2012

Optimized Commuting Solution

NTADBM Project
This document details the Design, Technology and Business Model for the Optimized Commuting Solution proposed by a joint team of IIM-A and NID students.

Submitted to

Prof. Rakesh Basant

Prof. Deval Kartik

By Anil Kumar Vikram Borar Snigdha Rashmi Sheeshum

NTADBM Optimized Commuting Solution

TABLE OF CONTENTS
Abstract ........................................................................................................................... 2 Introduction ..................................................................................................................... 3 Brief description of the product .................................................................................... 3 Functionality ................................................................................................................. 4 Benefits ........................................................................................................................ 4 Design ............................................................................................................................. 4 Design Requirements: ................................................................................................. 4 Performance Requirements: ........................................................................................ 5 Product Design: ........................................................................................................... 5 Components: ............................................................ Error! Bookmark not defined. Technology ...................................................................................................................... 5 Sample User Scenario ................................................................................................. 5 Optimization Methods .................................................................................................. 6 Time:......................................................................................................................... 6 Economical: .............................................................................................................. 7 Implementation ............................................................................................................ 7 Business Model ............................................................................................................... 7 Elements of a Business Model ..................................................................................... 7 What is being sold and the associated asset needs ................................................. 8 Value Proposition for the customer ........................................................................... 8 Value Proposition for the seller and how value is being appropriated:- .................... 8 Revenue Model ............................................................................................................ 8 Financial Plan .............................................................................................................. 9 Legal and Regulatory Environment .............................................................................. 9 References .................................................................................................................... 11

NTADBM Optimized Commuting Solution

ABSTRACT
Planning a journey within ones desired parameters is one of the main requirements of the customers in the travel industry. Despite a plethora of online ticket booking sites and availability of online maps, commuters still have to spend double effort in deciding on means of travel first and then doing the cost/time prioritization according to availability of means of transport and their cost. This clearly indicates that there is a distinct gap between the information of distance to be travelled and how to travel.

The project is focused towards solving this problem. It looks at a journey not as two end points, but in terms of location to location travel. The aim of the project is to help the commuters decide on the journey based on their time and cost constraints. This is done by breaking the total distance into small combinations of locations and means of travel between them in the most effective way. This helps the commuters get high level of customization suiting their needs.

The application is based on a user-friendly design with an intuitive understanding of customer priorities in providing options for travel. The solution is enabled through latest technology available in the field of mobile application development and optimizing algorithms. The business model is based on payment per transaction and advertisements by service enablers like airlines, bus providers and cab services etc.

NTADBM Optimized Commuting Solution

INTRODUCTION
Commuting to different places one has never been before is a challenge in itself. The travelers usually rely upon tools like Google Maps to find out the distance between two places and if the distance to be travelled is more than a certain threshold, they look for options for commuting. If the destination is at a considerable distance, one starts to look for means of commuting which may/may not be according to ones travel requirements. The cost of travel is known only when you go for booking a flight or a railway ticket. Often, just these dont solve the problem. What if airport is about 50 km away from the city? In such cases, the last mile travel becomes uncertain and can lead to considerable cost and anxiety for a commuter; especially in case of travel to a new place.

The project solves this issue. We look at the entire length and location of different places which might lie on the path between a certain origin and destination. We generate commuting options based on different legs of the journey that can be covered by certain means of transport, and cost and time involved in the journey.

BRIEF DESCRIPTION OF THE PRODUCT

A system has been designed that uses Google maps to calculate the distance between origin and destination of a journey; which in effect acts as an extension to Google maps. It shows all the alternatives to reach a destination at cheapest fare and shortest time. It is so designed so as to connect with various public and private modes of transportation including bus, rail, car, rickshaws. It also suggests walking as an option for shorter distances. Optimization is carried out for following three levels of commuting: Air, Rail, Ship Bus, Local Trains, Metro, Taxi, Auto Rickshaw Cycle rickshaw, Shutter Auto, Take a Walk

Customization is done for the users based on the following two criteria: Time: This mode is for those commuters who place a premium on duration of journey. For them, less time spent at commuting is more important than the costs involved.

NTADBM Optimized Commuting Solution

Economy: This mode provides all the cost-effective options for travelling between two places. These users might desire for cost savings in one stage of the journey and time-effectiveness for another stage. This is for travelers who might be planning to take a tour rather than just a one-off journey.

FUNCTIONALITY
The application supports the following functionalities: Guidance about the way in a strange place Tour planning Editing of travel iterations and managing them Display reviews about users travel plan Valuable information to make users trip more fun and productive Managing multiple people involved in the trip and keeping them updated

BENEFITS
The application provides the following benefits to the travelers: Efficient and optimal time management Cost effectiveness of the journey Customized services for each users preferences

DESIGN
The application is designed to fulfill certain requirements of the users. Various characteristics are taken care of while design of the application with respect to design and performance requirements and finally about the product design. The same are detailed below.

DESIGN REQUIREMENTS:
The list below mentions the design requirements of the application: Flexible User friendly Scalable Ability to perform complex calculations in a small time

NTADBM Optimized Commuting Solution

Neat user display Compatibility with mobile Operating Systems and processing environment Search facility Creation of individual accounts on the application and keep records Ability to manage revenues by calculating revenue share per transaction

PERFORMANCE REQUIREMENTS:
The application must have good performance in terms of the following: Robust system with minimum downtime Response time is to be in miliseconds Dynamic cost calculation

PRODUCT DESIGN:
The various components of the product application are mentioned below: Website Databases User display pages Revenue Management System Account Management System Optimizer

TECHNOLOGY
SAMPLE USER SCENARIO
Roger wants to go from point A to Point B Roger opens COS application on his mobile phone He puts the address on the search box. It displays multiple points. Roger selects the exact location The moment he selects the exact location, the system asks for the date of journey Roger puts in the travel date

NTADBM Optimized Commuting Solution

Then a snapshot will pop up displaying three levels of commuting depending on the distance. The snapshot shows three levels of commuting mentioned below: Air, Rail, Ship Bus, Local Trains, Metro, Taxi, Auto Rickshaw Cycle rickshaw, Shutter Auto, Take a Walk

The system will show multiple bars through which Roger can actually compare the overall time and money which needs to be spend on different alternatives The weights are on the basis of four priorities (Time, Economical and Optimal) among which a Roger can select Then Roger will come across multiple options of air, rail or ship along with the expenses it will incur. It includes connecting to multiple domestic aircraft carriers, fares of train in various reservation formats and fare of cruises Roger can actually compare the fares of different modes of transportation on a single screen. The whole procedure to book the ticket will be undertaken. It will work as makemytrip.com Once Roger has decided to go ahead with the system will organize for the second level where Roger will again have multiple options to go ahead with It will show buses, metro, prepaid taxi, hired cabs, and auto rickshaw The system will incorporate feedback from Roger and other users to improve the performance

OPTIMIZATION METHODS
TIME: For shortest commuting time, we need to divide the shortest path by the fastest means of travel available. We combine the data received on modes of travel available with shortest path which is calculated using Dijkstra's algorithm. The algorithm is based on the concept of graph-search that solves the single-source shortest path problem shortest path problem for a graph with nonnegative edge path costs, producing a shortest path tree. This algorithm is often used in routing and as a subroutine in other graph algorithms.

NTADBM Optimized Commuting Solution

For a given source vertex (node) in the graph, the algorithm finds the path with lowest cost (i.e. the shortest path) between that vertex and every other vertex. It can also be used for finding costs of shortest paths from a single vertex to a single destination vertex by stopping the algorithm once the shortest path to the destination vertex has been determined. For example, if the vertices of the graph represent cities and edge path costs represent driving distances between pairs of cities connected by a direct road, Dijkstra's algorithm can be used to find the shortest route between one city and all other cities. As a result, the shortest path first is widely used in network routing protocols, most notably IS-IS and OSPF (Open Shortest Path First). ECONOMICAL: The Dijkstra's algorithm is used to produce various combinations of economical options available.

IMPLEMENTATION
Implementation will be done using the following components: Wamp Server Content Management System Integrated Database Server - MySQL Server Google APIs Optimization Modules APIs for connecting to databases of travel service providers Revenue module

BUSINESS MODEL
The business model is one of the most important requirements for the success of an enterprise. It is very important to understand the market, the needs of the prospective customers, the value-addition provided by the product and how it helps satisfy those needs. A business model also covers the financial and revenue plans for the enterprise.

ELEMENTS OF A BUSINESS MODEL

A business model must cover various important aspects of an enterprise. Some of them are mentioned below:

NTADBM Optimized Commuting Solution

WHAT IS BEING SOLD AND THE ASSOCIATED ASSET NEEDS The product being offered is a software application that can be downloaded and installed by a user on his/her mobile for free. For this, tie ups with mobile operators would be needed. The choice of the operators would be on the basis of ownership of a certain type of operating System, the most dominant being Apple for iPhones and Google for Android based phones. Extensive partnerships with various providers in airlines, railways, buses and cabs would also be required for access to their databases for providing the optimizer service to customers. VALUE PROPOSITION FOR THE CUSTOMER The customers are provided with the ease of customizing their travel plans on the basis of their preferences. The double effort spent on deciding the means of travel first and then doing the cost/time prioritization is saved with this application. This saves a lot of time, effort and search cost. VALUE PROPOSITION FOR THE SELLER AND HOW VALUE IS BEING APPROPRIATED For successful commercialization, we will be dependent on Google market and Apple iPhone apps store for reaching the customers. Also, we need to collaborate with Google on its Maps and need to have to partnerships with other travel service providers for revenue generation. Our revenues will be a percentage of the amount of bookings done from our site per transaction. This will increase our dependence on these entities even though we patent our product. So our hold up costs will be high. We will also depend upon advertising for our revenues for which we will need to reach a certain critical mass of registered users on our website.

REVENUE MODEL
We will adopt two channels of revenue: Revenue as a percentage of Booking amount per transaction: This percentage will depend upon our collaboration with a given service provider. Advertising: There will be an insertion fee coupled with CPC (Cost Per Click) or PPC (Pay per click) model where advertisers pay each time a user clicks on their listing and is redirected to their website. They do not actually pay for the listing,

NTADBM Optimized Commuting Solution

but only when the listing is clicked on. This system allows advertising specialists to refine searches and gain information about their market. Under the Pay per click pricing system, advertisers pay for the right to be listed under a series of target rich words that direct relevant traffic to their website, and pay only when someone clicks on their listing which links directly to their website. CPC differs from CPV in that each click is paid for regardless of whether the user makes it to the target site.

Thus, overall Revenue model would be: Revenue = Where,

FINANCIAL PLAN
Our financial plan gives the detailed Balance sheet, Income Statement and Cash flow statement for the first 3 years. For first 3 years, NPV is negative with IRR at 7%. Projecting beyond 3 years gives a very high positive NPV with an untenable IRR of 51%. Thus, we see that it will not be feasible to project beyond first 3 years.

Financial plan for Projectv0.2.xlsx

LEGAL AND REGULATORY ENVIRONMENT

Our enterprise will be incorporated as a commercial enterprise under Indian Companies Act, 1956. Contracts with collaborators will be drawn and enforced according to legal provisions as defined by Indian Penal code. Since we are an Internet based business, we will operate our business in accord with IT Act, 2008.

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REFERENCES
www.google.com http://www.entrepreneurs-journey.com/105/making-money-from-your-websiteusing-advertising/ Smart Revenue Model Design by Teck Ho, UC Berkley www. Wikipedia.com www.drupal.org 29171192_1_online-travel-market-e-commerce-travel-insurance.htm www.makemytrip.com http://www.honestseo.com/ppc.html Indian_Travel_and_Tourism_Industry.asp.htm IAMAI Releases Internet Economy Watch 2012 Report: Shows Good Increase In Numbers 29171192_1_online-travel-market-e-commerce-travel-insurance.htm PCov_Detail.aspx.htm: Travel: an early adopter,Wed, 29 Feb 2012 expresscomputeronline.com