Radovan Igliar, CESNET

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Cesnet cost attribution and charging models

Radovan Igliar

Agile Portfolio Management and Cost Attribution

CESNET

Association of Legal Entities

Universities

Academy of Science

Customers

Members

27 universities

Academy of science + departments

Non-members

12 elementary schools

106 high schools

10 private universities

25 research

40 public administration

39 health

23 libraries

26 other

Income

60% Members

Annual fee based upon size of the organization

All services on best-effort basis

30% Non-members

Connectivity – price list

No models for extra services

10% Research

Funding

Members

Non-members

Reseach

But …

Can I talk about charging model and cost-attribution …

.. if we are not certain in our

product portfolio

?

I can talk, where we are now.

Attributing costs to products and services

The solution was

full-cost (cost – sharing)

CRM

Problem is – that we still don’t have the DATA

Let’s talk a little about problem-solving perspective

We identify a

problem

.

... and we feel

stg. has to be done

.

But we are

engineers

.

„Reasonably smart people can rationalize anything, but ‘engineers’ are especially gifted at this.”

Ash Maurya

We have (yet) sufficiency of

resource

„Reasonably smart people can rationalize anything, but ‘engineers’ are especially gifted at this.”

Ash Maurya

… so we start building

solutions

.

„Reasonably smart people can rationalize anything, but ‘engineers’ are especially gifted at this.”

Ash Maurya

Problem identification

OUR PERSPECTIVE

„We don’t know our users and how to

communicate

with them.“

„We offer

right services

for the users, but ...“

„We don’t know how does our services

cost

.“

“We should

present us

in a better way.”

Looking for Solutions

IN REAL

“We don’t know our users and how to communicate with them.”

Let’s implement CRM. Huray!

“We offer right services for the users, but...”

We should focus on marketing. That will save us.

“We don’t know how does our services cost .”

Let’s implement full-cost model. That’s the solution.

“We should present us in a better way.”

Let’s make new website.

Looking for Solutions

IN REAL

“We don’t know our users and how to communicate with them.”

CRM

“We should present us in a better way.”

website

TOOL

“We offer right services for the users, but...”

marketing

PR

“We don’t know how does our services cost .”

full-cost

TOOL

ONE-WAY

Looking for Solutions

IN REAL

“We don’t know our users and how to communicate

CRM

with them.”

For whom?

Processes?

Do we have data?

“We offer right services for the users, but...”

marketing

Events

Website

“We don’t know how does our services cost .”

full-cost

Identifiers

Again -Data?

“We should present us in a better way.”

website

CMS

Structure

Looking for Solutions

IN REAL

“We don’t know our users and how to communicate with them.”

CRM

½ year

“We offer right services for the users, but...”

marketing

2 years

“We don’t know how does our services cost .”

full-cost

1+ year

“We should present us in a better way.”

website

1 ½ year

Looking for Solutions

IN REAL

… and establish a

working group

to solve it, and

• appoint

people

which identified the problem,

• but

not those

that should participate.

Looking for Solutions

IN REAL

.. which leads to

communication problems .

Looking for Solutions

SHOULD DO

• communicate

Get out of the building. ~ Steve Blank right services

Know our segment, products, and added value. cost

Know our market and products. present us

Start building customer channels. ~Eric Ries

Back to the

… cost attribution and charging models

.

Attributing costs to products and services

The solution was

full-cost

and CRM.

So working-groups were established.

Accounting / Booking costs:

1. by project (due to fund policy)

2. by department (due to internal budgeting)

3. not by products

CRM

Public procurement on the SaaS software

Problem is – that we still don’t have the DATA

Attributing costs to products and services

Booking costs:

1. by project

(due to fund policy)

2. by department (due to internal budgeting)

3. not by products (yet)

1+2 works with most extra service, if we don’t include share of the price for core services

(network, monitoring, NIC, DNS, etc.)

– metrics: fix rate, percentage, usage?

so we still have to do (3), and to know our

product portfolio

Attributing costs to products and services

Nov. 2012

Before only one service charged and offered

(connectivity to non-members)

Other services offered to member on best-effort

Product manager

Dec. 2012

Stg. Like „Service Board“ established

Product portfolio

Jan. 2013

Business development dept. established

Feb. 2013

Proof-of-concepts projects

Attributing costs to products and services

Product portfolio

Lean Canvas

Interviews with product owners

Our approach

Think big, start small, move fast

Proof of concept projects

Challenges

Strategy

EU/National level: Unclear and changing

Internal: not just words, mean them

Self-sustainability and not-competing

Research

vs.

Service-delivery

Revenue

vs.

Profit

Legal

Members

– vs.

non-members

Legal form (Association of Legal Entities)

Access policy to commercial R&D

Opportunity to Public procurement

Challenges

Products and services

Diversification

Improving user experience

Best effort

vs.

Guarantee of quality

Outsourcing

vs.

In-house

Marketing

Marketing strategy

Identifying customer segments

Building customer channels

Communicating the added value

Utilize unfair advantage

Campaigns

Challenges

Finance

Cost structure and cost sharing

New business models

Transformation of Culture

History

Sufficiency of resources

Certainty

Professional blindness

Product portfolio

eduroam storage security mobile connectivity

Proof of concept

• eduroam

Organizations want eduroam, but do not have all the resources.

We have the knowledge, but not personal resources.

New business model

Focus on revenue

Outsourcing of the technical installation

User support (24/7 support desk)

Cost structure and cost sharing

Quality of service

Proof of concept

• double-house connection

Commercial R&D companies

New business models

Access-policy

Framework for state aid for R&D&I

Marketing

Proof of concept

Data storage

Diversification

Basic service – in membership fees

Extra service - pricing

Cost-sharing

Focus on profit

Marketing

Proof of concept

Antispam mail gateway

New business models

Customer need evaluation

Product life-cycle and planning

Focus on profit

N: Radovan Igliar

E: radovan.igliar@cesnet.cz

W: https://www.cesnet.cz/

L: http://cz.linkedin.com/in/proteo/

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