value calculators in sales 121023
TRANSCRIPT
Value Calculators - in SalesSession 1: Value Calculator Quickstart
Ericsson Internal | 2012-10-15 | Page 2
How to Join› EVERYBODY
– Connect with Lync – Join online meeting– No audio
› If you have VIDEO– Polycom system directory– Connect to:– SE KI 11 01 049 (8) Petunian
› Without video– Use audio conference– Dial-In: 89920 ECN Short number– Passcode: 7393 447#
› My mobile number– +46 730 312 376
Value Calculators - in SalesSession 1: Value Calculator Quick start
Ericsson Internal | 2012-10-15 | Page 3
Technology checkPlease answer the following question in the chat:
What is your experience with Value Calculators?
a) I have done and presented a Value Calculator to a customerb) I have presented Value Argumentation including money to a customerc) I have done Value Calculators or value argumentation, but not really
presented them to a customerd) I have not done any Value Calculators before, but I have taken the
financial traininge) I have not done any Value Calculators before and have not take the
financial training
Ericsson Internal | 2012-10-15 | Page 4
About this course› No course -> Training› No Finance -> Sales› 3 Sessions
– Quick start– In depth– Tools and sources
› Format– Many exercises– Repetition– Questions in chat– Breaks
Value Calculators - in SalesSession 1: Value Calculator Quick start
Ericsson Internal | 2012-10-15 | Page 5
Agenda› Introduction› Benefitting sales› Value Calculator Technicalities› Next sessions
Ericsson Internal | 2012-10-15 | Page 6
Introduce YourselvesCourse exercise
Ericsson Internal | 2012-10-15 | Page 7
INSTRUCTIONS
› 15 minutes
› Focus on telling each other what kind of Value Calculator activities you have been involved in and your experience.
› Write key words on a slide and send to me, [email protected]. I will distribute to all participants.
POWER POINT TEMPLATE
› Name?› Working position?
› Experience in building and using Value Calculators?
› How will you use the knowledge this course will give in your daily work?
Ericsson Internal | 2012-10-15 | Page 8
Agenda› Introduction› Benefitting sales
– Proving Value– Mitigating risk– Engage with C-level– Block competition
› Value Calculator Technicalities› Next sessions
Ericsson Internal | 2012-10-15 | Page 9
Benefitting Sales› Proving value
› Mitigating risk
› Engage with C-level
› Block competition
Ericsson Internal | 2012-10-15 | Page 10
Benefitting Sales› Proving value
› Mitigating risk
› Engage with C-level
› Block competition
Ericsson Internal | 2012-10-15 | Page 11
+ $
- $
Why buy?
Investment case
Ericsson Internal | 2012-10-15 | Page 12
+ $
- $
Why Ericsson?
Marginal case
Ericsson Internal | 2012-10-15 | Page 13
Benefitting Sales› Proving value
› Mitigating risk
› Engage with C-level
› Block competition
Ericsson Internal | 2012-10-15 | Page 14
Benefitting Sales› Proving value
› Mitigating risk
› Engage with C-level
› Block competition
Ericsson Internal | 2012-10-15 | Page 15
Benefitting Sales› Proving value
› Mitigating risk
› Engage with C-level
› Block competition
Ericsson Internal | 2012-10-15 | Page 16
Purpose of the Value CalculatorCourse exercise
Ericsson Internal | 2012-10-15 | Page 17
INSTRUCTIONS
› What is most important in the form and format of a Value Calculator that mainly shall:
– Prove value– Mitigate risk– Engage with C-level– Block competition
› Write each purpose on the wall› 10 min. for yellow stickers› 10 min. to discuss and choose top
2 per purpose
PRESENTATION TEMPLATE
Most important, when to:› Prove value
– 1…– 2…
› Mitigate risk– 1…– 2…
› Engage with C-level– 1…– 2…
› Block competition– 1…– 2…
Ericsson Internal | 2012-10-15 | Page 18
PRESENTATIONS
› Group A. What is most important when to Prove value– 1…– 2…
› Group B. What is most important when to Mitigate risk– 1…– 2…
› Group C. What is most important when to Engage with C-level– 1…– 2…
› Group D. What is most important when to Block competition– 1…– 2…
Ericsson Internal | 2012-10-15 | Page 20
Agenda› Introduction› Benefitting sales› Value Calculator Technicalities
– Revenues– CAPEX– OPEX
› Next sessions
Ericsson Internal | 2012-10-15 | Page 21
Value Calculator Technicalities
› Revenues
› CAPEX
› OPEX
Ericsson Internal | 2012-10-15 | Page 22
Value Calculator Technicalities
› Revenues
› CAPEX
› OPEX
Ericsson Internal | 2012-10-15 | Page 23
TOP DOWN Forecast
0200400600800
1 0001 2001 4001 6001 8002 000
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
BU
SD
Ericsson Internal | 2012-10-15 | Page 24
TOP DOWN Forecast
Ericsson Internal | 2012-10-15 | Page 25
Bottom up forecast
Ericsson Internal | 2012-10-15 | Page 26
Value Calculator Technicalities
› Revenues
› CAPEX
› OPEX
Ericsson Internal | 2012-10-15 | Page 27
DimensioningNW Dim
Traf
fic d
istr
ibut
ion
6
Core
Dense urban
Extreme
High
Low
Medium
RAN Transport
RAN Transport
RAN Transport
RAN Transport
Urban
Extreme
High
Low
Medium
RAN Transport
RAN Transport
Transport
RAN Transport
RAN
Suburban
Extreme
High
Low
Medium
RAN Transport
RAN Transport
RAN Transport
RAN Transport
Rural
Extreme
High
Low
Medium
RAN Transport
RAN Transport
Transport
RAN Transport
RAN
Usage(GB/sub/month)
(Minutes/sub/month)
Subscribers(#)
1 2
Traffic management (data)(% remaining traffic)
Total traffic(Gbps)
Busy hour share(%)
5
3
7
Traffic in BH(Gbps)
4
Coverage Peak rate
NWcost
(CAPEX+
OPEX)x
x
Ericsson Internal | 2012-10-15 | Page 28
Pricing
Ericsson Internal | 2012-10-15 | Page 29
Sensitive information
Ericsson Internal | 2012-10-15 | Page 30
Sensitive informationLTE Throughput per band and area type
31,0
33,0
35,0
37,0
39,0
41,0
43,0
45,0
400 900 1 400 1 900 2 400 2 900 3 400
DU
URSU
RU
Ericsson Internal | 2012-10-15 | Page 31
Value Calculator Technicalities
› Revenues
› CAPEX
› OPEX
Ericsson Internal | 2012-10-15 | Page 32
OPEX split
35%28%
11%
10%
7%
7%
8%
8%
10%
15%
12%17%
5%4%
Other/G&AMultimedia apps
BSS
OSS/ NW mgmtSI CAPEX
Equipment roll-outConstruction
Transport
Core
Site Equipment
Access
3% 2%
3%4%
3%
4%3%
3%
8% 9%
37% 39%
4%5%
10%12%
7%
15%16%
7%8%
4%
9%
Other/G&A
Marketing and sales
Term. & roaming
Terminals
Customer mgmtContent right-to-use
Service dev/BSS
Network O&MNetwork development
Site Costs
1%
3%4%
1%
3%
CAPEX (~15% of Sales)Mature market
Source: Ovum
OPEX (~60% of Sales)Emerging marketMature market Emerging market
Sum 100% 100% 100% 100%
E/// A
ddressable 34%
E/// A
ddressable 57%
Ericsson Internal | 2012-10-15 | Page 33
Agenda› Introduction› Benefitting sales› Value Calculator Technicalities
– Revenues– CAPEX– OPEX– Results– Risk– Finance
› Next sessions
Ericsson Internal | 2012-10-15 | Page 34
Value Calculator Technicalities
› Revenues
› CAPEX
› OPEX
› Results
› Risk
› Finance
Ericsson Internal | 2012-10-15 | Page 35
Value Calculator Technicalities
› Revenues
› CAPEX
› OPEX
› Results
› Risk
› Finance
Ericsson Internal | 2012-10-15 | Page 36
Value Calculator Technicalities
› Revenues
› CAPEX
› OPEX
› Results
› Risk
› Finance
Ericsson Internal | 2012-10-15 | Page 37
Agenda› Introduction› Benefitting sales› Value Calculator Technicalities
– Revenues– CAPEX– OPEX– Results– Risk– Finance
› Next sessions
Ericsson Internal | 2012-10-15 | Page 38
Building a Value Calculator in 30 minutesCourse exercise
Ericsson Internal | 2012-10-15 | Page 39
Generic Value Calculator- Ready made graphs
Ready made graphs.
NOTE: on row 195 there is a button to update the graphs that compare the scenarios
Ericsson Internal | 2012-10-15 | Page 40
Ready Financial output- Income statement- Balance sheet- Cash flow-Key Financial Indicators
Generic Value Calculator- Ready made Financial statement
Ericsson Internal | 2012-10-15 | Page 41
Easy input:- Revenues- Opex- Capex
For up to 5 scenarios
Generic Value Calculator- easy input and scenario comparison
Ericsson Internal | 2012-10-15 | Page 42
Add your own sheets for the dimensioning in Your case
Generic Value Calculator- dimension in support sheets
Ericsson Internal | 2012-10-15 | Page 43
Financials:- Discount rate- Value Calculator horizon
Generic Value Calculator- Financial Input
Switch between Scenarios
Ericsson Internal | 2012-10-15 | Page 44
BACKGROUND
› Operator WideNet is planning to expand its network indoor coverage in shopping malls etc using WiFi. The plan is to increase the indoor coverage with 2,000 WiFi nodes per year, over the coming 5 years. They anticipate this will increase customer satisfaction so much that they would gain an additional 50,000 subscribers per year.
MORE INPUT
› Monthly ARPU: 30 USD› CAPEX: 3,000 USD / node› OPEX: 4,000 USD / node› OPEX: 20% of revenues› Depreciation time of a WiFi node:
8 years (business life time)› Discount rate: 15%› 5 years business horizon
Ericsson Internal | 2012-10-15 | Page 45
MAIN QUESTION
› Is this a profitable investment, considering the financial KPIs below?– Net Present Value (NPV)– Internal Rate of Return (IRR)– Payback time
SCENARIOS
› How many subscribers per year (as a minimum) is needed to justify the investment?
› Is an additional 200 sites that gives 10% more subscribers a better case?
› What if non-network opex is 3 mill USD yearly + 20 USD / subscriber yearly
Ericsson Internal | 2012-10-15 | Page 46
INSTRUCTIONS
› Use the Generic Value Calculator model
› 30 min to prepare, individually
› 15 min for one person to get feedback from his/her group.
› Questions, if we have time
› Send me your ready BC model, before end of this lesson
PRESENTATION TEMPLATE
› Base scenario– 5 year NPV– Payback– Peak funding– Minimum subscribers?
› +200 nodes scenario– 5 year NPV– Payback– Peak funding
› 3 mill USD OPEX scenario– 5 year NPV– Payback– Peak funding
Ericsson Internal | 2012-10-15 | Page 47
Agenda› Introduction› Benefitting sales› Value Calculator Technicalities› Next sessions
– In depth – 30 Oct– Tools & Sources – 6 Nov
1
2
3