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4. Methodology
The main aim of this study is to determine how Beatrixoord can sustainably share its knowledge and expertise to a large group of potential users outside the center. In order to provide an answer to that question two important underlying goals must be met. First, identifying what existing knowledge and expertise is available that can be shared and what new knowledge and expertise needs to be generated, made explicit, transferable and tradeable. Second, to set up a business case and explain how knowledge and expertise can be shared and sold outside the center. In meeting the first underlying goal that supports achievement of the main goal the aforementioned literature was used. In meeting the second goal underlying goal that supports the achievement of the main goal the aforementioned literature in combination with input from practice was used. The main methodology used in this study is the process of New Product Development (NPD) of Crawford and Di Benedetto (2008), which was previously discussed in section 2.1.1. The39 6.3 Business Impacts
Target group and market size Children with DCD, obesity, cancer and cerebral palsy (CP) are chosen as target group for the interactive platform. The interactive platform business case of ‘Funky Fit’ states that these children are expected to benefit from an interactive platform to increase physical activity and to play independently (Nigten et al., 2016). Based on historical information of the ‘Funky Fit’ business case, it is assumed that approximately 380,000 children in the Netherlands were diagnosed with DCD, obesity, cancer or CP in 2015. The assumption of this business case is that Beatrixoord can serve 0,10% of this market in year 1, 0,15% in year 2, 0,225% in year 3 and 0,337% in year 4. The assumption that 0,10% of the market can be served in the first year is based on historical information of the ‘Funky Fit’ business case. The assumed progress to serve 0,15%, 0,225% and 0,337% of the market in the following three years is based on scientific goal setting. Scientific goal setting states that a realistically achievable goal is no more than 50% more of what has been achieved the year before (Chek, 2015). Based on the previous figures, table 5 below shows the market size in numbers of children served per year. Year 1 2 3 4 Market Size 380 570 855 1283 Table 5. Market size projection (in number of children served) Cost model The cost model for the interactive platform is based on cost line items that fall under cost categories and cost resources. The cost categories for the interactive platform are: acquisition, operation, and growth & change. The corresponding cost resources for these cost categories are: software, personnel, and networking & communication (NW & Comm). An overview of the cost items that belong in the business case are shown in table 6. Items between parentheses represent optional cost line items. The next paragraphs elaborate on the content and pricing of cost items. Table 6. Cost model Software Personnel NW & Comm (Extra promotion campaign) ● Purchase Community Software ● Hiring of training developer ● Hiring of coaches by Beatrixoord ●Marketing campaign (Extra paid services) (T.b.d)
Acquisition Operation Growth & Change Interactive Platform Life Cycle
40 Software The costs for software pertains to the purchase costs of community software. Community software is software designed for the purpose of sharing knowledge and facilitating interaction (joitskehulschebosch.nl). Sharing of knowledge and facilitating interaction between a coach at Beatrixoord and the client is a key aspect of the interactive platform. Community software helps facilitate this interaction and is therefore seen as an essential component for the development of the interactive platform. it is suggested to make use of Icohere community software (Icohere.com). Reasons and benefits are mentioned in table 7. Table 7. Reasons and benefit(s) for choosing Icohere community software Reason Benefit(s) 1 Modes of professional development and collaboration are brought into a single delivery platform Having an unified system for online courses and communities prevents costs for development- and integration of multiple systems. 2 Options cover content of the
interactive platform Options such as back-to-back webinars with audio/video streaming guarantee the feasibility of the development of the content of the interactive platform. 3 Web based Because community software is web based the components of the interactive platform are easily accessible for end users in both the home- and school environment. 4 Hosting and managing of
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of this 15% discount. These costs do not include the earlier mentioned discount possibility of €4,561,- as a onetime offer.
Payment method Enabled users per year Costs per year (calculation) Total payment Yearly payment Year 1: 380 Year 1: €20,520,- €102,908,-
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Interactive platform
component(s) Cash inflow Games (and access to
the online forum) €34,- per sold unit per child Apps (and access to
46
Scenario Cash Flow Projections
Yr 1 Yr 2 Yr 3 Yr 4 Total Gains Games Apps Coaching and monitoring at schools E-coaching and online forum
Yr 1 Yr 2 Yr 3 Yr 4 Total Expenses Community software Marketing cost Training developer Coaches for monitoring at schools Coaches for weekly coaching calls of E-coaching program
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Year Units 1 2 3 4 Total
Clients # 380 570 855 1283 Game price € 34 ….. ….. ….. ….. GAME REVENUES € 12.920 € 19.380 € 29.070 € 43.622 € 104.992 Clients # 380 570 855 1283 App price € 20 ….. ….. ….. ….. APP REVENUES € 7.600 € 11.400 € 17.100 € 25.660 € 61.760 Clients # 380 570 855 1283
Price coaching and monitoring at school per child per hour € 87,5 ….. ….. ….. …..
Price coaching and monitoring at school for 6 hours per child over a 1-year period € 525,0
COACHING AND MONITORING REVENUES PER CHILD (6 HOURS PER CHILD) € 199.500 € 299.250 € 448.875 € 673.575 € 1.621.200
Clients # 380 570 855 1283
Price access E-coaching and online forum € 99 ….. ….. ….. …..
E-COACHING AND ACCESS ONLINE FORUM REVENUES € 37.620 € 56.430 € 84.645 € 127.017 € 305.712
TOTAL REVENUES € 257.640 € 386.460 € 579.690 € 869.874 € 2.093.664
Software capex* - € 67.777 € 0 € 0 € 0
TOTAL CAPEX - € 67.777 € 0 € 0 € 0 € 67.777
Costs community software opex** - € 29.393 € 29.393
Costs salary training developer opex - € 50.000 € 50.000 € 50.000 € 50.000 € 200.000
SUBTOTAL OPEX € 50.000 € 50.000 € 50.000 € 79.393 € 229.393
Clients # 380 570 855 1283
Cost salary coaches Beatrixoord per hour € 40,93 ….. ….. ….. …..
Costs salary coaches Beatrixoord for communicationg and monitoring at schools (6 hrs/client) € 245,58 ….. ….. ….. …..
Costs salary coaches Beatrixoord for communicating and monitoring at schools (6 hrs/client) opex € 93.320 € 139.981 € 209.971 € 315.079 € 758.351 Cost salary coaches for coaching at weekly coaching calls (52 hours/ year) opex*** € 2.128 € 2.128 € 2.128 € 2.128 € 8.513
Annual marketing costs opex € 7.500 € 9.000 € 10.000 € 10.000 € 36.500
SUBTOTAL OPEX € 102.949 € 151.109 € 222.099 € 327.208 € 803.364
TOTAL OPEX € 152.949 € 201.109 € 272.099 € 406.601 € 1.032.757
CASH-IN € 257.640 € 386.460 € 579.690 € 869.874 € 2.093.664
TECHNICAL COSTS € 220.726 € 201.109 € 272.099 € 406.601 € 1.100.534
NET CASHFLOW € 36.914 € 185.351 € 307.591 € 463.274 € 993.130
* Expenditure software license for 3 years ** Renewal annual software license
*** One coach and one hour per week for all participants of the weekly coaching call
48 With the financial model (table 11) the maximum company revenues are calculated (table 13).The calculation of the maximum company revenues are based on historical information used in the interactive platform business case of ‘Funky Fit’ (Nigten et al., 2016). Company revenues 1283 clients (Yr 1-4) €993,130,- Product contribution 40% €397,252,- Overhead 20% €198,626,- Cost of sales 10% €99,313,- Support 5% €49,657,- Marketing 20% €198,626,- Max. Production 5% €49,657,- Table 13. Company revenues
Table 14 shows the maximum development costs of the interactive platform. The calculation for the maximum development costs is based on historical information of the interactive platform business case study of ‘Funky Fit’ (Nigten et al., 2016). Product contribution 1283 clients (Y1-4) €397,252,- Profit 20% €79,450,- Development 25% €99,313,- Ramp up 35% €139,038,- Launch 20% €79,450,- Table 14. Product contribution Because Beatrixoord their main goal is not to make profit, any profit can be invested to improve the interactive platform and to expand it with different products. 6.4 Sensitivity, Scenarios, Risks, and Contingencies 6.4.1 Sensitivity analysis Sensitivity analysis is used to shows what happens if assumptions or input factors change. Four scenarios have been applied: a sales forecast of 10% higher, a sales forecast of 20% higher, a sales forecast of 10% lower and a sales forecast of 20% lower. Table 15. Sensitivity analysis for sales forecast 10% higher and sales forecast 20% higher
Current Forecast Sales Forecast 10% Higher Sales Forecast 20% Higher
Gains Year 1 Year 2 Year 3 Year 4 Year 1 Year 2 Year 3 Year 4 Year 1 Year 2 Year 3 Year 4
49 With a sales forecast of 10% and/or 20% higher, the profit would still be made in year 1, as the current forecast states. Table 16. Sensitivity analysis for sales forecast 10% lower and sales forecast 20% lower With a sales forecast of 10% the profit would still be made in year 1. With a sales forecast of 20% lower, the profit would be made in year 2. 6.4.2 Scenario analysis According to Tourki et al. (2013), scenario analysis is described as a set of possible eventualities describing what the world may look like over a certain time period. Ultimately, the goal of scenario analysis is to define the value of the service provided by one or more parties and the value of the service received by these parties in a specific scenario. It is also important to define any possible problems for end users and/or stakeholders in this scenario. This information helps Beatrixoord to understand what events may unfold if it invests in the interactive platform and what action it can take (if any) to counteract any negative events. In this business case it is assumed that Beatrixoord can afford the development of the interactive platform if the budget of Beatrixoord available for direct purchase is €250.000,-. However, there are also four alternative scenarios imaginable regarding the delivery of payment for the development of the interactive platform. These four different scenarios are shown in table 17. Scenario Description 1 As part of basic and complementary healthcare insurance, the health insurance company will help deliver the payment for the coach of Beatrixoord who performs coaching and monitoring at schools. In addition, the health insurance company also will help deliver the payment for the product trainer. 2 The municipality where Beatrixoord is located will help deliver the payment for the product trainer in the form of a subsidy. 3 An investment organization will help to deliver payment for the interactive platform. 4 As part of basic and complementary healthcare insurance, the health insurance company will help deliver the payment for the coach of Beatrixoord who performs coaching and monitoring at schools. In addition, the health insurance company also will help deliver the payment for community software. Table 17. Alternative scenarios for the delivery of payment for the development of the interactive platform
Current Forecast Sales Forecast 10% Lower Sales Forecast 20% Lower
Gains Year 1 Year 2 Year 3 Year 4 Year 1 Year 2 Year 3 Year 4 Year 1 Year 2 Year 3 Year 4
59 Regarding the first sub research question: Who are the potential users?, the answer is healthcare professionals (in and) outside Beatrixoord, the health insurer, the healthcare industry, the government and healthcare insurance companies. Healthcare professionals benefit from quick knowledge and/or expertise. The health insurer benefits from increased knowledge and power. The healthcare industry can use the knowledge to create value in the market. Knowledge
type Actor Context Solution offered by the platform
Benefit(s) Strategy
Experience/
Treatment Healthcare professional Requiring external information and communication with professional colleagues to make medical decisions (Sim et al., 2011) Forum Quick & time efficient communication Visibility Incident - - - - - Medical Beatrixoord Health insurer Explaining in-take procedure for assessment of DCD Q&A in-take procedure for assessment of DCD FAQ Forum Quick & time efficient communication Efficiency Scientific Healthcare
