Figure 13. Cash Flow Direction

However, the solutions provided are going in a passenger-centric direction. Therefore, these passengers need to interact more and more with SITA’s solutions. SITA’s products will provide value for both customers and passengers in the form of time and simplicity. This means that both the passenger and the customer need to be kept in mind in the designing process. On top of that, the focus of the solutions is software focussed instead of hardware. For this, we recommend looking into User-Centric Design and the lean startup model and using a combination of the two methodologies. More about these methodologies can be read in Appendix 16: UCD and the lean startup model.

Financial

The provided solution of this report has a different earning model than the licensing model that SITA is used to. In Figure 2 the complete system map of SITA is depicted, the cash flow directions have been simplified in Figure 13.

• DCS

The M-DCS can be licensed to the cruise industry in a similar way as L-DCS system are licensed to airports . The costs associated with it are R&D and IT operational costs. Additional sources of revenue are additional analytic services based on a subscription model.

• Delivery service

The delivery service has its costs associated with deliveries. However, the cost per delivery does not increase with more luggage. These costs are directly associated with the travel distance. When the quantity of bags is high, the cost of delivery per bag drops. There are multiple ways to come up with a payment plan. The first one is to pay per luggage using a fixed bulk price calculated by using estimations of the amount that will be delivered that year. With this option, the risk is at the delivery service when passengers are not willing to take the service for whatever reason. The costs can directly be referred to the passenger with a profit margin on top for SITA. The cruise and aviation industry do not require a profit on this since they can provide extra value to their passengers for free without putting in any effort. On top of that, they can upsell other products and services easier now that they know even more about the passenger whereabouts. The second option is, pay per vehicle, where SITA pays for the number of vehicles needed for the luggage. This way, the delivery service provider earns a profit margin each time a vehicle and personal is needed. The risk is on SITA when the service is not used efficiently. However, because of the change of risk, costs are a lot lower, and therefore, possible profit is higher. Therefore, we recommend a pay per luggage method which generates profit without the high level of risk.

• Up-sales

The cruise and aviation industry are more aware of the passengers whereabout. Therefore up-sales could be made, e.g. waiting in the lounge when it is known there is a delay somewhere. However, these sales are not directly made by using SITA’s software but indirectly due to decision-making based on insights generated by SITA. The pricing model for this software can be similar to pricing models CRM systems and other SAAS products use. This model includes a flat fee for enterprises, giving unlimited numbers of users. On top of this flat fee, modular pricing can be used for each integration, feature or anything specific (Pingrey, 2021).

Figure 13.Cash Flow Direction