Archive | October 19, 2014

Fingerprints; safe feature or actually quite risky?

Fingerprints have been used in passports for years, saved on paper. Mostly used to check for authenticity when leaving the border. But with the digital transformation of the society, so have fingerprints. Using your fingerprint to identify yourself is very easy, and it offers quit some benefits compared to passwords. It is impossible to lose your fingerprint, you can’t forget it. There is no chance on ‘bruteforcing’ your fingerprint by trying different solutions, and where passwords are often obtained by social hacking or (finding a password by studying somebody’s history) or actual sharing, fingerprints have none of those weaknesses.

Fingerprint’s have been used for years in personal items. One of those is the Biometric Safe of Barska. Sometimes a key just isn’t safe enough. Barska’s safe allows you to store guns and other items that you would not want your children to have access to. It’s technology is rather simple and offers a biometric scanner that remembers your fingerprint. The safe locks up after reading it and won’t open again until you put your finger back on the scanner.

With modern advancement, big companies have also seen the fun in fingerprints and are implementing it in different, more technological ways. Apple has introduced its so called  ‘breakthrough Touch ID’. The technology allows to unlock your phone with a simple fingerprint. The opportunities don’t stop there. Your fingerprint also allows you to approve purchases from iBooks, the app Store and iTunes after you have given permission to buy with your fingerprint. With the recent introduction of Apple Pay, the iPhone also allows you to pay in thousands of physical stores and even more online sites and apps with just your fingerprint.

Just two days ago Mastercard has announced that the company has started an experiment with a fingerprint scanner in the creditcard. The card has a specialized small scanner and stores the information only on the card itself. The creditcard needs a battery to function and users will need to charge it to function. Mastercard stated that future iterations of the card will be more efficient and can be charged by just sweeping it through payment terminals.

But not only companies, also governments are catching up to the digital possibilities of fingerprints. The European Union is slowly putting up regulations among its members to have fingerprints in passports mandatory. The fingerprints will be saved in a huge digital databank. At the moment, the Dutch government was still able to block this and a majority of the Dutch politicians are against fingerprints in passports. The politicians still think fingerprints aren’t the safest way of identifications. Are these concerns justified?

Researches have looked at different ways of attacking the fingerprint scanners and found at least 6 legitimate attacks to beat the system:
1. Use the finger itself. The researchers found that one of the highest risk is still being forced to press your own alive finger against the scanner. It is easier for criminals to use your finger than to find out your password. As advice they give to always combine fingerprints with passwords.
2. Use someone ells his finger. The research showed that most fingerprint scanners work with a system of categorizing the user with loops, whorls or arches. If the attacker knows which category the user belongs to, he might be able to find a person within the same category.
3. Use a severed finger. This is almost a Hollywood movie plot, but the researchers state this a option that could be used frequently in high level crime. Sophisticated systems can counter this attack by putting in a extra check to detect if the finger is actually alive.
4. Use a genetic clone. Again, the risk of this happening seems farfetched. The researchers state that sometimes twins can have fingerprints that look alike so much, they fool the system. Fingerprints aren’t genetically determined but is a pattern of the nerves growing into your skin. Still, some twins seem to have almost identical prints. A really precise system however, can still find the difference.
5. Use an artificial fingerprint. The biggest risk of all, use a fake finger with the real subjects fingerprint. This fingerprint can either be obtained physically or from a (hacked) database. Researchers have been successful in making a fake finger that could trick scanners in thinking it was the finger of the original user.
6. Other ways. Fingerprint systems are just systems too. Some attackers may use strange errors to fool the system into believing something that didn’t happen. Reports have been made that exposing sensors to extreme lights, heat or cold, different humidity’s or vibrating the scanner can cause it to malfunction and give access to the hackers.

Sources:

http://www.barska.com/Products-Biometric_Safe.html

http://lucidfood.com/2014/01/09/passport-iran-struggled-get-iranian-citizenship/

http://cryptome.info/0001/gummy/gummy.htm

https://www.apple.com/iphone-6/touch-id/

http://tweakers.net/nieuws/99115/mastercard-experimenteert-met-vingerafdruklezer-in-creditcard.html

http://www.privacybarometer.nl/maatregel/62/ID-kaart_zonder_vingerafdrukken

The Ends of Internet

Boris Beaude published a book called in French “les fins d’internet” meaning, the ends of internet. He argues that the internet is now at a turning point and that things need to change in order to keep the internet we know alive.

The first point the author makes is Internet is now completely integrated in our societies, there are now real political challenges. The first group of stakeholders in this challenge are states, they want to control the internet, a space where laws and regulations are today not respected. This means apply country specific laws on the web, such as copyright laws, leading to a fragmentation of the internet and the creation of borders where they do not exist. The second group is the big internet corporations such as Google and Facebook. They took profit of the internet and more specifically of its global and network characteristics in order to privatise all social relations. They have two visions of the web facing each other, one being national separation and the other private centralization.

Today internet is zone where billions of people interact with little or no regulation, this is something states and society have a hard time to accept. On the other side, big corporations have a strategy that wishes to ignore states and borders. Mr. Beaude argues that these two aspects will lead to a conflict due to differences in cultures and values. The main example is the concept of freedom of speech which differs from a country to the other. Today world leaders do not believe that people can auto-regulate themselves, they also think that political issues cannot be solved on a global scale yet. Thus they aim for a separation of the internet into a multitude of country/region specific intranets.

Another issue is people retrieving from the internet to protect themselves. Some internet features are now moving from an amateur stage to a professional one. The main example is the collective intelligence, more specifically Wikipedia. Wikipedia is now a source of knowledge for a lot of people. Some leaders pay agencies to change their or competitors’ pages, misleading readers in the direction they want. Moreover due to the hyper connectivity of our societies we and firms are vulnerable to cyber-attacks.. Finally there is an issue with some big internet players, such as Facebook or Google, they are companies that have a distinction between their users and their customers. They collect an amount of personal data on their users and sell them to their customers, creating issues regarding liberty and privacy.

The internet faces a conflict between political, individual and private actors. The main goals is our liberty and its limitations. Who do you think will win this battle?

References:

France Culture, (2014). Les fin d’internet. [podcast] Place de la toile. Available at: http://www.franceculture.fr/oeuvre-les-fins-d-internet-de-boris-beaude [Accessed 19 Oct. 2014].

‘The Timeshare Revival’

In 2003, over 6.7 million households owned a timeshare and there were 5,400 timeshare resorts worldwide (RCI, 2003).

A timeshare provides someone property ownership or the right to use property, especially for resort condominium units. Initially, the timeshare concept had been introduced with the purpose of providing timeshare owners the possibility to visit the resort where they had become an owner of for a determined amount of time each year. The goal of timeshares was providing customers cheaper holidays on the long-term. With a timeshare the price of renting the property remains the same for a determined amount of years whereas the price would actually increase yearly.

When timesharing really became popular worldwide, organizations started to expand and to own several resorts worldwide. Customers had now the possibility (vacation ownership program) to buy a timeshare from a particular organization with which they could visit an optionally resort of the particular organization. When buying a timeshare from this program the owner receives a determined amount of points initially. The number of points that are required to rent a property in a resort depends upon the popularity of the resort, the size of the accommodations, which time period you are staying and the duration of the vacation (Marriot vacation club, 2013).

Timeshares are exchanged to customers by the organization/resort itself, by exchange agencies, by independent exchange companies or by direct exchange with another owner.

Next to the transaction fee, direct exchange excluded, timeshare owners have to pay an initial amount for the timeshare to the timeshare exchange body and to the organization/resort they can visit with their timeshare a yearly fee for maintenance and service.

Nowadays, timeshares have a negative image. Timeshare owners do not have a clear, easy to use, professional platform in which they can sell their timeshares and many people argue that the timeshares are overpriced (Crimes of persuasion, 2013).

First of all, local newspapers don’t have the worldwide reach, and non- specific marketplaces are often not the places where interested buyers look for timeshares. Moreover, platforms where timeshares can be advertised are often high charged and have no guarantee of sale. At last, the websites are not easy to use, which can be especially challenging for the sellers: often people of older age.

Because of the negative image many buyers are reluctant to buy timeshares. However, the timeshare owners still have to pay their yearly fee if they do not sell their timeshare.

There are timeshare organizations who have a buy-back policy, they buy-back a percentage of the annually sold timeshares, but since the organizations sell less timeshares (Hapimag, annual report 2013) to new customers they cannot buy back many timeshares from the owners.

There is a need for a transparent and easy-to-use platform where demand and supply can meet. This platform will be able to shift the perception of prospective buyers and facilitate the transfer of shares internationally.

The platform shall enable timeshare holders to make an advertisement for their timeshare. Timeshare owners can list their timeshares on the platform for free and only pay a service fee when the transaction is completed.

Furthermore the system shall enable buyers to search for a timeshare that they want to buy and enable them to bid on it.

This platform will realize ‘the Timeshare Revival’. It will help to rebuild the image of timeshares: the increased ease of reselling them will increase the demand for traditional timeshares. This will again, increase the possibilities and ease of reselling timeshares.

References

Why Bugdroid Is Here To Stay.

Android Logo

Currently, the two largest player in the smartphone operating systems industry is Google’s Android (Danova, 2014). In particular, Android has vastly increased its market share over the past four years, whereas the other operating systems either remained approximately equal (iOS) or even declined in market share (Microsoft, BlackBerry, etc.) (Danova, 2014). Yet, what could explain the rapid growth of Android? The answer to this question may be found when looking at the business models of the operating system.

The business model Android can be described as a platform mediated network. This means that the operating systems is a mere platform, that consists of components, rules, and architecture (Li, 2014). The Android platform brings together software developers on one side, and users on the other side. When zooming in on what actually attracts these two types of users, it becomes evident that the presence of the supply-side (app developers), attracts a larger demand-side (users), and vice versa. Therefore, this dependency among the different types of users is called network effects (Li, 2014). There are two types of network effects: direct and indirect (Li, 2014). In this case, the direct network effects are based on the number of users of Android-supported phones. However, since Android phones can perfectly communicate with for example iOS or BlackBerry phones, there are no direct network effects present. Instead, Android experiences indirect network effects, as the value to both sides of users depends on complementary products, such as apps (Li, 2014). Thus, if we want an answer as to why Android currently has such a large market share, we must look into both sides of Android’s users. The app developers use Android to market their apps, as Android supports a wide variety of phones (see the fragmentation in figure 1), and therefore users (Asay, 2014). Similarly, since there are more phones that support Android, the customer base of Android will also be larger.

Figure 1: The fragmentation of Android-supported devices (Asay, 2014).

Figure 1: The fragmentation of Android-supported devices (Asay, 2014).

Another factor that may contribute to the large market share of Android, is the fact that it is part of Google. In particular, Google has taken over from Apple as the most valuable brand in 2014 (Li, 2014). Since there are high switching costs involved, i.e. consumers tend to stick with a brand that they are familiar with, users of Google in general (web browser software, productivity software, etc.) will also tend to use the Android operating system (Eisenmann, Parker, and van Alstyne, 2010). Furthermore, the increasing platform envelopment of Google, that is the expanding functions of the firm, will also attract more Android-users in the long term (Eisenmann et al., 2010; Li, 2014).
So, don’t be surprised when you will own an Android device in the future: Bugdroid, the Android robot is here to stay.

Bibliography:
Asay, M. (2014). ‘It Really Pays To Be An iOS Developer, But There’s Still Hope For Android’. Business Insider. Available from: http://www.businessinsider.com/android-vs-ios-developers-2014-8
[Accessed on: 19 October 2014.]

Danova, T. (2014). ‘Here’s What The Global Smartphone Market Looks Like Ahead Of The iPhone 6 Launch’. Business Insider. Available from: http://www.businessinsider.com/the-state-of-the-smartphone-industry-2014-9 [Accessed on: 19 October 2014.]

Eisenmann, T., Parker, G., van Alstyne, M. (2010). ‘Platform Envelopment’. Harvard Business School. Available from: http://www.hbs.edu/faculty/Publication%20Files/07-104.pdf
[Accessed on: 19 October 2014.]

Li, T. (2014). ‘Slides Lecture 7: Platform Mediated Networks’.

Importance of user location in mobile applications

Identifying User Location has been gaining a lot of importance in mobile applications because this helps in tracking and predicting contextual user behavior at certain places and certain points of time. It conveys information about the user behavior/experience at different locations such as shopping streets, restaurants, universities or railway stations. This data about user locations helps in multiple ways:

  1. Marketing analytics: Based upon this user behavior insights from analytics, targeted advertisement campaigns can be designed to be pushed to users at specific locations. Offline businesses can utilize this further to attract customers who are passing nearby by pushing notifications to their devices informing them about latest discounts/offers. Facebook also announced that user location would be utilized for displaying real-time advertisements. For ex. Supermarkets can push deal notifications whenever a user passes near to their place and have an app installed or even detect users at a precise shelf or display (through Beacons described later).
  2. Consumer research: Specific businesses can also create survey campaigns and through this information collected from respondents, companies can decide where to place advertisements, shops or kiosks. Surveys can be made more targeted or personalized and delivered right at the point and in the moment of experience with combinations of user location and preferences. This enables lesser reliance on recall, more emphasis on real-time opinion collection at user’s convenience and getting an accurate feedback/response. For ex. For a user coming out of a movie hall, a notification is pushed to send feedback for the movie.
  3. Improving road traffic: Location information can also assist in utilizing traffic data from user’s location to design traffic signaling or traffic planning or users can plan their routes. Google Maps enable viewing traffic details through information obtained from users who have enabled GPS and using their speed to create a traffic map. Mobile operators can obtain user location by triangulation with mobile towers very easily and understand where the customers are spending time to enable advertisers to select right place. This also assists ride sharing applications such as lyft (https://www.lyft.com/).
  4. Connecting people: Location information can also help in connecting people (friends or relevant people with common interests). Foursquare is one such application that helps users discover local places and meet friends. This would help in huge conferences, or festivals, or music concerts where people can enable their location detection, preferences and find friends through app.

Technologies utilizing user location

To improve the ecosystem of location detection, various technologies exist which create a smoother interaction with user location and utilize this information in innovative ways as follows:

  1. Geo-fencing: This technology works by creating a virtual perimeter and whenever the user crosses these “virtual fences” (detected by GPS on user device), users get a contextual notification which may be a feedback survey or an exciting offer if they have signed up and based upon their preferences. There are companies with success in marketing campaigns with location based targeted advertisements.
    1. Use case 1: A shoe store ‘Meat Pack’ wanted to attract customers going to its competitors which were its key audience. Every time a customers with a MeatPack installed entered the store of the competitor, they received a notification about a countdown time (reduced by 1% every second) from 99% discount which stops when the customer enters the Meat pack shoe shop. Thus Meat Pack did not only attract the customers quickly and efficiently. Meat Pack had stolen over 600 shoppers from competitors and one very speedy customer managed to get 89% off a pair of shoes! 
    2. Use Case 2: Placecast, which offers location-based marketing services, created geo-fences with a radius of 0.5 miles around over 1000 pubs in the UK that sold Bulmers MMS message informing them where they could claim their offer on Bulmers cider.
  1. Nearfield technology: This technology communications between nearby devices through Bluetooth Low Energy (BLE) transfer. The information transmitting device has location information which connects with information receiving device and helps in identifying users through their devices. There are tiny information transmitting devices knows as Beacons which can be placed at specific places and whenever the user crosses nearby these devices, the user location can be precisely identified and appropriately utilized. This works without GPS and can be utilized in supermarkets, restaurants etc. For ex. Apple has developed an iBeacon technology for their devices to identify user location.

Issues with getting location information

  1. User awareness and convenience: A major difficulty is to attract or engage users to start sharing location information. Currently, data is obtained through metadata present in photos and videos shared online, through socializing applications (Facebook check-in or Foursquare) and through utility applications (Google Maps). User information Privacy is an important consideration to make users more open to sharing location. This should also be an opt-in process and users might need incentives for sharing location information (discount coupons for filling surveys).
  2. Compulsory connection to Internet: Both technologies described above need access to internet as one necessary condition for information delivery, which can prove to be a bottleneck for devices not connected to internet every time and lead to interruptions in user location information.
  3. Accuracy and precision: To enable interconnection between people, it is essential that location detection is more precise and correct to finer details. Absence of this would lead to inaccurately triggering notifications which could be both irritating and frustrating for the user.
  4. Phone limitations: Low end phones can’t handle location due to absence of features and high end phones use up a lot of battery. Also, variety of mobile devices do not track location in a coherent manner so the information aggregation becomes difficult.

Conclusion:

It is essential that all these location based services ultimately add value to the user and not make them feel unsafe or frustrated. The business strategy of employing a user’s location needs to be though out clearly. Any company targeting users on the basis of their location need to clearly describe what level of information would be obtained and utilized before asking for user’s consent. User awareness about the implications of sharing location data will go a long way in developing the ecosystem further and increasing location information literacy for the user. When sellers know where and what their customers, are doing, they can select a better deal to go through.

Sources:

  1. Golden, Paul, 2010. Moving Targets. [Online] Available at: http://www.research-live.com/moving-targets/4003637.article [Accessed 17-10-2014].
  2. Zickuhr, Kathryn, 2013. Location-Based Services. [Online] Available at: http://www.pewinternet.org/2013/09/12/location-based-services/ [Accessed 17-10-2014].
  3. Apple, 2013. iOS: Understanding iBeacon. [Online] Available at: http://support.apple.com/kb/ht6048 [Accessed 17-10-2014].
  4. Erica, 2012. Unresolved issues in location-based market research. [Online] Available at: http://www.kinesissurvey.com/unresolved-issues-in-location-based-market-research/ [Accessed 18-10-2014].
  5. Crocker, Peter, 2014. More than maps: the evolution of location-based applications http://research.gigaom.com/report/more-than-maps-the-evolution-of-location-based-applications/ [Accessed 18-10-2014].
  6. Wikipedia, 2014. Google Traffic. [Online] Available at: http://en.wikipedia.org/wiki/Google_Traffic [Accessed 18-10-2014].

Big Data Analytics, House of Cards and Future of Television Creation & Consumption

There are some posts, posted earlier on this blog, which talk briefly on how Netflix used Big Data Analytics to come up with the theme, plot, characters, actors and other elements of their original series, House of Cards. (Post link1, link2). This post dives deeper into how Big Data Analytics and Algorithmic Programming will shape the future of T.V. Series. This partially ties with the discussion in class in Session 6 regarding how consumer behavior is studied, modeled and influenced.

The television consumption industry is changing at a very brisk pace. People now expect television to fit into their own schedules and it is predicted that weekly scheduled television broadcasts will soon be eclipsed by on-demand entertainment. (Leber, 2013).

There haHOCs been a lot of buzz and stir in Data Analytics and Television Media circles since the creation of House of Cards. Netflix knew that its original series would be a grand hit based on the data of viewing habits of its 33 million users (Leber, 2013). Based on these tagging and recommendation system Netflix could understand

  • how viewers were enticed by political dramas (like British version of House of Cards)
  • how large proportion of viewers liked watching actor Kevin Spacey in the direction of David Fincher
  • how different trailers attracted the attention of different users.

and use this data for the creation of the series, which was made available all at once. Netflix was able to leverage its long lasting relationship with customers and using that data of their viewing  habits they were able to place their bets and produce ‘House of Cards’.

How much and what kind of data does Netflix deal with?

To put the movie viewing habits of viewers in perspective, the number of people watching movies streamed online was higher than those watching them on physical DVDs in 2013-14 (Sandvine, 2014). Also a third of data buffered during peak hours was due to movies streamed online.(Sandvine, 2014). Netflix mines the data of around 30 million ‘plays’ a day, including when their users pause, rewind and fast forward, 3 million searches, 4 million ratings by Netflix subscribers as well as the devices on and time of day when shows are watched.(GigaOm, 2012). In addition, TV shows and movies on Netflix are annotated with hundreds of tags inserted by viewers to describe the genre, the tone, the action and the talent, among plethora of other things. While in the past, those tags were used to recommend other shows by Netflix from a long list of titles on the service, now Netflix is using them in the creation of original content because it knows what people want. (Carr, 2013). While looking back at the show created and application of data analytics, begs to ask a more fundamental question, ‘Can creativity be automated’?.

Steiner, in 2012, in his article titled the same, started with the premise that creativity can’t be copied by machines as creativity is believed to be the product of mysterious processes within the right side of the human brain but later tells that complex algorithms are moving into creative fields and proving that in some of these pursuits and humans can be displaced. This is already observed in the case of music composers and creative writing. He also mentions that David Cope, a professor emeritus at UC Santa Cruz, believes that technology is almost there in not only replicating and reusing good music but creating new music. (Steiner, 2012)

Cope has been weaving thousands of lines of LISP code into music-making algorithms for 30 years. At first this produced crude music unfit for public performance, but now his algorithms compose music that imitates masters like Johann Sebastian Bach so well that people can’t always tell the difference. Cope feeds music to machine-learning algorithms that create new compositions by changing and building on patterns it finds in existing music. But his latest algorithm, which he’s dubbed Annie, takes programmed creativity yet a step further. She decides on the musical patterns, the criteria, and ultimately, the path she takes to making music. “I have no idea what she’s going to do sometimes,” Cope says. “She surprises me as much as anybody.”

Implications on Television Content Creation and Consumption

As companies like Google, Netflix, and Amazon, which know more details about our detailed watching habits, start to become more dominant forces in the creation of original programming, they could start also shaping creative decisions of directors and writers as well (Leber, 2013). In the years to follow all aspects of television content making including screenplay may be written to meet the whims of data-driven media streaming companies. Also, consumption, as mentioned earlier in the article, is believed to entirely move from broadcast schedules to on – demand viewing.

Important terms

IBM defines ‘Big data analytics’ as

the use of advanced analytic techniques against very large, diverse data sets that include different types such as structured/unstructured and streaming/batch, and different sizes from terabytes to zettabytes. It has typically has one or more of the following characteristics – high volume, high velocity, or high variety. Big data comes from sensors, devices, video/audio, networks, log files, transactional applications, web, and social media – much of it generated in real time and in a very large scale. Analyzing big data allows analysts, researchers, and business users to make better and faster decisions using data that was previously inaccessible or unusable.

  1. Leber, J., 2013. “House of Cards” and Our Future of Algorithmic Programming [Online] Available at: http://www.technologyreview.com/view/511771/house-of-cards-and-our-future-of-algorithmic-programming/ [Accessed 17 10 2014].
  2. Sandvine, 2014. Global Internet Phenomena. Available at: https://www.sandvine.com/downloads/general/global-internet-phenomena/2014/1h-2014-global-internet-phenomena-report.pdf/ [Accessed 17 10 2014].
  3. GigaOm, 2012. Netflix analyses a lot of data about your viewing habits. Available at: http://gigaom.com/2012/06/14/netflix-analyzes-a-lot-of-data-about-your-viewing-habits/ [Accessed 17 10 2014].
  4. Carr, D., 2013. Giving Viewers What They Want. Available at: http://www.nytimes.com/2013/02/25/business/media/for-house-of-cards-using-big-data-to-guarantee-its-popularity.html [Accessed 17 10 2014].
  5. Steiner, C., 2012. Can Creativity Be Automated? MIT Technology Review June 2012.

How large firms can use the hype of “sharing” stuf.

Nowadays we see sharing platforms all around us. From 3D printers to rooms, and from cars to just everything. Why is this just so popular? To start let’s have a look what the “sharing stuff” economy really is. The sharing economy is has several parts containing the following 6 (which can be more by the day, every new sharing platform has to have a fancy name with at least peer-to-peer in it):

  • social lending
  • peer-to-peer accommodation
  • peer-to-peer travel experiences
  • peer-to-peer task assignments
  • car sharing
  • commute-bus sharing.

I think every form has already been discussed in our lectures. We described how the platforms work, why they exist and how their influence could disrupt the current players in the effected markets. The platforms are based on the fact that people have things, things they actually don’t use all of the time which is a waste of production. So there is the supply of a certain good (just like in old-skool-economics), next to the supply there is the demand. The demand existing of persons who just don’t have the funding, desire or motivation to buy such a product for their own personal use. So demand and supply meet, where in conventional economics they meet in a store, a real estate company or a car rental spot, the new sharing economy combined with the IT innovations of the past years enables new ways to meet your supplier or customer. But what when the supplier isn’t the neighbor with its experimental 3D printer of a old lady with a car which she doesn’t use, what when the 3D printer stands in the Walmart and the car actually comes from Hertz.

Therefore we take a different insight in the mesh economy (again, mesh is a “new” term for exactly the same phenomenon). The mesh economy is something that has some robin hood like feeling around it. We can use other ones objects so we don’t have to buy one our self. It has a “Stick it to the man” feeling (oh yeah, a reference to my favorite movie, School of Rock”). But is this really true? And how can we maintain this knightly duty to remain independent?

To reference a well informed man:

We simply can’t. (Rob Ammerlaan, 2014).

And I simply tell you why, lets take the poster boy of sharing economy, Airbnb. I don’t know how many times you used it but my opinion changed over the many times I used. A few years ago, being an early adopter, I really enjoyed staying in an Airbnb location in Rome. It offered me a room for a price not comparable to hotels on a location which was better than the pope itself had. Last april (exact same time frame), I visited the same Airbnb room (twice the price, inflation?), which was now part of a larger group of rooms (still no problem). I thought the women my room was from just expanded her rooms, but this wasn’t true. She told me that most of the rooms available in Rome were owned by just one person (or group). This one person knowing exactly what the hotels asked and therefore raised the prices to exactly the same level as the hotels did. What happened to the “Stick it to the man” mentality? It disappeared, the people who used to be the poster boy of this movement became “the man” themselfs.  And this is exactly what I expect in the upcomming time, sharing economies turning into normal economies.

Today, I read a post about a initiative in San Fransisco, called DriveNow (https://us.drive-now.com/#!/howto). Just like Snappcar (and many other car sharing services), DriveNow offers you the joy of driving a car without owning one. But there is a huge difference, DriveNow only offers BMW’s, not that all the suppliers of DriveNow accidentally have got a BWM. DriveNow is owned by BMW. BMW saw the trend of car-sharing coming and tried to prevent their sales decrease by adjusting their business model.  And this is something I think will happen more and more, great initiatives like SnappCar and Airbnb being overturned into regular organizations. I hope we can enjoy the sharing economy for how long it lasts! It’s just there to become normal again:( (an no, I am not a pessimistic kind of guy)

Greetings Rob Ammerlaan!

Nestpick, the Airbnb for international studens.

A Rotterdam based and founded Start-up Company whose mission it is to change the real estate market. The idea emerged when international student and founder Fabian Dudek came to Rotterdam for his study and almost ended homeless. The problem for international students is to find a room without being able to visit the city. Furthermore, there are a lot unreliable landlords making it even harder to find a room in an unknown city.

Nestpick solves this problem. They enable international students to securely and conveniently rent private places online. They enable landlords or real estate companies to rent their rooms to possible tenants online. Students are ensured that the landlord is reliable and employees of Nestpick inspect the room and make professional photos.

Landlords have the benefits of getting professional photos and a continuing inflow of new tenants. They do not have to make time to guide possible tenants and all deals are made online. It will cut vacancies as students can apply before the apartment becomes available again.

The costs of the services provided is fifty percent of one month’s rent. The costs are for students, but the student will save a plane ticket because he doesn’t have to inspect the room beforehand and don’t have the uncertainty of not having a room.

Nestpick already have rented 15.000 months in 2013 for landlords, equivalent of € 1.000.000 in revenues. The 25 person staff sees a lot of opportunities to expand internationally where they are already nationwide. Moreover, this problem is not typical Dutch. International students in every other country have the same issues. There is certainly a market for Nestpick in other countries, but their business model obligate them to have Nestpick representative in every city they want to rent apartments. It could be done by partnerships with professional photographers, but it will always be expensive.

BMW and semi-autonomous cars – DTP group 15

Bayerische Motoren Werke Aktiengesellschaft (BMW AG) was founded in 1917 and is based in Munich, Germany. The company manufactures automobiles, engines and motorcycles. It operates in the automotive industry, which was created in the early 1900s. The automotive industry is a collective of all the companies that design, develop, manufacture and/or sell motor vehicles. BMW has emerged as one of the most successful automobile companies worldwide. It focuses on the luxury and exclusive car market. For this segment, BMW strives to offer premium cars that provide services that go beyond  necessary features.

 

Currently, BMW focuses on strong brand recognition, with high standards for quality and technology. This stems from the company mission: being the world’s leading provider of premium products and premium service for individual mobility (BMWgroup, 2014). The company has a global focus, just like most of the competitors on this specific market segment. Furthermore, it uses a differentiation strategy to distinguish itself by offering high quality materials and premium services.

 

The automotive industry was strongly affected by the financial crisis, but since 2010 sales have been on the rise again. BMW is also influenced by other factors from its macro environment: tighter CO2 emission restrictions influence the car design and BMW now also pursues alternatives to conventional cars, e.g. Hybrid vehicles; increasing petroleum and other raw material prices; fluctuating exchange rates; changing customer demographics and other technological advances in the car industry (‘connectivity’).

In the future BMW will strive for a larger, broader product portfolio and expansion, which it intends to achieve by focusing highly on innovation and strong technological developments. Furthermore, in their long-term energy strategy, BMW focuses on fuel-efficiency to improve its products image in that regard. Concerning its IT strategy, IT already plays an important part, namely, during the manufacturing process and within the vehicles themselves (software for board computers). Being innovative in IT remains to be a focus of BMW’s strategy.

 

The disruptive technology that BMW should consider implementing is semi-autonomous cars. These cars can sense their surroundings and navigate through it with minimal human intervention. Fully autonomous cars will not be released until a decade from now on, hence, we will focus on semi-autonomous instead as they face less challenges. So far, many leading car manufactures and new entrants (Google) have intensified their endeavors to make semi-autonomous become a reality within the upcoming years. We would advise BMW to incrementally implement semi-autonomous features into its existing cars, instead of waiting 6 more years before launching a new semi-autonomous car product line. This would enable them to recover costs earlier, gain experience under realistic conditions, meet governmental and legal requirements, as well as, gauging customer reaction. BMW will not be among the first-movers to introduce semi-autonomous cars, however, it can learn from the challenges that those will face. By the time, it introduces its own semi-autonomous vehicle, it could highly benefit from the technical, operational and economic experience it gained by introducing it incrementally in other car models.

 

Even though, the dimensions of the future (semi)autonomous car market are still hard to grasp, based on the car makers efforts and advances in technology, it is for sure that these cars will be on our streets within 10 years. Semi-autonomous cars are just a stepping stone towards a future that will alter how we will perceive and experience driving.

NS and NFC Payment – DTP Team 17

Nederlandse Spoorwegen N.V. or ‘Dutch Railways’ is the biggest train operator in the Netherlands, fully owned by the state. It is famous for their yellow trains with blue letters. During business days NS serves over 1,2 million people within the Netherlands.

We sought to analyse the Dutch railway operator NS, its current use of IT, and suggest a new IT application that could potentially transform their business. Current IT applications of NS include the Reisplanner Xtra application for phones and tablets, use of social media to engage with the customer, and the OV Chipkaart. This last one has been the focus of this paper, with the suggestion to replace the OV Chipkaart with NFC payment.

In 2007 NS introduced the OV Chipkaart instead of the paper ticket. This is a wireless smart card, provided with an invisible chip. This chip can communicate with equipment in the Netherlands. The smart card makes it easier and safer for the traveller. For the public transport companies it makes it easier to determine the deployment of capacity, resources and people. And, the sharing of revenue is faster and more fairly distributed.

The suggestion is to take out the need for a separate OV Chipkaart, by making use of other NFC equipped payment products, such as bank cards or mobile devices. This would play into recent developments in the area of NFC payment, and simplify the process of taking a train by not having to separately charge your OV Chipkaart. It would improve ease of payment for and accessibility of the NS railway system.

After the analysis of costs and benefits, it became clear that a more thorough look into the benefits is needed, to determine their size and impact. Therefore, the managerial recommendations are divided into four stages: stakeholder management, pilot, implementation and maintenance. The second stage, pilot, will allow NS to gain a better understanding of the costs and benefits, which allows them to make a better informed decision on whether to pursue this project. There is always the option to not proceed to the next stage if things do not seem favourable enough.

To illustrate these stages and how they interact, we have provided a sample timetable below. Since the idea behind using stages is to remain flexible and not commit to a full-size project straight away, this timetable is very subject to change. However, it still illustrates the sequence of stages and the continuous nature of stages 1 and 4 (stakeholder management and maintenance respectively). Next to that it shows that stage 4, maintenance, could already start while stage 3, implementation, is still ongoing.

Example timetable NS NFC Project

Mobile App for BMW – DTP Group 36

Automotive is one of the largest industries in the world right now and is still growing at a rate of more than 3% per annum. We have proposed a mobile application for one of the most well-known and respected automotive brands in the world – BMW.

The app would work well with BMW’s existing business model which seeks to offer a superior value proposition and customer service while targeting a segment which is willing to spend money for reliable and high quality services.

The app would be beneficial to both the company and the user. The users would be able to review new offers and deals, build their dream car, schedule test drives, calculate and make financial transactions, read and write reviews and view everything the dealership has to offer without having to physically go to the store.

The company would also benefit from the app in a myriad of ways as it would allow them to target a newer, more tech savvy demographic, offer new and unique services that will give them an edge over their competitors, and the app would also serve as a marketing platform for the firm.

The app’s success would be judged by the number of application downloads, amount of usage of various app features and the novelty of the idea through word of mouth propagation and feedback. Thus, the important decisions to be considered revolve around the features of the app, extent of integrating technology with the overall strategy and infrastructure to be planned for growth and new campaigns. Feedback from the users and the dealers would be a very important source of information in the conceptualization of the app.

Developing such an application is not cheap. But we believe that even if do not get any direct financial benefits from this app, the company will be able deliver superior value to the consumer through the app and that would be beneficial to the company in the long run while aligning itself to the company’s business strategy. The app would also serve as a marketing platform for the company. The financial risks associated with developing the app are not very high for a company like BMW. If the app is not able to succeed as per the company’s expectation, it is very easy to terminate the app, without incurring any additional costs.

The future scope of this app is also very vast. The app may be designed to include a larger variety of services such as including garage visits, and roadside assistance into the app. The app can serve as an interactive online community for BMW owners and it may also be developed to serve as a marketplace for sale and purchase of used cars. The app can also be integrated with the car in such a way that the owner is able to monitor the car’s location and it’s health at all times directly from the app while controlling the luxury features of the car from their mobile device.

In conclusion, we propose a mobile app for a car dealership such as BMW which can potentially transform its business model. This app would serve as a platform for all types of communication between the user and the company. The app would give the company a significant competitive edge as no other car dealership offers such an app right now and BMW would have the first mover’s advantage.

A huge dataset but no analysis tool! – DTP group 24

Introducing Erasmus Medical Centre. As the second largest UMC in the Netherlands, the organization has 1320 beds and has opened 402,470 Diagnosis Treatment Combinations (DTCs) in 2009. In that year, 38,555 patients were hospitalized and there were 504,484 visits to the outpatient clinic, which requires Erasmus MC to employ 10,915 people in 2009. (Francine IJpelaar, 2010)

For over a decade the hospital has been working closely with a firm called Planon, the developer of the facility information management system that the hospital uses. But the problem that has risen is, “what does the EMC do with all this data that is being produced and stored?” The answer is, they are not. They are just sitting on huge amounts of data without any proper tools to make sense of it all. And what we would like to see the hospital integrate its IT into its business strategy. Instead of seeing it as supplement to the strategy.

We think, by introducing predictive analytics and new ways of aggregating and analyzing data, we could help Erasmus MC make better decisions on where and when to spend their money on specific types of maintenance, thereby improving their bottom line through significant cost savings. And these cost savings are very welcome considering the fact that the healthcare costs are still growing rapidly and the time has come that the insurance companies stopped just blatantly paying for it.

But besides this pressing financial issue, there is also another major driver behind this change. The hospital wants to excel. Not just in terms of patient care, research and education, but in operations management as well. We believe better analytics and a data-driven approach to making decisions will help Erasmus Medical Centre fulfil its mission and vision for the future.

Our analysis includes a set of models that help detail in what way big data analytics will change the way hospitals operate. An overview of potential areas of profit can be found here:

Schermafbeelding 2014-10-19 om 05.52.26

We did have trouble going over the financials and feasibility of the project because our contact has made clear that due to the special nature of the relationship between the hospital and Planon, the negotiation process preceding the upgrade of the software has already likely been somewhat regulated through a contractual agreement. Therefore, it is highly unlikely that we will be able to estimate the cost of this implementation by any degree of certainty and so we didn’t include it.

The proposed solution is exceedingly simple to implement. All it requires is a simple update to the already existing information management system. Naturally, people will have to be trained to think in data-driven decision making and must be taught how to use the new module, but those are minor concerns with respect to the many benefits “Big Data” could provide. Upgrading the facility management information system will help acclimatize the hospital to the benefits and pains of business analytics and pave the way towards wide-spread use of business analytics.

Reference: 

Ijpelaar, F. (2013) “Case Study – Erasmus MC” http://www.incoresolutions.com/uploads/ Downloadcentrum/Customer%20Cases/NL/Customer%20Case%20Erasmus%20MC%20NL.pdf, 17-10-14

Each year millions of packages delivered on time by UPS thanks to IT – DTP group 39

UPS or United Parcels Services is the largest shipment and logistics company in the world. UPS’s primary business is the time-definite delivery of packages and documents worldwide. In recent years, UPS has extended its service portfolio to include less than truckload transportation and supply chain services. UPS Professional Services handles a variety of transportation and distribution problems,including distribution network analysis, optimization, expansion, and realignment for improved service levels and costs. Its package lab and consulting services address initial packaging and product design needs, to on-site training and implementation

During the 1990s, United Parcel Service (UPS) grew from a $14 billion package delivery company to a $30 billion global enterprise offering international shipping, logistics, financial, and related services. UPS management adopted a strategy of “enabling global commerce” which combined the physical movement of goods with the movement of information and capital. In the 21st century, the firm is expanding deeper into its customer supply chains.

By 1993, UPS started entering into electronic commerce in many ways, leveraging the group’s unique position as the physical link between buyer and seller, which is regarded as a critical part of their supply chains by customers. They partnered with many of today’s leading software companies like PeopleSoft, iCat, IBM and others.

Information technology did not change their corporate mission, but it fundamentally altered the way they operated the business. Their goal was is to be as prominent in the virtual world as they are in the physical world.

They invested billions in information technology, a fleet of airplanes, and many other improvements across their vast system.

At this moment the smartphone mobile market could still be considered an emerging technology where two markets are converging. The telephone and personal computer are in a way combined and offer the user the possibility to use both functionalities on one device. In the case of UPS parcel service, more of their customers do either own such a smartphone or own a phone with email functionalities. This emerging technology takes an important role in the daily lives of the customers, but also the employees and creates new possibilities for both groups. For example, customers can be alerted by SMS and/or email and informed about their next delivery or pick-up. Also, by way of a mobile application customers would be able to interact with the company more efficiently and in a faster fashion. This comes in handy when people are not at home and want to reschedule the delivery appointment. In such a situation, it would be possibly to easily change the delivery address to the customer’s workplace for example.

There is room for improvement. UPS should concentrate on operations outside the US to diversify its risk. However, the packages you receive on time every time a UPS deliveryman knocks at your door is thanks to a whole IT network and supporting systems.

SaaS within Apple – team 29

The IT markets have changed rapidly the pas years and new products and services have been released in a quick pace. Apple has been one of the firms to reach tremendous success in this market in the recent years. As you all know, their bestsellers were the iPhone and iPod, both with extensive supportive platforms, offering additional value. Additional to this platform they offered applications in their app store for example. Apples products have been about incremental, and competitors have been catching up. Can Apple stay put as influencing IT firm or will they lose their market share in the following years?

Take for example Googles Android, which has a marketshare which destroys that of Apple’s. They are the current leader on the worldwide smart phone market, and currently also move into the operating platforms and systems for laptops as well. They do this in the form of Chrome OS and Chromebooks. These devices are way cheaper than that of Apple’s. The current development within Google’s strategy is to move into Cloud computing. There devices are cheaper and through cloud computing they try to offer the same or more advanced services as Apple but then at much lower costs. These developments necessitate changes in Apples strategy.

Apple Should consider several steps to implement this change into their strategy. First they should try to launch a cheaper line of devices to compete with Chromebooks. These new devices will be more competitive with Chromebooks and comparables. These devices from Apple should be supported by cloud computing so they can deliver the same performance as these other devices and yet be in the same price range or cheaper. Cloud computing will allow Apple to profit from the fact that in general the users will not need extraordinary performance from their device, and if they to it will only be by certain pieces of software. For slower devices, difficult calculations can be offloaded to Apple’s servers. Apple could also provide applications in Software as a Service setting, so that software becomes more platform independent so that it functions on all Apple devices.

When talking about a cloud strategy, we suggest Apple to think about software as a service (generally known as SaaS.  Software as a service (SaaS), is software that is offered as an online service. In the SaaS model, software is not sold and run locally by the user, but is instead offered as a service which can be accessed remotely, usually through a browser. Traditionally, software is distributed on a physical medium, has a high initial cost due to the purchase price of the software and usually the user pays a monthly or annual fee for support. With software as a service however, the initial costs are low, because the software does not need to be bought, but the users usually do pay a recurring fee as payment for the service.

If Apple wants to implement this strategy with success, the firm needs the support of third party developers. One of the most value adding parts of Apples design is their availability of third party apps. To make it as easy as possible for developers to create cloud-enabled applications, Apple should integrate this functionality in their software development kits, so that developers have the necessary tools to create such applications. Apple also needs to focus on data-safety and privacy. Because more data will be stored in the cloud, security measures become more important, as risk rises with the amount of information that is stored.

Wearable Technology for Jumei – Digital Transformation Project Team 28

E-commerce has paved a new way in which retailers are able to target a large number of customers without having to incur high costs of setting up physical stores. Nowadays, customers are able to purchase various cosmetic products through the Internet. With so many companies offering online purchases, different customers’ needs can be satisfied based on their taste and preferences.

However, many customers do not know which products are most suitable for their skin types and surrounding environment. They simply rely on word-of-mouth and observational learning to select the products with high rating or positive comments. In fact, with the development of IT and big data, online retailers of beauty products can do more to help customers choose the right beauty products based on their individual condition.

Jumei is a Chinese listed company in NYSE. It’s the biggest online retailer of beauty products, with over 10.5 million active customers at the end of 2013. Jumei has adopted multiple effective sales formats to generate its revenue, including curated sales, online shopping mall and flash sales.

In this report, we propose a digital transformation project for Jumei to provide recommendations of suitable products to customers and therefore add value to Jumei. Beauty data plays a significant role in this project.

Jumei

First, a wearable device, Jumei Bracelet, is used to collect the data of individual customer’s skin condition (internal) and surrounding environment (external). For the user’s skin condition, the sensor aims to test five indicators including moisture, oil, sensitivity, skin pigment and acne. Users can raise their arms to make the sensor reach their faces. If users have some uncomfortable skin problem, like allergy, they can address that part of face to get detailed analysis. As for the weather condition, the other sensor would monitor 4 indicators, UV, humidity, temperature and wind, to conclude a basic environment of the skin. The data can be used to analyze the user’s potential skin problems under certain environment.

Then, the data are transmitted to a mobile phone app by Bluetooth. A simple analysis of data can be conducted by the app. It can show the raw data and generate charts for users to continually monitor their skin conditions and other factors related to their beauty. Advices are also given to users, such as whether they should prepare sun cream for the next few days.

Moreover, the data are also sent to the database of Jumei. By using cloud computing and big data technology, Jumei can recommend the most suitable products based on the real-time personalized needs of customers. The algorithm may include the description of the various beauty products and the results of using the recommended products by previous customers.

Our project is technically feasible, because such devices have already existed in China and the prices are reasonable, as shown in the following table.

 SmartBand

In our proposed business model, the price of the Jumei Bracelet will only be set slightly higher than its cost, in order to attract more users. Value added to Jumei mainly comes from auction bid and sales enhancement. Our auction mechanism is similar to the idea of Google AdWords that supplier have to bid for showing their products in the recommendation list to suitable customers. In addition, since the Jumei system can recommend personalized products to customers based on their actual needs, customers may become less sensitive to price and focus more on quality of the products. It’s always worthwhile to pay for your beauty, isn’t it  : )

The future of supermarkets – Digital Transformation Project Team 33

Supermarkets are not known for their innovative business models. The last disruptive technology embedded was the implementation of the barcodes 40 years ago. Nowadays, the barcode system still functions but another disruptive technology is emerging, RFID tagging. Radio-frequency identification (RFID) is a generic term for technologies that use radio waves to identify people or objects. A chip is connected with an antenna and the power is dragged from a field created by a RFID reader, which makes the RFID tag passive. An active RFID tag includes a battery, making it larger and more expensive.

A lot more information can be stored on RFID tags than at barcodes. Furthermore, it can be read from distance. RFID tags are already used in different industries. For example, automatic toll collection, contactless payment, mobile phones and even your clothes can communicate with the washing machine through RFID tags.

Currently, RFID tags are present in the distribution channels of the supermarkets but not on item-level. Pallets, trolleys and other returnable transport items are equipped with RFID tags. In this way a distribution center can manage orders more efficient and is it always known where certain items are located.

The impact on the business environment for supermarkets with item-level RFID tagging is enormous. With RFID tags, inventory will always be up-to-date. Readers can identify all individual product in store. So managers doing reorders do not have to manually check all items to make an estimation if a reorder is necessary. The system will be able to automatically reorder when inventory fall below a certain point. Furthermore, the manager get insights in real-time sales statistics and all expiry dates at once. The system can also check all incoming freight with the ordered products to exclude a chance of a wrong delivery.

The bottleneck in the supermarket, the check-out, will be solved. In theory, it is possible to walk through a gate where the system identifies all products instantly. Cashiers don’t have to scan all items manually anymore, leading to a more efficient way of handling check-outs. Another benefit is the decrease in theft. It will become much harder to steal due to the fact that every product can be monitored. Someone can only pass the security when the tag is malfunctioning.

This technology isn’t new. The reason that it isn’t implemented yet is twofold. There is first of all the dilemma who bears the costs for the tags? Secondly, who is going to tag the products? The system will only be beneficial when all items are tagged. When those and other barriers are overcome, a supermarket chain can be disruptive again.

And not only supermarkets would profit, the whole supply chain and even the society can benefit. Vendor managed inventory would become very interesting and the bullwhip effect would be reduced. The society can benefit as the food waste is reduced. If all parties in the supply chain can get more insights in their wastage and forecast better, wastage would be reduced.

It is though, a matter of time when the deadlock is broken and we all can benefit from a new supermarket experience.

Digital transformation project Team 1: The Markthal

The Markthal in Rotterdam is a new, innovative concept based on the old, existing concept of a market. Many European cities have a market under a roof except for the cities in The Netherlands. The Markthal in Rotterdam, opened in 2014 has changed that. But it is not just a market underneath a roof. The Markthal is called a ‘food Walhalla’ (The Guardian, 2014).

Since the opening of the Markthal, a large discussion raised about the targeted customer segments. In different newspapers and on social media the products (Van Veelen & Özdil, 2014), prices (Postma, 2014), the loss of employment (Keuning, 2014) and audience (Boddaert, 2014) are being criticised. The Markthal would steal customers from the traditional ‘Blaak market’ and moreover, it would have been build only for the wealthier people in Rotterdam.

Although it is not the expressed ambition of the Markthal, it is currently aiming to serve the wealthier customer segment of Rotterdam and its surroundings. This is only focussing on the shoppers and visitors, earlier classified as consumers. In Rotterdam, the number of individuals or families with a middle or upper class income is respectively 33% and 13% (Rotterdam, 2013). With over 600.000 citizens, the size of the targeted market is around 275.000 people.

A common problem for the working middle and upper class is the lack of spare time. Spending this time on groceries is very often not desired, especially during working days. However, people’s desire for high quality products is increasing at the same time (Verhaar, 2014). Therefore the business need in this business transformation is stated as ‘missed revenue and potential customers not being served by the Markthal’.

To address this problem, we considered two options. The first option would be complete customization. We would introduce online shopping with high quality products from the Markthal. The second option would be sending food boxes to customers on weekly basis.

After considering multiple KPI’s and a cost benefit analysis, we have chosen to implement the latter. First, by implementing this option we expect the Markthal to expand their customer base at relatively low costs. Second, the Markthal will now focus on multiple markets and therefore spread the risks that come with competition from either regular (super) markets or initiatives like HelloFresh.