Working with global multinationals on their business case for SD-WAN, we’ve developed a detailed understanding of the real benefits and challenges.
Here are some of the main lessons we’ve learnt along the way.
Addressing increasing bandwidth demands
Often the discussion around benefits centres on the potential cost savings of a hybrid WAN with internet connectivity over MPLS. For the majority of our customers though, the opportunity is not to reduce their overall cost. Rather it’s about using this move as an enabler for delivering greater bandwidth to meet their digital transformation needs without spending a fortune. To make a compelling business case for this you need to take a more sophisticated approach than if you are just doing the same network more cheaply. The key metric is not overall cost reduction, it’s the reduction in cost per megabit – in other words it’s proving you can deliver a more cost efficient network that is fit for the future.
A hybrid network can save money but savings vary by region and country
In the US, the price differential between MPLS and internet circuits remains high; many SD-WAN vendors focus on this without recognising there is a different profile elsewhere. As a global provider of connectivity services we deal with network vendors and pricing around the world, we understand how variable the differential is between countries. In the UK, for example, the savings are smaller from a switch to business grade internet.
We have learnt that an assumption that huge savings will be uniformly achieved across the globe is misplaced. To really understand the cost impact of moving to a hybrid network, it’s important to define precisely what kind and size of underlay meets the needs of the business in each location, and the technology solutions required to deliver against those business needs globally. Also the definition required is not just from an underlay infrastructure point of view, but also in terms of what else will be required to enable the change (e.g. security).
Service and support model benefits
There’s an increasing interest in the benefits that flow from the way SD-WAN can transform the network service management processes; for example reducing process costs through automation and improving visibility when troubleshooting issues. Our experience suggests that actually these service model benefits may well be greater than the impact to network costs and may have greater strategic impact.
The benefits might include:
However it’s important to recognise there may be hidden costs, depending on the route you take. For example if you are opting for a more DIY approach to SD-WAN rather than a full managed service, have you fully thought through the less visible costs of this approach? Like the additional new skills required to run a fully-enabled SD-WAN network and the full extent of service management functions required in-house to deliver and maintain it. Are you certain this is a more cost effective approach? When writing the business case you should consider that question and the possibility to buy managed services for non-differentiating activities.
The stakeholder landscape is key to success
The head of networks naturally has a focus on the cost of the network. But when you speak to the CIO they are focussed on establishing an agile IT model and enabling their business to realise the benefits of digital transformation. For example enabling cloud bursting through flexible bandwidth may be key to a business process that delivers significant innovation and differentiation, thereby delivering an ROI on any network investment.
When you consider this broader perspective, the business case for a future network incorporating SD-WAN really starts to fly. By contrast, a business case focussed only on the impact to the costs of the network department will be far less compelling.
So therefore the business case needs a joined-up approach with key stakeholders involved, not just the network department. It needs to be business-focussed and aligned to the broader ICT strategy. Too often we’ve observed a technology-focussed approach to future networks with network teams looking at SD-WAN and the network roadmap in isolation. We’ve seen activities around proof of concepts (PoC) on SD-WAN without clarity on its alignment to the business need and what the success criteria should therefore be. This is often little more than technologists playing with the shiny new toys. Is it any surprise that when it comes to the time the business is asked to fund their decisions, the investment is not approved?
Our view is that it is critical the wider community is engaged as early as possible and they are consulted on what they need from a future network to support their business priorities.
We have learnt that an assumption that huge savings will be uniformly achieved across the globe is misplaced.”
Validate with a proof of value where required
The implementation of a properly structured proof of value can be conducted to help you gather further evidence that can validate the business case. We purposefully call this activity a proof of value rather than a proof of concept. The difference is that this exercise now focusses on business value in addition to proving the technology concept. It is about implementing a technology and set of processes at a small scale to confirm the assumed business benefits can be achieved, in a live environment, using a set of pre-defined test criteria that reflect business outcomes.
Our observation is that organisations often rush to a proof of concept (often in response to vendor suggestions or advice from elsewhere) and it’s not unusual for this to only demonstrate that the product functions in a limited number of sites. It gives no further insight or momentum to the SD-WAN programme. Indeed, it can even be a set back because as the organisation jumped to a PoC too quickly, all it does is help them conclude that the solution is not fit for purpose and you’ve lost many months as a result.
By far the best approach is to work on the SD-WAN strategy and understand the business need. Then you can select the best fit solution for your network based upon that and develop a properly structured business case for the implementation. That is far more likely to lead you successfully into a full-scale implementation right-first-time.
It is your business case
There are many ideas published on the benefits of SD-WAN and there are many options. However it is your business case and it needs to be focussed on your organisation because every business case will be different. Take a structured approach, understand your business need, analyse the benefits, use a partner that you can trust to help you and make an informed decision for your roadmap based on a solid business case that delivers the Digital Transformation your organisation needs.
We’ve learnt these lessons working with global multinationals on their business case with SD-WAN. Find out how we can help you with your future networking strategy.