Quantifying and Delivering Value with Geospatial Network Infrastructure Management Solutions

Transcription

1 GITA Conference 2011 Quantifying and Delivering Value with Geospatial Network Infrastructure Management Solutions Scott Casey, GE Digital Energy Ross Smith, PA Consulting Group The information in this presentation and ROI Handbook are derived in whole or in part, under license, from the ROI Methodology of PA Consulting Group, Inc.

2 AGENDA Introduction and Background A Brief tour of the ROI Handbook & Supporting Tools Examples and Case Studies Question and Answer

3 Investment prioritization and justification are more relevant than ever Organizations are seeking to quantify specific and measurable return across all IT investments. As a result, many geospatial technology advocates face significant challenges to secure funding because: Senior leaders expect a strong economic (quantitative) business case to support all funding/budget requests Historic investment in technology applications may not have yielded tangible value that senior executives recognize Strategic technology investments are not high enough on the priority stack compared with other tactical initiatives that address short-term issues Lack of awareness of the value and benefit of exploiting network inventory information through all parts of the business

4 To support you with these challenges GE Smallworld have collaborated with PA Consulting Group and assembled our collective insights and experience, together with practical tools, to help you build more robust ROI-based business cases annual budget requests that win the support of executive decision makers. The ROI Handbook is relevant across the technology lifecycle including organizations: Whom have yet to have an established corporate network infrastructure management platform Those seeking to prioritize next steps to ensure current platforms fully deliver on their potential value Those seeking to upgrade to the latest versions of GE s network infrastructure management solutions

5 Geospatial Network Infrastructure Management Solutions and where they fit As the market evolves, network operators and service providers need to address several conflicting objectives: reduced cost, both CapEx and OpEx; increased network reliability; and improved customer service. In order to meet these three competing goals, operators need to: better manage their network infrastructure to ensure they more effectively utilize their network; plan cost-effective network upgrades that deliver; maintain their critical network assets; and operate the services running across the network.

6 Geospatial network infrastructure management solutions fill the needs, but are more than simply GIS tools Geospatial network infrastructure management system act as the master of record for an operators network infrastructure, in terms of assets, location, connectivity and capability play a key role in planning, constructing, operating, and maintaining critical network assets More than a traditional GIS technology development these industry-focused applications are foundational elements for supporting key business processes across multiple business units within the network operator helping design, construct, service, restore and maintain complex network assets throughout their entire life cycle

7 Generic role of Infrastructure Management Solution within Telecom Operations.having the right information available to the right people at the right time. Proactive & Reactive Work Customer Orders Order Management, Provisioning, Repair Customer Service Capital Projects Rebuilds, Upgrades Suppliers, Contractors External Gateway Planning, Engineering, Design, Construction Physical Inventory Create Inventory Logical Inventory Outside Plant Consume Inventory Inside Plant Use Data Trouble & Performance Management NOC Workflow Management Reporting (Scorecard)

8 Our intent here is to help you to make fact-based decisions about investments in geospatial solutions Specifically, this ROI Handbook will help you: to prove the value quantitatively so it is irrefutable (based in fact)? to communicate the value so people get it? e.g. to elicit an intuitive or emotional reaction to help drive toward the actual realization of value (measuring success, not just 'doing projects') to secure the right amount of funding; or spend what you know you have most effectively to help make/drive decision making about investment decisions, priority etc moving forward.

9 What s different about this approach?

10 The approach helps to answer 5 key questions asked by executives 1. How will the investment in a geospatial network solution impact revenue, costs; service levels; regulatory compliance, public safety and shareholder value etc; and how will it contribute to our overall business goals & objectives? 2. What are the capital and operational expenditures required, and what is the on-going cost of ownership? 3. When will we realize the expected benefits? 4. What resources are required to deliver, implement and sustain the solution in order to realize the benefits? 5. Is there a positive economic case?

11 What is it? Part Strategy and part Business Case Implementation Defining Organize the for Success Understanding Identify Business & Operational Program Portfolio the Gap: Imperatives Team Current Design Executive Building Proving Communication: the Quantifying a Program Multi-year the Economic the Benefits Budget Delivering Benefit Case Roadmap Forecast the vs Case Step 41 provides describes guidance Future State the necessary on how planning to build a Having In In 2 describes how to engage with senior steps In Step Step Step portfolio created 5, defined 8 that 7 we we are we provide of a discuss provide multi-year required projects the program guidance how an to that budget approach to (which lay will create on the collectively (the how is groundwork to a a investment) powerful to portfolio assess of The final step of the process is to consolidate modeling the key and the discrete illustration benefits business Step 3 readiness stakeholders determines of your the to identify current organization business their key to take deliver modeled projects) to the complete quantitatively the of required what value is Step to a geospatial benefits. going and be 4, delivered we incorporate to happen In provide network particular (the guidance using concepts expected we in pieces of information at the right level of abstraction for benefits) implementation Step a issues, major situation technology-enabled challenges, and creates goals a future and change objectives vision program, that infrastructure such decompose 6 we how benefits now to roadmap management the have forecast realization program the that key the demonstrates, into capital pieces solution curves, manageable and of operational and how Strategic confidence information quarter the executive team. Step 10 should be for required by cost factors, quarter, of delivers executing to to establish the those benefits an appropriate needed to delivery secure model the Plan expert calculate which and ROI-based witnesses, projects the parts. ROI. projects. are The aggregation of for the Business value-driver being In Step executed 9 we Case. trees explain and completeness and not the lynch pin in the final financial the more. costs commitment methods program The when of model the the -such individual including benefits we of as senior provide net projects will post-deployment present stakeholders. be is a delivered. robust will value create toolkit This (NPV) when a is multiyear operational rate budget of designed key return to in forecast the a (IRR), to that and it submission, where you cross your fingers and hope that internal has is been business change allow and for individual the management provide as entire usual insight benefits program. setting. into be the the budget is approved! If you have completed each different considerations flavors of ROI modeled. of models proposing and changes their relative to step appropriately, then you should already be confident strengths current business and weaknesses. processes that the senior leadership fully appreciate the benefits that the solution will deliver.

12 Customer viewpoint: When (and why) you might use this approach? Green Field Integration Departmental silos Merger & Acquisition Upgrade Replace Going Mobile Defense Against Cost Cutting Demonstrating risk of inaction Not just for one-off use. The approach is intended to help you sustain funding and value delivery over time.

13 The approach is participative and crossfunctional Recognizes this is a business transformation program, not a simple technology implementation Therefore, is necessary to secure the commitment of senior leaders and front-line staff Change management and regular communication across all levels begins at the outset

14 Consider the focus of an ROI and value based analysis Is it to communicate the value so people get it? e.g. to elicit an intuitive or emotional reaction to prove the value quantitatively so it is irrefutable (based in fact)? to help drive toward the actual realization of value (i.e. measuring success, not just doing projects ) to secure the right amount of funding to support your program to spend what you know you have most effectively, in the case of budget already allocated to you to help make/drive decision making about investment decisions, priorities etc moving forward All the above? The depth to which you perform the ROI analysis will depend on the primary reason you are conducting the analysis in the first place

15 Many organizations approach ROI by putting the investment first Most calculate what a particular investment will deliver in terms of benefit instead of determining what benefit they need to achieve for the business; and then follow a structured process for determining the right level and pace of investment that will achieve that level of benefit

16 Developing a metrics dashboard allows you to track many different metrics in a single place Allows you to track actual impact to the business Provides credible input into subsequent budget submissions Provides executives with tangible proof of the impact of the program Keeps the program benefits, not technology, focused

17 Examples and Case Studies

18 A completed example Program Objectives Business Design Factors: Current Desired Program Vision Project Delivery Structure Project Initiatives

19 And then these initiatives feed the budget forecast model and roadmap planning.. Program Blueprint Current & Future for the Busines s Design Business Objectives & Expected Benefits Practical initiatives Roadmap What needs to be done When it will be done Cost & Resources required OpEx, CapEx and FTEs Multi-year Budget Forecast

20 Cost of FTTH planning, design & documentation FTTH Connected Households by Region FTTH global landscape ~90M homes connected by 2012 FTTH network planning & documentation Average cost of FTTH network planning/document is 5% of overall cost of connection per home. averaging $1000 to $1650 By 2012 global cost of further 60M homes is approaching $5BN (5% of 100BN) Source: Heavy Reading Connected Households (Million) Cost of Network Planning & Documentation ($B) Total Global Cost of Network Planning & Documentation for FTTH Connections ($B) Year Year Americas AP EMEA Total Global Cost ($B)

21 FTTx Cost Comparison

22 FTTH Deployment Financial Analysis Example

23 Customer Process Improvements Major Telecom ILEC deploying FTTH solution has benchmarked two key FTTH plan/design processes 1. Service area analysis and creation 2. Detailed network design for a service area Recorded significant time/effort savings: 1. Service area creation: 60% improvement 90 minutes, previously 225 minutes 2. Network design: 94% improvement 4 minutes, previously 74 minutes

24 FTTH Planning & Design Tool Example

25 FTTH Solution ROI Results Customer 1 saw FTTH residential network planning reduced from 1 month to 3 days Customer 2 realized 70% saving on FTTH network design time Customer 3 saved 533k on the design of their FTTH networks across 80 planning areas 25

26 Conclusion We hope you have found the structured methodology and insights valuable. We wish you success in developing quantifiable business cases for geospatial network infrastructure management investments that in turn will drive indisputable business value for your organization. We are happy to provide on-site primer workshop on the methodology to you and your peers/leadership, targeted around your specific environment, challenges and goals. Please be sure to take a copy of the ROI Handbook!!

27 Questions m