Custom network design and pricing tools C J Tyrrell

Selling national and international data networking solutions (WAN and LAN) is an essential part of the BT solutions business. In this highly competitive sector the technology is evolving fast and consequently there are frequent enhancements of the product and service offerings. With this goes a tendency to increase the complexity of the pricing and discount schemes as competitors jostle to differentiate their products in the market-place. The BT data network sales organisation has to keep up with all these market changes. To assist with this, BT has invested heavily in a range of bespoke sales tools to support mass customisation of this range of solutions, in order to help improve their turnover, market reach and win rate. One of these tools is an application called SPEED (system pricing and end-to-end design) which is used at the consultative selling and design stages. SPEED is installed on the portable computers used by the account management teams. It aims to incorporate the ‘mind of the expert designer’ — best practice design principles and a compendium of the latest product and service offerings with up-to-date tariff and discount structures. It enables customers’ requirements to be modelled and priced both accurately and quickly. SPEED provides a considerable advantage to the sales force in terms of reduced sales cycle, flexibility and accuracy of response to the customer. It also eliminates errors and omissions in the design and order-entry processes. This paper will focus on how SPEED delivers real business value to the customer and to BT.

1.

Introduction

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he data network sales force needs to be able to design a data network (both WAN and LAN components) in considerable detail before it can be accurately priced for a customer. The design issues surrounding very large custom networks are described by Whalley et al [1]. The sales organisation has invested heavily in the development of an application called SPEED (system pricing and end-to-end design). It is generally used for designing and pricing complex bespoke customer networks using a range of predefined and pre-tested network components. It can also handle special cases and custom bids. The tool has been successfully used to model and price customer designs involving several thousand sites, although a few hundred sites is more typical. Its use spans from major corporate clients through to small and medium enterprise (SME) customer markets.

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Custom designs, particularly for large complex networks tend to involve a skilled technical design and support team. There are additional checking and sign-off stages needed in order to proceed with a bid. Prior to the advent of SPEED most potential orders went through variations of this same heavyweight process and as a result it could take up to three weeks to get a quote back to a customer. If the customer then wanted some changes or wished to explore a different scenario, it was a repeat of the

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same lengthy loop. Pricing was also a largely manual process, which involved looking up individual items in paper-based pricing tables. This required the designer to have a first-rate grasp of the nuances of each product/ service set and it was laborious. Not surprisingly it was common to find that when the order was checked it contained errors. Data networking skills are scarce and it is important to be able to expand into other parts of the market without necessarily increasing the size of the sales team. SPEED was introduced initially to solve some of these issues, but over time has been enhanced and embedded into the sales process in such a way that it is now an indispensable part of day-to-day activities, like e-mail [2]. 2.

C

Business drivers

ompetition in this sector is fierce and the commercial pressure is on telcos to find cost-effective solutions in implementing networks that will support customer business needs. The ability to understand their potential future needs, and to produce a design capable of appropriate enhancement is key. The objective is to maximise the value to the customer of the products and services being offered. Use of managed data networks is no longer just the domain of large

DESIGN AND PRICING TOOLS corporate clients. Every sector of the market needs to be aggressively pursued. However, data networking and experienced sales skills are both scarce and at a premium. Incorporating expertise and experience into a widely available business tool is one way of extending the reach of the business without having to hire extra people. The sales cycle time needed to be reduced dramatically as customers want better information, faster turnaround, and, in many cases, wish to form a much closer partnership both in terms of getting a managed proposition but also having their businesses better understood. The cost of doing business — cost per sale and related overheads — is always an area that deserves attention. It is essential to be able to spot the best prospects and maximise the effort on those bids that are most likely to be successful. 3.

What is SPEED?

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PEED is an integrated family of tools aimed at designing and pricing networked propositions. At its simplest it consists of (Web-based) applications that provide a quick ‘product selector and pricing’ service. These are very popular, easy to use and particularly suitable for small and/or simple designs where the technical and commercial issues are well defined. The most complex custom bids tend to have specialist support teams involved in both design and pricing. In many cases the network is just part of a much larger commercial undertaking [1]. The main SPEED tool provides a design and pricing capability that supports bids into the top and middle sectors of the market from corporate through to SME. SPEED has been written and is currently maintained inhouse. It was conceived at a time when there were few

commercial products to fulfil the need. Those offerings that existed then (and today) tend to be relatively simple product selectors — albeit with very impressive front-ends, such as those used for buying and configuring cars, Unix boxes, PCs and routers. What differentiates SPEED is the degree of complexity of the business logic, business data and the expertise that is modelled internally. As a result the tool provides considerable competitive advantage to BT and improved service to the customer. SPEED has been expensive to build and is expensive to maintain (primarily in software development costs), but relative to its value it has paid for itself very quickly. As a result of using the tool, users report an increased win rate of 15% — a considerable advantage, increasing turnover by more than £150M [2]. This is accompanied by a substantial improvement in productivity, and failure cost elimination, which is worth about £12M/year in savings [3]. Before exploring where SPEED generates benefits, it is worth examining the contents of the tool a little closer (see Fig 1). On the face of it, the process is quite straightforward. The customer requirements are captured in terms of site location data; these are plotted on to a GUI map (see Fig 2) using several in-built locator tools such as a world gazetteer of place names and post-code-to-location look-ups. The traffic volumes (flows) between sites are entered (or calculated) and CPE information added. Contract details, service wrap parameters and defaults are defined. The design engines then calculate the best network routeings, link aggregations, POP locations, management links and back-up arrangements for the services selected and plots the results on to the map. Suitable routers and all the necessary sub-components, including memory and cables, are then

SPEED logical components ●map

outlines ●world gazetteer ●distance calculator ●postcode locator ●matrix interface ●forms interface ●multiple views ●CSV loader ●long/lat mapper ●site group feature ●POP locator

LAN/WAN GUI

●product

and service expert knowledge bases ●design rules ●traffic modeller ●design wizard ●rules engine

LAN/WAN design engine

●pricing

●report

●break-points

●validation

engines and discount logic ●access circuit pricing engine ●automatic license expiry

pricing engine

templates reports ●reporting engine ●design summary

reports and design summaries

●interface

order system interface

individual design file data Fig 1

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The logical components of SPEED.

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DESIGN AND PRICING TOOLS At this point a complete bill-of-materials parts list is available to the pricing engine. It uses this, the distance calculations, POP information, service wrap, the pricingdiscount engines and contract options to determine the bottom-line price. The reporting engine produces much of the sales and bid paperwork for the sales person and customer, both in detail and summary, by populating standard templates with the design and pricing information. The design file contains all the data about the order and this is injected directly into the ordering system, which eliminates re-keying and other errors. It also provides a record of the bid.

Inverness Fort William

Aberdeen

Edinburgh Glasgow

Belfast Leeds

Nottingham Oswestry

Ipswich

Swansea Bristol

Truro

Fig 2

Torquay

Oxford

London

Bournemouth

Brighton

A typical SPEED on-screen-WAN view showing physical network links.

derived and specified for each site using a rules engine. This information is present in a GUI LAN view (see Fig 3) which includes a schematic, parts lists and any appropriate design warning messages.

From the outside SPEED is disarmingly simple, but its real strength lies in the accuracy and completeness of the product and service models that it contains and the presence of up-to-date pricing details. These are maintained on PCs by regular network updates, which download changes and enhancements to the PC. To prevent the use of out-of-date information, SPEED automatically times out and expires if it is not resynchronised. This provides protection for the customer and BT and also fully complies with Oftel requirements. In order to become an accredited SPEED user it is necessary to attend a week-long assessed course. This gives BANDWIDTH=192 DESTINATION=Nottingham NAME=Leased Line

BANDWIDTH=1024 NAME=WAN PVCS=1 SERVICE=Frame Relay

FR NAME=Router Link Cable

FR

BANDWIDTH=2048 NAME=WAN PVCS=2 SERVICE=Frame Relay

BANDWIDTH=384 DESTINATION=Oswestry NAME=Leased Line

fast

NAME=IP-Host QUANTITY=1

NAME=Router PARTS=123998: UTP Crossover Cable (3M) PARTS=787554: Cisco 2610 Module PARTS=787560: WAN Interface Card 2-Port Serial PARTS=787572:X.21 DTE Cable SS-Type (M-M) PARTS=787572:X.21 DTE Cable SS-Type (M-M) PARTS=787585:IOS 11.3.xx Enterprise Plus PATRS=787600: 8-16Mb Flash Factory Upgrade PARTS=788169:24-32Mb DRAM factory upgrade PROTOCOL-Enterprise ROUTER=Cisco 2610 WARNING=The 26xx is supplied with V12.xx software which is subject to trial. WARNING=You have NO local serial/LAN connection.

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Fig 3

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NAME=FastEthernet TYPE=100BaseTX

NAME=IP-Host QUANTITY=1

NAME=Router PARTS=787554: Cisco 2610 Module PARTS=787560: WAN Interface Card 2-Port Serial PARTS=787572:X.21 DTE Cable SS-Type (M-M) PARTS=787572:X.21 DTE Cable SS-Type (M-M) PARTS=787585:IOS 11.3.xx Enterprise Plus PATRS=787600: 8-16Mb Flash Factory Upgrade PARTS=788169:24-32Mb DRAM Factory Upgrade PROTOCOL=Enterprise ROUTER=Cisco 2610 WARNING=The 26xx is supplied with V12.xx software which is subject to trial. WARNING=You have NO local serial/LAN connection.

A typical LAN view from inside SPEED showing the router sub-assembly components.

DESIGN AND PRICING TOOLS a clue to the depth of information and facilities available in it; however, it is relatively easy to use. 4.

The business benefits

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his section examines how and where SPEED benefits BT and the customer.

4.1

There is also evidence from sales ‘war stories’ and user surveys [2] that customers have been impressed with the SPEED tool and the flexibility and ease with which changes can be made and the fact that the graphical visualisation of the WAN and LAN gives confidence to the customer. It shows that their requirements have been clearly understood. It also increases the confidence of the sales team and enhances their credibility and professionalism, as it guides them to gather all the data that is needed — as a result there is little scope for ambiguity in the requirements capture. The improved rate of response to bids and the flexibility have resulted in wins. SPEED is also a vehicle to show customers alternative and additional products and services that are available (particularly the connectivity matrix). This enhances the dialogue the sales team can have with the customer and increases the buy-in. Market reach

SPEED was originally aimed at the top end of the UK market (see Fig 4). It has since been diversified to handle International Concert frame relay. The recent addition of components such as gateway services [4] and the ‘connectivity matrix’ extends the range of standard and flexible packaged solutions that can be had ‘off the shelf’. This is increasing the penetration of the small corporate and SME market and moving further down the ‘triangle’. Arguably, the Internet is the ultimate destination for this tool with its inherent ability to allow the maximum number of people to ‘self-serve’. An element of self-serve could enable potential sales to be identified early (while customers are in the initial enquiry/research phase). This

top 5000

‘expert’ sales tool

top 50000

top 500000 potential customers

Competitive edge

The ‘expert’ knowledge that is encoded within SPEED effectively downstreams that experience to less experienced people. The primary value is that, in effect, it increases the size of the experienced sales team without having to increase the number of people. This allows wider ranges of prospects to be followed up with the existing team. The significant productivity gains that SPEED provides enable a higher throughput of orders, which translates in part to a higher win rate (with less wasted time on the losses). Companies would need to employ many more scarce (and expensive) people to cover the same ground.

4.2

individual expert sales attention

Fig 4

Market reach extended by SPEED.

early market information could then enable even better targeted consultative selling where it would be most beneficial. This would provide a considerable competitive edge. In combination with using SPEED and through being accredited, sales people can be given much more commercial freedom to make sales of packaged solutions ‘off the page’ up to £1M without having to go through the pre-sales bid processes, i.e. delegated authority. This is just one way of minimising the cost of sales and empowering the sales team while reducing the risk to the customer and the company. About 50% of the active users are working towards accreditation (which is granted through an assessed training course and by maintaining a track record). 4.3

Cost savings

There are just over 500 [5] users of the main SPEED tool and several hundred users of the simpler tool sets. The primary saving through SPEED has been the significant reduction in ‘back-room’ support needed to design and validate bids. The accuracy of the tool means that minimal vetting has to be done to the orders going through. The tool produces much of the bid paperwork, which eliminates the laborious job of producing documentation. Delegated authority further reduces the need for support. The accuracy of the data-feed into the ordering systems and the elimination of rekeying has significantly reduced the errors. The very process of programming these services into SPEED, by the software development team, has resulted in detailed questioning about the particular product or service. This is useful as it can help eliminate any areas of ambiguity, which might have an impact on the customer. The increased productivity means that the cost per sale continues to decline, which will ultimately feed through as price reductions to the customer. BT Technol J Vol 18 No 2 April 2000

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DESIGN AND PRICING TOOLS 5.

The future

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he roots of SPEED originated in the BT Advanced Research and Technology Department. SPEED was originally created as a technology demonstrator for knowledge-based systems [6]. It contained only parts of a couple of services. It was scaled into a production tool and enhanced to model a wide range of products and services. It has been under continuous development and in the field for about three years. The current product is well advanced in its life cycle (see Fig 5) and it is being re-architectured in Java to open up other commercial opportunities and reduce the cost of ownership.

re-architecture to provide support for other parts of the market. Figure 6 shows reasons for undertaking development and the increasing added value (and risk) of reaching towards the outer layers. revenue protection strategic market shift revenue generation business process re-engineering failure cost elimination re-architecture

strategic

high potential Internet variant

increasing business value (and increasing risk)

initial concept adding services fully deployed

key operational Fig 5

Fig 6

focus of future development

SPEED life cycle and future [7].

The core of the tool is being redeveloped and rearchitectured using Java and Oracle 8/8i. A pilot system is partially built although the search continues for components that can be bought in rather than developed in-house. This must allow for both stand-alone and Web-based working using common code. It also simplifies the task of updating and re-synchronising the population of SPEED stand-alone machines. The year-on-year cost of ownership is necessarily high (due to the number and extent of product and service changes). These costs need to be reduced and the planned revised architecture will help make such changes easier to handle, quicker to implement and less dependent on scarce LISP developers. Re-architecture on its own provides little business value (it can simply add cost). The important factor is to use the BT Technol J Vol 18 No 2 April 2000

The current version of SPEED has considerably changed the (internal) sales process and has provided added value all the way out to ‘increasing revenues’.

support

The current core design components and rules engines are written in (object-oriented) common LISP which is well suited to the complex problem space and rules engines. It is less well suited (but just adequate) for the complex graphics and in its present form is not yet capable of running as a Web-based service. The pricing engines are written in C++ and the reporting engines are written in Visual Basic and Crystal Reports interfacing to Microsoft Office® products and templates.

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Business drivers for development.

There is now the opportunity to reach out as far as possible — preferably taking the bold step of trying to change the market-place fundamentally, perhaps by providing Internet-based tools to help the customer evolve their business and make BT their first choice. 6.

Conclusions

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o quote from the SPEED development review [2]: ‘SPEED not only delivers a competitive advantage to its users in terms of the quality of the bid and the accuracy of the pricing information, but also in reducing the effort required to bid from around 500 man-hours to 5 man-hours typically. This has allowed a 60% increase in bid throughput.’ This is not only good news for BT but is ultimately excellent news for customers too. References 1

Whalley G, Newson D, Linsell K and Palmer M: ‘Custom solutions for complex networks’, BT Technol J, 18, No 2, pp 13—29 (April 2000).

2

Crawford A: ‘SPEED development programme review for BT UK markets’, Internal BT document (1999—2000).

3

Bourne S: ‘SPEED 1999 survey results’, Internal BT document (update on report cited as Ref 2) (2000).

DESIGN AND PRICING TOOLS 4

Walton D: ‘Frame relay to ATM interworking’, BT Technol J, 16, No 1, pp 96—105 (January 1998).

5

Thornhill D: ‘SPEED case for funding’, Internal BT document (November 1999).

6

Scott D L and Bull P M: ‘A knowledge based system for configuration and pricing of ServiceView network management systems’, BT Technol J, 12, No 4, pp 62—70 (October 1994).

7

Ward J and Griffiths P: ‘Strategic planning for information systems’, John Wiley (1997).

Further information on SPEED is available to BT people from http:// business.intra.bt.com/speed

Chris Tyrrell joined BT in 1967 as an apprentice, qualifying in City and Guilds and later Chartered Institute of Purchasing and Supply (CIPS) Professional Exams. He worked initially on telephone exchanges, the transit network, System-X development and subsequently in software development. He has won awards for his innovations including the SEISMIC software delivery system and the FERIT data distribution tool. He currently manages several projects including the BT Gold Medal winning SPEED team.

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