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Study commissioned by DG CONNECT 1
www.technolage.org
Home Sweet Home Midterm Workshop
Barcelona, 17 January 2013
TechnolAGE: Study on business and financing models related to ICT for ageing well
Sustainable business cases for ICT based services for elderly care
Study commissioned by DG CONNECT 2
Contents
(1) The TechnolAGE Study: Introduction and overview
(2) Focus on two sustainable business cases
(3) Conclusions and lessons learned
Study commissioned by DG CONNECT 4
• Project commissioned by DG CONNECT, conducted by Ernst & Young and the Danish Technological Institute
• The overall aim is to show that it is worth investing funds on ICT for ageing well and that it is possible to generate a return on investment
• Policy and strategic context:
• Need for a change in mindset behind financing care systems for older people – it is worthwhile investing now to save in the longer term
• Shift from cost to investment mindset (benefits for older people, market, society)
The TechnolAGE StudyStudy on business and financing models related to ICT for ageing well
Study commissioned by DG CONNECT
Objectives and scope of the Study
5
1
2
3
1
2
3
20 case studies of sustainable business & financing models for existing innovative ICT solutions
for ageing well
5 case studies (selected from the 20) explored in greater detail with respect to their
replicability
Stakeholder engagement through an interactive project
website & events (e.g. conferences, workshops, etc)
5
What is already out there?
What can be learned from his?
How can this be shared?
Study commissioned by DG CONNECT 6
Methodology for case selection
ICT solutions for ageing
well
20 cases of sustainable business & financing models for existing innovative
ICT solutions for ageing well
5 cases for the replicability and
scalability analysis
TAXONOMY DIMENSIONSDimension A: Geographic region
Anglo-Saxon
Scandi-navian
Conti-nental
Mediter-ranean
Eastern European
Dimension B: Actors
StateCommercialCivil societyInsurersPeople
Dimension C:Actor roles
FunderProviderCarerOlder person
Dimension D:Domains
Prevention Care & cureActive ageing
Dimension E: Scale
Local / regionalNationalCross-border/Int’l
Dimension F: Type
Type of intervention
Actor roles (C)
Actors (B)
Fund
er
Prov
ider
Care
r
Old
erpe
rson
StateCommercialCivil societyInsurersPeople
The case selection taxonomy was used to ensure a balanced and pertinent selection of cases across the main types and issues relevant to the study.
• Impact evidence• Scaling/replicability
evidence• Business model
innovation• Availability of
information• Geography• Domain• Scale
Study commissioned by DG CONNECT 7
The selected 20 cases
North Yorkshire County Council (NYCC) telecare
and NHS North Yorkshire & York (NHS NYY) telehealth
doc@HOME® (Docobo Ltd)
Netwell-CASALA Centre and the Great Northern
Haven project
The ESOPPE Programme
SOPHIA
VieDome (Mextal B.V.)
Wit-Gele Kruis: Electronic Nursing Record (ENR)
Distress care AREÍON (TeleCare) Emergency Care
Digital Hungary, mHealth
Griffin Medical Alarm
Nuvola IT Home Doctor
Telecare and remote monitoring for older people in Veneto Region (TESAN)
Eldy
Patient briefcase (Medisat)
eCare (NEAT)
Phoniro
Vivago
Abilia: Assistive technologies for patients with dementia
Scottish Telecare Programme Board (STPB)
SIMAP (Vodafone and Red Cross)
KEY:
Anglo-saxon (4)
Scandinavian (4)
Mediterranean (5)Eastern European (3)
Continental (4)
Study commissioned by DG CONNECT 8
The selected 5 cases
8
SOPHIA
VieDome (Mextal B.V.)
Patient briefcase (Medisat)
SIMAP (Vodafone
and Red Cross)
The Scottish Telecare Programme Board and the
2006-2011 Telecare Development Programme
(STPB)
Study commissioned by DG CONNECT 9
Key partnerships Key activities Value propositions
Customer relationships
Customer segments
Key resources Channels
Cost structure Revenue streams
Methodology for case analysis
• Each of the 20 cases has been analyzed based on the 9 elements of the Business Model Canvas (Osterwalder, Pigneur et al, 2010*)
• Additional features were also considered, in order to account for framework conditions
The Business Model CanvasThe Business Model Canvas
* See http://www.businessmodelgeneration.com/
Study commissioned by DG CONNECT 10
(2) Focus on two sustainable business cases
SOPHIA and the Patient Briefcase
Study commissioned by DG CONNECT 11
The SOPHIA case (Germany)
(1) Housing companies as the distribution channel
(3) Customer service centre and professionally managed network of local service providers
(non profit)
(4) The role of the SOPHIA volunteer
network in providing an end
user-centric service
€ € €
JosephStiftung
StadtbauBamberg
WohnbauCoburg
€
(2) Regional franchise model
Study commissioned by DG CONNECT 12
The SOPHIA business model
Key partnerships Key activities Value propositions
Customer relationships
Customer segments
Key resources Channels
Cost structure Revenue streams
Study commissioned by DG CONNECT 13
Financial strategy and success factors of SOPHIA• Sophisticated franchise (fixed-fee) and financial
incentives to housing organizations
• Strategy as price leader, with 90% refund eligibility
• Non-profit partner reinvests any profit
• Revenue growth keeping pace with customer growth with managed costs
• Breakeven achieved in 2010, after 5 years (for housing companies) – key is the growth in customer base
€ 0
€ 100.000
€ 200.000
€ 300.000
€ 400.000
€ 500.000
€ 600.000
2005 2006 2007 2008 2009 2010 2011
TOTAL revenues
TOTAL costs
Total costsTotal revenues
Breakeven
Study commissioned by DG CONNECT 15
The Patient Briefcase business model
Key partnerships Key activities Value propositions
Customer relationships
Customer segments
Key resources Channels
Cost structure Revenue streams
Study commissioned by DG CONNECT 16
Financial strategy and success factors of the Patient Briefcase
•Public investment through national and European research funds
•Early establishment of private company to convert public/own investment into viable enterprise
•Recent breakeven and 2012 profits after 5 years
Study commissioned by DG CONNECT 17
(3) Conclusions and lessons learned
SOPHIA and the Patient Briefcase
Study commissioned by DG CONNECT 18
Some lessons on and barriers to sustainability from the two cases
SOPHIASOPHIA
The Patient Briefcase
The Patient Briefcase• Breakeven thanks to favourable
revenue and cost developments• Clear benefits for both public and
private partners through franchising approach adding value to each actor
• Strong staff commitment, also from volunteers
• Low average income of older people (insufficient to support the market alone)
• Public financial aid relies on demonstrating high need levels
• Radically innovative product generating large cost savings and clear user benefits
• Flexibility of product in terms of contexts and conditions
• High initial reliance on public R&D funding
• Price setting and contractual difficulties with public customers
LESS
ON
SBA
RRIE
RS
Study commissioned by DG CONNECT 19
Some lessons on and barriers to sustainability from the twenty cases
• Policy context• Producing/accessing good impact evidence• Smart procurement• Standards, guidelines, interoperability• Medium / long-term view• Smart use of funding
• Lack of standards• Silo benefits/investments• Lack of understanding• Lack of skills / infrastructure
LESS
ON
SBA
RRIE
RS
FOR PUBLIC SECTOR
• New partnership / business models
• Ecosystem approach• Modular solutions• Consumer-led models• Impact evidence
• Lack of buy-in from senior management
• Uncertainty of funding• Channels and pricing
FOR PRIVATE SECTOR
Study commissioned by DG CONNECT 20
Stay tuned...
Visit us: www.technolage.orgFollow us on Twitter: @TechnolAGEContact us: [email protected]
Final conference: Brussels, 14 February 2013
Study commissioned by DG CONNECT 21
Thank you!
For any comments or questions, please do get in touch!
Mariafrancesca MieleSenior Consultant, Ernst & [email protected]