abroad);Other NGOs;Others. Distribution ChannelThe distribution channel is the connection between the LD-CAST value proposition and its targetcustomers, and could be also the future promotion channels. The nature of distribution channelsdepends on the nature of value proposition and target customers, and the proliferation of a stream ofnew channels allows new distribution hypotheses. This magnitude of change demands a strategicperspective that views channel decision as choices from a continually changing array of alternatives forachieving market converge and competitive advantages [RD-09].LD-CAST project will utilise the following distribution and promotion channels for reaching targetcustomers:Web sites and portals:
  • 6. The web sites that will be utilized for LD-CAST distribution and promotion will be the LD-CASTsystem website, LD-CAST partners’ websites and especially CCs websites, the online servicessyndication and other Professional Association Websites throughout Europe. In addition, a special webpage will be added on all the partners websites. For instance, ICI’s web site will be allocated to LD-CAST in the Romanian language; this is considered an important initiative as this web site is visited bypotential service providers that can benefit from ICIs training and assistance in LD-CAST use (samestrategy is to be adopted by other partner as LSCC, BCCI, Retecamere and technology partnersinvolved in supplying services to public (or even private) SPs.Several other distribution channels will be activated according to ROI analysis to be conducted in thestartup phase:The first most obvious concerns the aforementioned direct Selling channel through the LD-CAST.orgsystem;CCs which have a widespread geographical distribution are also an important channel to vehiculateoffline information regarding the ‘LD-CAST FACILITY’, ease of use, low cost offering and other.This is important, as mentioned in the business plan for incentivating the adoption by local agencies(starting with CCs but not limited to them in so far as a number of local development agencies exist inthe 4 countries involved);Agents, who typically use or may even sell direct on behalf of LD-CAST as for the case of accountantsand several other business consultant segments;Though the syndicated offering of services contemplated in the business plan several third partiesonline distributors (also identifiable as wholesaler) will help increase sales volumes.The main aim of the LD-CAST distribution strategy is to move the service as close as possible to theservice buyer’s decision making point. This is why both direct and indirect channels may be used anddistribution will take place at the desk of a local CC as well as through direct (or indirect in case ofthird party portals and vosrtals exposing its services) access to the platform. Considering also theopportunity after startup year to sell print or electronic directories of aggregates of statistical dataissuied from ld-cast platform usage as contemplated in the business plan, print books distribution maybe necessary.Partner NetworkIn the context of business services (supplied through LD-CAST by CCs partners), Institutions and otherActors (as for instance National Service Providers) hold a very high rank as direct providers of mostpart of Legal and Fiscal verification services in Bulgaria, Poland and Romania.Establishing business alliances with National Courts and other National Institutions is thereforeessential to enable on-line operation, and to deliver a cheap and quick offer to customers.Lobbying and networking require however differentiated strategies by member CCs, to be devisedthrough a thought-out and thorough analysis of potential partners. The analysis results lead to set up adetailed development plan based on very well-motivated benefits coming from joining the LD-CASTproject, to be presented potential partners and agreed upon.
  • 7. The plan here proposed takes into account two different categories of partners: Local CCs (as potentialService Providers and Local Agencies) and other Institutions or National SPs.In the medium-long period, the involvement of Chambers of Commerce and other actors, such asPublic Institutions and Governmental bodies (i.e. local councils, local health authority etc.) as ServiceProvider aimed at providing new o improved services can be divided in three phases:Development Plan The development plan to be released to other SPs presents the description of strategies to attract them (such as large customer segment, brand name, technology LD-CAST offers or EU Market analysis). The actions may also include a Business Plan describing in details benefits (as technologic excellence in LD-CAST etc.), potential revenues, limited risks etc. The plan will be presented during meeting and events to be scheduled;Agreement The agreement phase involves the arrangement of an informal involvement based on opportunity share for all partners. In the last stages of the project informal arrangement might also be formalized as official commitment;Service provision The service provision phase defines the list of actions required to start supplying services through LD-CAST, and the resources (material, immaterial and human) needed for the newly joined partner CC. TAB. 20 - TOTAL COSTS AND REVENUE