In a technology-focused environment it is possible to conclude that building the business case for IP transformation is all about the network, the technology and the associated spend. That would be a mistake. To build an effective business case network operators must take into account the complexity of the program and its far reaching impact on their business.
The business case validates and supports the transformation activity. As the network operator invests (both capex and opex), the business case demonstrates the feasibility of the exercise and also that the tangible benefits (the return on investment) warrant the expenditures and opportunity cost. IP Transformation isn’t easy, but a well-executed strategy based on a strong business case will result in years of tangible benefits for your business.
IP Transformation: Steps to Success
The first challenge is to justify the costs. It is crucial to determine how the company is going to realize a return on the money invested.
There are 3 essential activities you should complete first in order to build a strong business case:
- Undertake a careful examination of overall investment needs.
- Develop an understanding of why your company would embark upon such a large, complex and potentially risky change program.
- Establish a clear view of anticipated benefits to be tracked and managed.
Build a Better Business Case
In my experience, only those business cases that took into account the ‘big picture’ really stood the test of time, and were not revisited or even scrapped during the delivery program.
The current services portfolio and future roadmap for sales offerings must be understood and modeled. Without it, the company is embarking upon change without understanding its very purpose: what it sells, to whom it sells, where, when and how. This applies equally in strategic industries, such as energy distribution and transportation, where infrastructure services are provided to support business and engineering applications.
Why is this so hard to achieve, and so often ignored? There are several reasons that need to be addressed.
#1. Get the Right Sponsors
Sponsors are often technology focused, and they primarily see the feature roadmap and decommissioning benefits. They tend to ignore the wider organizational stakeholder needs and benefits. The technological benefits of change rarely justify the investment on their own. It takes a holistic set of benefits to make the numbers work.
Also, the portfolio is often fragmented across the business, and pulling together the roadmap is seen as almost impossible. This is not an insignificant undertaking, but it is a necessary cost if the real benefits are to be understood and realized.
#2. Do a Technology Audit
The next step is to understand the current technology baseline, and the level of change that is required. This includes not only the physical network assets, but also the data models, the logical service layer, and the associated OSS and BSS changes.
In many cases, a multi-pronged approach to audit is required. This will cumulatively drive a deeper understanding of the known starting position and give a baseline for planning the investment in network and IT change.
Coordinating these technology efforts, driven by different organizations, but with dependent outcomes, takes significant effort and forethought. Only when they are delivered as a combined view can you truly understand the technology roadmap costs.
#3. Establish Good Governance
In parallel to the network change you must determine the scope and effort required to smoothly and quickly migrate the network and IT operations environments. This audit is driven by a different stakeholder base, with their business-as-usual demands and their own drivers for influencing the network and IT change.
I have witnessed several instances of C-levels operating in ‘splendid isolation’ at this stage, and later wondering why the dependencies between Operations, IT and network change were not planned in when considering the business case.
You must impose strict governance and coordination to plan the roadmap, appease all the stakeholders, and identify the true requirements and costs of operations uplift.
#4. Get Full Corporate Visibility
Any financing should take into account the wider business. What parallel investments are occurring elsewhere? Can they be leveraged, or are they going to impede the change program, and cost the company time and money, or cause blocking dependencies later?
In one particular case, I witnessed HR releasing resources through a funded early retirement plan, only for the change program to hire back those very same resources as contactors. This went on for 18 months, with both programs claiming success against their own measures.
Such company investment programs running in isolation are not uncommon. Early analysis can identify dependencies, and save enormous financial impacts later.
IP Transformation: It’s a Journey
Make your business case first, before you embark on your IP Transformation journey. It gives you the map, which then provides the route and directions for the program’s journey. Like any seasoned traveler, I have learned that a sound map and a route marked with clear waypoints is a pre-requisite before setting out. The white paper, “Better Business Case Management for IP Transformation” outlines these ideas in more detail.
Watch for our next blog, The business case for IP Transformation: Managing the service roadmap.
By Steve Blackshaw, IP Transformation Product Line Management, Alcatel-Lucent
In his role as Senior Director of IP Transformation at Alcatel-Lucent, Steve Blackshaw leads large-scale network evolution and transformation programs for some of the world’s largest telecommunications service providers.