on the factors influencing the business case for next generation networks...
TRANSCRIPT
On the Factors Influencing the Business Case for Next Generation Networks
FITCE 2007 Warsaw
Joe Martucci, Anne Elvidge, Jerome VillezBT
Introduction
On the Factors Influencing the Business Case for Next Generation [email protected]
1 Drivers
2 Strategic Options
3 Benefits
4 Risk
5 Cost and Timescales
6 Evaluation
Conclusion
Agenda
On the Factors Influencing the Business Case for Next Generation [email protected]
Introduction
Analysis of factors influencing the business case for Next Generation Networks
This presentation explores the influencing factors behind the Next Generation Network business case by analysing the component parts of such a business case. The work draws on
BTs experience working with many different operators not just BT’s 21C
This work benefits from work done in the following areas:
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BTs 21C Next Generation Network as well as external consultancy
Analysis of cost and business modelling work done within BT Design
Our experience of what drives Operators to move to an NGN
• Lessons learnt through BT’s Global Venture NGN consultancy
• Cost modelling, Optimisation Modelling, Financial Modelling
• Different Operators will be influenced by different drivers
On the Factors Influencing the Business Case for Next Generation [email protected]
Drivers
Analysis of the drivers that push the business case for Next Generation Networks
Drivers will come from one of three general areas, Gaining Competitive Advantage, Keeping up with the Competition and Enforcement by Third Party Organisations. Any one of these can
drive the business case.
Drivers for change:
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Gaining Competitive Advantage
Keeping up with the Competition
Enforcement by Third Party Organisations
• Lower Costs, Better Quality, Greater Flexibility
• First Mover Advantage verses Wait and See and Move Later
• Offcom, Regulator
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On the Factors Influencing the Business Case for Next Generation [email protected]
Products
Markets
Existing
Existing New
New Product Development
MarketDevelopment
Diversification
Strategic Options
Having identified the driver for an NGN what strategy do you need to employ
Once the drive for an NGN is established work is required to define what that NGN should look like. Are market penetration and cost leadership a top priority or do product development and
integrated cost leadership/Differentiation strategies mean more?
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Economies of Scale
Reduced Operational Costs
Off the Shelf Equipment
Quicker to Market with Services
On the Factors Influencing the Business Case for Next Generation [email protected]
Benefits
Analysis of the benefits to be expected from moving to an NGN
The strategic option selected should lead to a set of tangible and measurable benefits that will later help to verify (or not) the success of the NGN venture
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General Categories in which the benefits of an NGN can be identified and measuredi
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Flexibility of Services
New Revenues and Market Segments
Better Customer Experience
On the Factors Influencing the Business Case for Next Generation [email protected]
Risks
4 Analysis of the risks that need to be monitored:
The downside of potential benefits are the risks involved in any venture. These need to be identified and an attempt made to measure their probability of occurrence and impact on the
overall NGN venture.
Strategic
Technological
Financial
Organisational and People
Risk areas:
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Cost Leadership and Differentiation, Brand
Maturing Technology
Large Investment, Cash Flow
Training, Processes, Restructuring, Morale
On the Factors Influencing the Business Case for Next Generation [email protected]
Cost and Timescales
5 Analysis of cost and timescale drivers for technology change
For this analysis the principle activity is to identify and understand the cost drivers that are influencing the NGN project primarily aimed at CAPEX and OPEX spend lifecycles but also
looking at potential revenues if a compelling case is not achieved on CAPEX and OPEX alone.
• Compare the do nothing case against introduction of NGN• Include cost of migrating legacy networks and running costs pre migration• Business Case; Establish the parameters and peak expenditure limits for the business case
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Revenues & Margin Pressures
• Costs• CAPEX• Free Cash• Peak Funding• Payback
£Business Case Parameters Next Generation Network
ScenarioDo Nothing
Scenario
Costs
Time
Co
st
Pre - Migration Platform
NGN Only Costs
On the Factors Influencing the Business Case for Next Generation [email protected]
Economies of Scale
Reduced Operational Costs
Off the Shelf Equipment
Quicker to Market with Services
Flexibility of Services
New Revenues and Market Segments
Better Customer Experience
Evaluation
Measurement of the benefits to be expected from moving to an NGN
The set of benefits previously identified need to be measured in order to verify the success (or failure) of the NGN venture – measure these before implementing your NGN!
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Benefits of an NGN and their units
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Unit Cost per Unit Volume
Opex Expenditure
Time, Cost, Quality
Lead Times
Portfolio
Revenue Streams
Customer Satisfaction Surveys
On the Factors Influencing the Business Case for Next Generation [email protected]
Conclusion
Identifies the factors influencing the business case for Next Generation Networks
This presentation has explored the influencing factors behind the Next Generation Network business case by analysing the component parts of such a business case. Though the six
steps will be common to every business, each case will be unique and reflect the importance an operator assigns to the different factors
The factors affecting an NGN business case have been outlined
Important Factors Differ for Each Operator
Drivers Not Just Financial
Many Benefits to be had but there are Risks to Manage
NGN Cost versus Business as Usual
Evaluation key to Determining Whether or Not an NGN is a Success
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Main Conclusions:
Name:
Surname:
Company:
Phone:
E-mail:
Joe
Martucci
BT
+44 (0)207 777 6465
Anne
Elvidge
BT
+44 (0)1248 360 186
Jerome
Villez
ZSTAR Expansion
+44 (0)7710 399 642
Personal Details
Feel free to give us a call to discuss anything in this presentation.