the business case of automation · 2019. 6. 27. · “the industry-leading cisco nso will...

João Serrano

June 20th 2019

The business case of automation

© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public

Agenda

• The business advantage of automation

• Economics of network automation

• Success Stories

• Planning your automation story

• Conclusion

• Q & A

© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public

The business advantage of automation


The automation drive

• Increasing number of complex technologies

• Increasing scale

• Skills shortage

• Faster time to market

• Differentiationdemand

• Security focus

• Reduce Opex

• Reduce human errors

• Account RoI of technology investment with business outcomes

Complexity Quality Economics


OpEx Spent on Network Changes and Troubleshooting

Policy Violations Due to Human Error

Network Changes Performed Manually

Current operating models aren’t working

95% 70% 75%

$60B Spent on Network Operations Labor and ToolsSource: McKinsey study conducted for Cisco in 2016


Full Service Lifecycle Management

Model Driven

Real Time Services

Multi Vendor, MultiService Type Support

Rich Set of Northbound API’s

Network-wideUnified (CLI)

Speed

Automation

Flexibility

Simplifying complexity and improving quality


Gartner

“IT operations leaders should avoid ad hoc, automation implementations that result in expensive mistakes. Instead, follow a systematic approach that maximizes automation's benefits of agility and reducing cost.”


Economics of network automation


Presentation ID

Making the business case of the automation investment

Value of Automation

Cost Of Automation

SLA Violations

MOP

MTTR

Truck Rolls

Software

Integration

DevOps TeamHow much is it saving me and

where?

How much does it cost me to own this

on a recurring basis?

Cost ofAutomation


Define our outcomes: use cases

An automation use case is a set of technical actions that map to a business outcome• An use case is the budget driver • An use case can go across different devices and software platforms• A good definition of use cases is critical for business case

qualification and healthy project execution


Defining KPIs and measurement points

Every organization uniqueness should be reflected in it’s KPIs, but also its alignment with industry standardsKPIs should be:• SMART: specific, measurable, assignable, realistic, time-related• Self governing minimizing human bias• Homogeneous and interrelated across the organization


Examples of KPIs

KPI Value per current processValue per new

process How to measure it

Change control 3 weeks per device 30 min Session logs

Pre check for MW 20 min per Mw 5 min Session logsConfig of port 15 min per Port 1 min Session logs

Post check for sub interface 15 min per sub interface 1 min Session logsPost check for ports 15 min per port 1min Session logs

Post implementation closurefor port

15 min per port5 min Session logs

Post implementation closurefor MW 5 min per MW 1 min Session logs

Post check for MW 20 min per MW 1 min Session logs


Identifying and qualifying the relevant automation use cases

Use CasesValidation Business Case Elaboration

Deliverable

Prioritization

Environment ReviewQuestionaire Analyze Automation Potential

“As-is” Use Case Description

For up to XUse Cases

Quantify Automation Benefits

Summarize Business Impact

Business Case Summary

Cost-Benefit Model


Prioritize Impact of Automation Automation Impact on Opex

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

10-18%

10-16%

5-13%

3-7%

2-10%

Before Automation

After Automation

Change Request

New AddDisconnect

Incidents

MOP

Automation Journey

50-60% improvement in Opex

Ope

x(%

)


15

Presentation ID

Services OpEx Share Breakdown50-70% of Service & Network Ops are Impacted by Automation

Change Order

Highly RelevantSome RelevanceLess Relevant

Service Based OpEx Breakdown

5%

Order Process

Operating Cost

New Customer Add

5% 11%

Change Request

Relevance to Automation via NSO

Incident Resolution

Service provisioning

21%

ConfigValidation

15%

Network Configuration

14%

CPE Install

30%

Order Entry

...

Change Order call

12%

Troubleshooting

8% 11%

Service provisioning

37%Config

Validation

23%

Service Disconnect

Resolution Verification

5%

Trouble Ticketing


OpEx Reduction & Efficiency

Source: Cisco BTA

Operating Cost

New Customer Add Change RequestIncident ResolutionMOP/ Maintenance

Window

Based on averages across mobile, cable, telco and DC providers*North bound API for portal and service order entry provides additional benefits

Operation % of ServiceOp Cost

OpsImprovement

Customer* order 7% 80%

Order Entry* 6% 77%Order

processing 10% 80%Config

Validation 20% 93%Service

Provisioning 14% 90%Network

Configuration 13% 78%CPE Install -

TTU 29% 0%

Highly RelevantSome RelevanceLess Relevant

Relevance to Automation via NSO

Operation % of service Op Cost

OpsImprovement

Change order* 5% 67%

Order Entry* 5% 67%Order

processing 11% 86%Config

Validation 21% 93%Service

Provisioning 15% 90%Network

Configuration 14% 78%CPE Install -

TTU 30% 0%

Operation % of service Op

Cost

OpsImprovement

Trouble Call* 12% 80%Ticket

Generation* 8% 71%Troubleshooti

ng 15% 53%Config

Validation 37% 94%Re-

Provisioning 23% 90%ResolutionVerification 5% 50%

Operation % of service Op Cost

OpsImprovement

Change order 4.6% 67%Route Order 9.1% 45%Analyze order 13% 50%Config template update 18% 93%Network Configuration 50% 90%Documentchanges 5% 78%


$501K $562K $216K $1.5MCost Savings

Use Case 1 Use Case 2 Use Case 3 SW Development

$2.8M* Total Savings

74% Average Time Savings Time Savings

20%** 95%89% 92%Use Case 1 Use Case 3 SW Development

144,260 Man-hours SavedMan-hour Savings

10,985 68,66032,661 31,954Use Case 1 Use Case 2 Use Case 3 SW Development

Use Case 2

*Year 1 savings**Includes New Add, Change request, disconnects

Example of Operational Metrics Summary


Revenue Uplift – Additional Benefits

T O T A L - 5 Y E A R S

REVENUE UPLIFT FROM AUTOMATION

Efficiency Revenue Uplift Churn Revenue Uplift Backlog revenue Uplift

10%

Backlog Revenue

Uplift

68%

Efficiency Revenue

Uplift

21%

Churn Revenue

Uplift

• Revenue – Service 1– $842, Service 2- $1158• Provisioning Efficiency – 61%, New add

@50% of 61%, • Backlog Revenue –Backlog reduction- 30%• Churn Reduction –, Churn-10%, Controlled

Churn- 40%, Reduction – 50%,


28%

Subscriber Acquisition Cost (SAC)

28%

3rd Party Fees

44%

Truck Rolls -Incidents

T O T A L - 5 Y E A R S

COST SAVINGS FROM AUTOMATION3rd Party Fee - Install Truck Roll - incidents SAC

• 3rd party fees – Service1 – 300, Service 2–1000 per month, Avg 2 trips per customer, Fee per install - $90

• Truck Rolls – 20% incidents of installs, avgtrip per customer – 2, Fee - $90 per trip

• SAC – SAC cost - $200, Retained customers via churn reduction allocated to SAC cost avoidance


Operational Efficiency

Increased Revenue

Time to Revenue

Incident Resolution

Reduced Backlogs

+70%

- 60%

- 40%

- 60%

+30%

Source: *Industry average based on multiple use cases and customer engagementsSPs - 30+ service provider use cases, Telco, Mobile, Cable, Cloud and Backhaul providersServices: Wireless backhaul, L2VPN/Ethernet, L3VPN, SD-WAN, Broadband, VOIP, DC InterconnectOperations Analyzed: New Customer Add, Change request, Service disconnect, Incident ResolutionBacklog: 200-1300 Orders in the backlog (40-60% of those are due to technology validation), the rest are due to lack of operation folks to provision the customer

ROI

88–738%

Savings

$3–70M*

12 Month Payback Savings (based on Customer Interviews)

• 5 Year savings. ROI Based on assumption on the network devices to be managed, device and service models that need to be developed. Included additional revenue uplift from improvement in new customer add

Business Value of Network Automation


Automation Business Benefits –Exec Summary

144,260Man-Hours available to address other pending

activities*

95%Efficient SW

development cycle

22kTransactions/year

74%Efficiency in network

operations


Telefonica Global Services

KPI From To

Integration of a new router 4 hours 7 minutesConfiguration of a new trunk link 45 minutes 2 minutes

VPN configuration 60 minutes 15 minuntes

BGP full mesh 2 hours 50 seconds

“The industry-leading Cisco NSO will significantly enhance the automation, agility and reliabilityof our network, while accelerating new service delivery from months to minutes with

automated, on-demand service provisioning. Furthermore, it will allow to put in place new B2B services with a faster time to market, increasing efficiency and service quality for its global

customers”

Cisco’s NSO (Network Services Orchestrator) for automating and configuring our IP infrastructure and business customer premises equipment.


Network migration: an efficient practical exampleEstimate for Migrating 1 Interface with 10 services

Activity From To Savings

Pre-check 5 minutes 7 minutes 0Interface move 2 minutes 2 minutes 0

Configuration push on target device 2 minutes 2 minutes 0

Remote configuration update 20 minutes 5 minutes 15 minutes

Configuration clean up 2 minutes 0 2 minutes

Post check 10 minutes 10 minutes 0

Total Time taken 41 minutes 24 minutes 17 minutes

Activity From To

15 interfaces, 150 services move

41 x 15 = 615 minutes

24 x 15 = 360 minutes

Communication/coordination (with NOC, cabling teams), minor issues 60 minutes 60 minutes

Total window time/efforts665 minutes (11 hours)

420 minutes (7 hours)

Troubleshooting Variable Variable

30% savings


• Make sure your organization understands automation tools and processes

• Establish a framework planning your internal capabilities and organization governance

• Identify and qualify your use cases: automate repetitive tasks, streamline processes, automate processes

• Standardize your services, tools and processes before you start

• Build a roadmap:• plan ahead to maximize your early wins• break your journey in small deliveries, build step by step• establish KPIs and measure and report accurately

Key steps for the automation journey

Automation is not a destination but a continuous evolution

the business case of automation · 2019. 6. 27. · “the industry-leading cisco nso will...

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