Last week, we started a guide for building a business case for Gigabit deployment. After creating an Executive Brief, the next step is to write up an Introduction. This is the section where you outline the business drivers motivating deployment, detail the scope of service, and set financial metrics that will be used to monitor progress. These pieces come together to form an initial picture for stakeholders to consider.
Business Drivers
When it comes to business drivers, it’s best to keep in mind the perspective of the audience, company stakeholders, key departments, customers, and the overall organization’s perspective.
A typical business driver for Gigabit service projects is demographic change. For example, Millennials may impact demand as they age and become homeowners, progressing as leaders in the workforce. These new millennial residential customers demand more and more bandwidth, and they expect their connections to always be high quality.
Meanwhile, businesses have begun utilizing mobile workforces to attract and keep emerging talent. In addition to demographic changes, competitive pressures are driving Gigabit projects as well. Specifically, telecoms in more deregulated environments want to be the first to move with Gigabit service. Commercial businesses are also demanding Gigabit for the numerous third-party cloud services they use for ongoing operations. Consider also the medical community, which is now fully digital with x-rays, photos, videos, 3D ultrasounds that require enormous bandwidth in order to share vital medical records in a timely manner.
Your specific business drivers may include these or others unique to your community; what’s important is that you document as many of these as possible to help build the case for your project.
Scope
The scope should reflect the parameters of the project: the boundaries of the project: length of time for the project, portion of service area to cover, capital budget to allocate, projected customer take, and personnel resources needed. Most Gigabit service builds will eventually span the entire telecom service area. This may not happen for many years; if this is the case, be sure to clearly state this in the scope section of the introduction.
For a narrow scope, there are several ways to consider phasing in Gigabit service. The project could first look to build in a projected high take rate residential area. These can be identified with demographic data overlaying outside plant facilities and service areas. Marketing could proactively reach out to a set of customers to gauge the interest in Gigabit service and determine their expectations for the service cost. You might instead narrow the scope by looking at the high take rate of commercial businesses. Maybe there’s a section of the community with more technology-oriented industries, or more mobile workforce that would be interested in Gigabit services. Education and medical organizations are good targets because many have high bandwidth needs and would take advantage of Gigabit services.
If the drivers are competitive, then one goal may be to build preemptively in competitive service areas to stifle competition. Additionally, an area of the network facing particular churn and quality changes could be a potential target for the scope.
Many of these factors that can narrow the parameters the project can be combined together, especially in the case of building in areas where it may be less expensive given geography, rights of way, and existing plant to use. Another factor to consider is “where can builds be completed or service initiated quicker?” These may become more important given competitive pressures or community needs.
Financial Metrics
Develop a habit of evaluating the financial metrics of the project regularly; not just the total budget but also interim metrics that can be tracked during the project to communicate to stakeholders. There are best practice metrics to collect and compare to past FTTH and Gigabit service projects. The goal with metric collection is to make small course changes when/if necessary, but also to confirm and reinforce the business drivers.
As the project progresses, a number of key financial metrics must be monitored to provide insight into whether changes should be made to the project; either by increasing the scope and speed, or shifting focus. Deployment costs and the breakdown by crews, new customer premise equipment deployments, and geographic area are all important metrics to track. Many of the factors and drivers used to determine the scope of the project can be validated or invalidated by these metrics.
It is critical to track the revenue from both the service and the existing services that may be benefiting (or being cannibalized) from a new Gigabit tier of service. When considering the return on investment for the project–besides the specific revenues coming in from the new tier–many telecoms see upticks in lower speed levels of service as the awareness push of the Gigabit service brings new levels of awareness for complimentary services. It’s important to monitor complimentary service revenue and attribute changes to the Gigabit service project, particularly when building in areas where the take rate may be slower.
Another metric to watch is the time to breakeven for a new customer. As many telecoms have completed FTTN builds, the costs of offering Gigabit service are directly traceable to the specific customer. These costs can be averaged across demographic types or geographic areas, and when combined with the service revenue, will provide a time until the project breaks even for each customer. Those metrics are important as sales looks to structure service offerings and marketing factors in the cost to acquire new customers.
Once you’ve created the Introduction for your Business Case using this outline, you’re ready to being the Analysis Section. This will be the largest portion, so next week we will focus on documenting Assumptions before moving onto other areas to discuss during Analysis.