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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

Everyone's tags (5)
5 REPLIES 5
Cisco Employee

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

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

Cisco Employee

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

 

Hi,

From where do these numbers come from?
7 FTE and a 18 month implementation time sounds _really_ high. Is this only NSO service-creation? in that case I think we must help them calculate the development time better.
I don't have any numbers to give you myself, let's set up a meeting with Markus Krahwinkel and see what we can come up with. Do any of these numbers come from external consultants?

If the services are pretty much the same as the ones we defined in the POC we have already proved that 2 inexperienced guys from KPN can do one service in 4 weeks time. add testing and brown-field deployment to that and I still dont think we would reach 6 months for one service.

/Martin

 

Cisco Employee

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

 

Hi Dirk-Jan,

 

Can you please reach out to me. Ton and I had yesterday a call with the project leader Emiel who has written the business case. He confirmed that to business case was written in a conservative way and he had some challenges to get approval for but he achieved it. Now Ton and I are facing Martin from Procurement who wants to gain commercial improvements from our offer.

 

I propose we have a call together with Ton so that I can see where you got this NSO price improvement request from.

 

 

Thanks,

Markus

 

Cisco Employee

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

Just like to comment on this kind of ask form the field.

There is a lack of validated competitive and business case analysis and tool for NSO.
I have developed my own so called “competitive analysis” on likes of Cenx and Cyan to work with AT(s) in building our tactical response to their completive threat in NA accounts.
But we need a lot more to have validate “kill sheets”, etc…

With regards to ROI tools the field have but together one such tool for NSO CPE cnfg mgmt use case.
We are trying to evolve the same tool to address Cell Backhaul automation use case as well.

Our latest challenge is to build a case for NSO to address Network Automation (not the same as service activation) use case for Aggregation Edge and Core network.
The issue here is that as you move from edge of the network towards the core the network change volume is less but impact of errors are much larger. So, “Labor efficiency” metric  (reducing FTEs) does not make a strong business justification.

Metrics below are more relevant but hard to quantify:
• increased network reliability
• Improved service quality scores
• Impact on reduction of Trouble Calls and Tickets
• Reduction of customer churn
• Penalties related to SLAs and Regulators
• Etc…


In most case my customers either don’t have good information on their operational KPIs or we cannot get to the people who may.

The ask here is for help in butting together a general business case for NSO Network Automation can be used as a starting point to validate with customers and get beyond the technical evaluation and into the business discussion with key buying decision makers and influencers. 

Cheers, babak

Cisco Employee

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

 

Babak, thanks for the elaboration.

We are at the point of rolling out a Consultative based selling training that covers concrete use cases, business case analysis templates, industry benchmark data etc.

 

The training is aimed at our internal and external MANO specialist that need to articulate the economic benefits of our MANO platforms to the customer decision makers.

 

It’s a two days training, in person delivered by a MANO expert and business consultant. The training has a small price tag. The training provides an opportunity to our experts to develop their business consulting skills.

 

A communication on this will follow soon.

Regards,

Tony

 

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