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khgrant
Cisco Employee

High Level Business Case and Financial Ratios for Tail-f NSO implementation

Hi,

We're struggling with KPN on selling Tail-f NSO and the implementation.
The services are L2VPN, PW and L3VPN on ASR9000 and ME3600X.


KPN has made the following business case;

CapEx for Tail-f NSO: 800k€ + OpEx for implementing NSO: 7 FTE: 700k€ (So total investment: 1,5M€)
Savings: 23 FTE (2,3M€)
The implementation will take about 18 months, so the investment is now and the savings are 36 months from now.
KPN now claims that this a bad ROI and wants us to drop the price of NSO to make the ROI better.


So this is their business case, we don't really have any reference material to challenge their assumptions (the 7 FTE for implementation, the implementation timelines and the savings).
Does anybody have some high level financial ratios for a Tail-f implementation that gives us some benchmarks to challenge KPN?


We're especially looking for:
- NSO CapEx vs. # of FTE for implementation
- Average Implementation timelines for L2/L3VPN and PW
- Savings and ROI

Actual numbers can be replied in unicast and will not be shared with the customer or any distributed further. It's just for us (the account team).


Met vriendelijke groet/With kind regard,

Dirk-Jan van Helmond

5 REPLIES 5
khgrant
Cisco Employee

Dirk-Jan,

I guess KPN hasn’t shared you their actual calculations?
Not sure where the 18 months implementation comes from and whether this is actually the overall transformation including business process optimization and org changes.
There are different mechanism we can use to adjust initial CAPEX but more information is needed around the actual use cases and the business problem we intend to solve.

Let’s setup a call with Markus Krahwinkel to discuss.

Regards,
Tony

khgrant
Cisco Employee