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CASE STUDY ONE: Strategic Business Partnership for Multi-Million Dollar Expansion of IBM's Government Market
Objective
Establish and build a stable market for North Communications' pioneering public access, interactive kiosk products and services (late 1980s).
Strategy:
Identify a significant industry vertical with needs that could be met by North Communications' kiosk products and services with their capability to advertise, collect or dispense information, and accept money for services. The Business Development team recognized the opportunity in the "public sector" where the President had established a "Reinventing Government" initiative in response to budget cuts.
- Public access kiosk products and services could provide services to citizens in a more cost effective and also more convenient way than the traditional telephone and government office visit. The mission was to deliver government services how and when people needed them by placing kiosks where people live and shop so that acquiring government forms or information would be as convenient as shopping for groceries.
- A public-private sector business model was developed whereby government and business would share the costs of deploying the networks. In return, government would pay the kiosk network a modest fee for services rendered to citizens. The partnership would also generate revenue from certain activities including context-sensitive advertising of relative private sector services.
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InfoCalifornia
CNN, NBC and local television news coverage of the prototype launch of InfoCalifornia, the statewide network of online, transactional touchscreen kiosks developed by North Communications and IBM Corporation in 1989.
Tactics:
North Communications was a promising, but undercapitalized young company. It needed strong connected partners with a sales force and service organization to grow and complement its products and design and production expertise.
- Venture capital was raised against a five-year plan of international scope.
- A strategic alliance was forged with IBM, whereby North became an official 'Business Partner."
With the decline in Mainframe sales, IBM sought new products and services to expand the public sector
market. As a result of this relationship:
- North collaborated with IBM to develop the "InfoMedia" branded line of kiosk hardware and software products, backed by an IBM service contract.
- A sales incentive package and educational program were created for the IBM public sector sales force.
- Joint sales calls were made to launch a number of pilot programs around the U.S. and abroad, the most well known being InfoCalifornia.
Implementation
To enable the private-public sector partnership business model, the InfoCalifornia team facilitated a number of pioneering activities. These included lobbying the State Legislature, which passed supporting legislation and set standards, which laid the groundwork for public access to government via the Internet and other interactive methods.
These groundbreaking landmarks included:
- Legislation allowing the first use of credit cards for payments to government.
- Setting ADA standards for handicapped access to electronic terminals.
- The first 24/7 public access to federal, state and local government information and services at a single terminal, eliminating the barriers between the various branches of government.
- The first use of a public-private partnership to fund provision of government services.
- The first advertisements on public sector interactive kiosks.
- The first availability of personalized government information and services in the language of citizen choice.
click here to view
Note: You must have Quicktime to view this movie.
Congressional Showcase
Coverage of a public event held in the rotunda of the Rayburn Building, Capitol Hill, Washington DC,
sponsored by North Communications, Metromedia and IBM; attended by many Senators, Congressmen, Agency
officials and Administration staff.
The public access interactive kiosk pilot provided more than 150 federal, state, county and city government services in a touch-screen format. Kiosk users could review job listings, renew a driver's license, register a car, attain a copy of a birth certificate, reserve space at public recreational facilities, and get information on subjects that included taxes, transportation, education, travel, and health. To make the kiosks user-friendly, information was sorted by topics, including auctions, citizenship, driver's licenses, elected officials, events, small business, taxes and voter registration. As a result of the success of InfoCalifornia (60% of usage outside of normal business hours), government kiosks were deployed worldwide including Singapore, Malaysia, and Australia. Interagency networks were deployed across the United States including New York, Arizona, Texas, Kansas, Nebraska, California, and Hawaii.
Success Metrics
Business Model Example (Recruiting)
The Texas Employment Commission (TEC) calculated that it took an employee almost an hour to process an
unemployment applicant through paperwork and a job database search at a cost to TEC of $125. The
InfoTexas private-public partnership charged TEC only $15 per applicant and completed the
process at the kiosk in a supermarket or shopping center, more effectively in under 12 minutes.
InfoTexas also sold context-sensitive 15 second advertising spots. For example, once the user had
completed the TEC online form, he or she then searched the job database. Predicated on education
qualifications, if there were no suitable jobs in the database, the user was given the option of
pre-qualifying either for military service or for Kelly Temporary Services. After viewing the relevant
"Infomercial" and filling out online forms, the user was referred to the most convenient office by zip
code. InfoTexas generated revenue both from the advertisements each time they were viewed, but also for
each qualified referral.
Cost Saving Example
In Tulare County, California, 85% of applications for Food Stamps, Medicare and Aid to Families with
Dependant Children (AFDC) were handled by the applicants themselves at the multimedia terminal.
Reduction in staff time saved the county $108M over 6 years on a $3.2M investment and allowed for
continued and improved provision of welfare services against a backdrop of ongoing budget cuts.
North Communications laid the groundwork for today's fully interactive public access to government via
all means, including the Internet, by helping craft essential legislation, standards, user interface,
interaction models, and innovative public-private partnerships.
Kiosk Infomedia Products
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