the business case of automation · 2019. 6. 27. · “the industry-leading cisco nso will...
TRANSCRIPT
-
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
-
© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public
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
-
© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public
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
-
© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public
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
-
© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public
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.”
-
© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public
Economics of network automation
-
© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public
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
-
© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public
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
-
© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public
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
-
© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public
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
-
© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public
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
-
© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public
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(%
)
-
© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public
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
-
© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public
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%
-
© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public
$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
-
© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public
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%,
-
© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public
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
-
© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public
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
-
© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public
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
-
© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public
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.
-
© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public
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
-
© 2019 Cisco and/or its affiliates. All rights reserved. Cisco Public
• 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