NCS CAPEX vs OPEX

[khgrant]

I have seen slides that show OPEX is often 80% of 5 years TCO and that 45% of OPEX is configuration and activation.  Where did we get this data?

[khgrant]

If its the same slides I’ve seen the source is NSN (now Nokia)

[khgrant]

I won’t believe these numbers but again it depends on the context.

Thought the years, each time I see the word OPEX I get irritated because we lump (and customers too) so much in it and actually often times no one have a clue what is the break down of OPEX. Will you include an operator bozo that finger typed something that brought an entire network or a region down? Truck rolls a big OPEX thing, etc. etc. etc.

So I always see these numbers with a very suspicious eyes unless someone can truly break them down. Have fun and just ask your Ops or X customer: what is your OPEX this year for managing and operation your region and you will see.

Having said this and in the context of Tail-f NCS, I believe I raised these few months ago: is a specific TCO/ROI model for service modeling and activation compared to tradition OSS/BSS systems (sorry lumping a lot under OSS/BSS).

Few people ran with this ask but haven’t see any output yet?

[khgrant]

Please check with the Service Provider Transformation team. They have done modeling of TCO – which has been well received by a customer or two.

[khgrant · Accepted solution]

The devil is in the details, as always. During my management consulting times I did a lot of SP process analysis. Below a simple snapshot of a results for the fulfillment process broken into high-level process steps.

This is for the delivery of L3 VPNs. Stating one single OPEX avoidance figure is not such a good thing to do because each SP is different. As different levels of automation and manual tasks. Also the delivery of bespoke versus highly standardized services has a big impact on the possible cost to avoid. One more thing, focusing only on cost avoidance is not so wise to do, depends on the SP audience you are talking to. Implementing the principles for modularity which is done through NSO can have several positive impacts:

• Beside the cost avoidance which might be minimal for some SPs shrinking the fulfillment
  process means better Lead-to-Cash (L2C) figures and improved Cash flow.
• Reusing Service Modules means faster TTM, benefiting from fast mover advantage and
  increased market share. Hence more revenue, better competitive position.
• Because of the use of NSO, fewer bad / wrong service activations are made resulting in
  fewer TT for Service Operations.

In essence, one has to look at the total picture to talk in relevant terms with SP execs.

We are working on a sales enablement training that will cover all these aspects. Stay tuned for this. Thanks