Posts Tagged ‘Broadband Investment’

May 2010: The Broadband Lifecycle and Investing Wisely

The broadband lifecycle: demand analysis and pre-planning

By Michael Curri

Much too often broadband initiatives that should be successful end up falling flat – for a Making_plans myriad reasons.  Perhaps they do not get off the ground because of a lack of vision, planning, or leadership. Many fail during the strategy and build-out process as they lack focus and/or sufficient investment of time, energy, and resources. Some initiatives may have been successful building the network but fail because they are simply taking a “we built it – you use it” approach and not driving applications and adoption. And even the most successful broadband projects, with ample utilization and economic and social impact can be perceived as a failure if the outcomes are not measured and reported.

It is for all of these reasons that SNG encourages its customers (and all broadband project managers for that matter!) to design and run their broadband initiative with “one eye on the Broadband Lifecycle.” In this issue of Bandwidth, and the next two, we will be taking a look at 2 of the 6 steps of the Broadband Lifecycle. In this issue: step 1 (identifying gaps, needs, and demand) and step 2 (pre-planning and assessment). 


Step 1: Identify gaps, needs, and demand

Before you jump in with both feet (and fistfuls of dollars), ask yourself: does your community need (more) broadband? Is your region’s current infrastructure insufficient when it comes to meeting the needs of your entrepreneurs? If the answer to either question is YES – then the most important task in step one is to determine how a broadband investment can eliminate community shortfalls and create solutions for economic and civic advancement.

Critical here is to identify your community’s specific needs. Don’t make the mistake of simply following any “tried and true best practices” that you think may apply in your territory – as the gaps and needs for one region are not necessarily yours. Don’t scrimp on research in this stage – too often it is feared that research is too slow and expensive – or just unobtainable. However, we know it can be done. Strategic Networks Group (SNG) has for years been helping governments, at municipal, regional and national levels, to best understand where investment will make the biggest impact. [Most recently SNG has helped Alberta (Canada), Michigan, North Carolina, Ohio, and Virginia with a variety of data collection solutions, including e-Solutions Benchmarking.]

Step 2: Pre-planning & assessment

Make sure you have your “ducks in a row” and all of your stakeholders/partners on board before moving forward with the next step (developing a strategy). What do you need to implement a successful broadband deployment? What leadership and partners do you need to achieve your community’s goals? What components need to be included your deployment? Keep in mind that having a well-represented group of invested parties in your community helps create the momentum you need for a wide-reaching, successful project.

Make sure you take into account your community’s assets: each community has both different needs and different strengths – and those strengths will be uniquely leveraged via the broadband-enabled “platform for innovation”. Too often communities take shortcuts. Instead of uncovering what the needed resources are, or how to leverage current efforts to best serve the specific and unique needs of the community, civic leaders race to copy what another community did. [Contact SNG for our numerous case studies in this phase, including work in Miami (FL), Akron (OH), the Canadian provinces of Ontario, Toronto, Manitoba, and Australia.]

No matter where you are on the Broadband Lifecycle, you can turn to us for leadership to help navigate through the challenges and pitfalls of each step, maximizing your project’s economic impact and civic advancement.

Next Month: Steps 3 (e-Strategy & decision to invest) and 4 (Build or expand network capacity).

How to invest wisely – 4 key guidelines

By Doug Adams

Now that you have funding, how can you make sure that your project lives up to the promise that got it funded in the Invest_wisely_SNGfirst place? Hundreds of broadband projects are being funded in 2010 – be it from Stimulus or some other funding source – but how many will truly become a community asset that drives economic and social benefits?

 Key to making sure your project will have a return on investment with quantifiable outcomes starts with these four guidelines:

  1. Don’t focus on engineering: it’s all about awareness and adoption;
  2. Use data to drive decisions before, during, and after the project;
  3. Create a “platform for innovation”: investing in broadband is NOT just about the financials;
  4. Frame the benefits, measure them, and promote.

Don’t focus on engineering. It’s all about awareness and adoption.

Broadband planning should start with current and future demand of e-solutions by individual businesses, organizations and households. It is natural to focus on the tangible always – the network build, the nuts and bolts of it all – it is how we’re programmed… to follow a blueprint and build.

But building without utilization is a fruitless (although significant) exercise. It’s the utilization, the applications, and the resulting increased productivity, competiveness and innovation that your network creates that are the reasons for investment. Never lose sight of this. It’s the “off-balance sheet” benefits to the private and public sectors that are key for your broadband initiative to bring community value. And the key to deriving value is, and always will be awareness and adoption. Often requiring campaigns targeted at the individual business, organization and household level.

By always keeping your eye on driving adoption, the public investment will be seen as a successful part of community growth.

Use data to drive decisions – before, during, and after the project.

Broadband planning is part of strategic planning for a community / region. Without an assessment of current utilization, or a vision of what the utilization could be, how can an appropriate network be built?

Make sure you do the legwork (research) to understand what how local businesses need to do to be productive and competitive and how broadband – or better broadband – can help them achieve their goals. Do you have plans for applications that will support needs? What services can broadband support for public institutions? And will the network be able to meet utilization requirements?

Take ownership locally of your region’s future – local stakeholders need hard data and insights to make the right decisions about what kind of community they want to be 5, 10 years down the road – and how broadband helps get you there?

Investing in broadband is NOT just about the financials. It is about creating a “platform for innovation.”

It’s easy to see the immediate benefits that broadband will bring – be it needs that are blatantly apparent or discovered through assessment. What is not always as immediately evident is the long term transformational power of a broadband “platform for innovation.” One needs only to look back ten years to see how the world has changed – and the economic and social benefits that have accompanied this change – when broadband first emerged as a replacement for dial-up.

Looking back through our history, there have been countless – and sometimes unpopular – decisions to make an investment in infrastructure whose benefits would reveal themselves only when it was in place, and for decades to come. Roads, railroads, water and sewer systems, national defense, etc. are all examples of economic drivers that exceeded what could have even been imagined.

The opportunity cost of not having broadband is continued loss of jobs, industry and youth from a community / region – you cannot afford not to have it if you wish to remain relevant and competitive in an increasingly globalized economy.

Only when you stop looking at your broadband project yielding only immediate and finite benefits will you begin to see the true benefits for your community.

Frame the benefits. Measure them. Promote.

While all of the benefits of your network are not immediately measurable – measure what you can – and promote your success! Define success is measurable, tangible metrics – not with philosophical mumbo jumbo.

By defining goals and the criteria for measuring success, it is possible to collect the data needed for short-term return on investment. All public investments require accountability and transparency, so putting in place up-front monitoring and management process maximizes cost-effectiveness of cost-benefit analysis, but more importantly can leverage these processes and tools to maximize local economic and social benefits. Of course SNG can help you with each and every challenge you may have to ensure your community’s network investment has the measurable impacts and long-term benefits you need.

Issue 10, November 16, 2009

“Measuring community the broadband community return on investment”

Research from SNG and others (as well as anecdotal experience) has convinced most decision makers that broadband is beneficial. This, along with federal funding and increased policy focus, is fueling a growing interest in taking this “broadband is beneficial” understanding to the next level of depth and practical value – including assessment of “return on investment.”

Here is how broadband contributes to economic growth – beyond “IT jobs”

The economic spill-over benefits from broadband are more far-reaching, although not as obvious, as the typically narrow “direct impacts” that are typically discussed, such as technology sectors, (e.g. “IT jobs”) and e-commerce activities related to B2C and B2B transactions. To understand the full impact of investing in broadband infrastructure and broadband adoption initiatives one needs to look deeper.

Business users quickly understand the broadband-enabled benefits of doing the same things faster: whatever the organization was doing before such as research, communication, or document transfers, etc. can be done more efficiently and reliably. However, the most significant benefits are generated from opportunities whereby businesses and organizations transform their business operations by using broadband-enabled applications to be creative and do things in new ways that were previously not possible, such as adopting new business models, or reaching-out to new markets.

Although it takes time for most businesses and organizations to determine what broadband-enabled changes makes sense for them and to implement the appropriate “e-solutions”. Enterprises that are motivated – by a need or opportunity – will move quickly to take these transformative steps and the others will follow, which is fundamental to productivity and competitiveness. The same dynamic occurs for organizations that may not be driven by revenues, or profits. All organizations that provide some kind of service have staff, internal processes, and interact with suppliers and clients. Organization growth may not be the first priority, however productivity and service delivery remain important drivers.

The three impact waves

  • Direct impacts: The increased revenues and/or cost savings generated from the utilization of broadband and e-solutions. Examples are extending market reach by going online, or reducing long distance charges by using VoIP.
  • Indirect impacts: The changes to production, employment, incomes etc. which occur up and down the supply chain from the businesses and organizations generating the direct impacts.
  • Induced impacts: The effects of spending wages derived from direct and indirect activities. Households spend their income on goods and services, creating a further ripple effect of economic impact that started with businesses and organizations using broadband.

The net result of the direct impacts from broadband and the spill-over benefits (indirect and induced impacts) increase overall economic activity. Other positive spill-over effects occur, such as demand for new skills and its implications for the labor force. With increasing adoption of e-solutions the need grows for new skills to implement, maintain, and utilize technology and applications to their full benefits. For example, the use of broadband itself also opens up new possibilities for staff training through online resources that would otherwise be unavailable or costly. This important because of the strong linkage between skills development to productivity and innovation.

What impact on the community?

While some of the increased spending created by broadband will occur outside the community, much of it will stay within the community, increasing the overall strength of the local economy through business retention and expansion. Not only does this enable businesses to compete globally on a more level playing field, but also creates a positive business environment to attract new businesses. The creation of new jobs is not only good for those employed, but it also reduces the risk of population decline and can attract high-paying jobs to the community.

Introducing the “community return on investment”

Traditionally, and when left to the private sector, decisions to invest in broadband networks have been based on the typical business case of subscriber revenues generating an ongoing operating profit. We certainly cannot blame service providers for that decision-making criteria – it is their business to make a profit and to choose wisely where to make their investments. Unfortunately, this is also the reason that many communities still do not have sufficient broadband availability – sometimes the business case just does not work for the service provider. When we look beyond the traditional business case and examine the economic impacts from broadband investments we get a very different picture. SNG research has shown that the economic return can be up to 10 times the amount invested in broadband networks. The challenge is how to bridge the gap between the profit-driven decisions of those that build networks and the investments needed to achieve the economic impact potential of broadband.

Increasingly, the answer is coming through public policy interventions at various levels of government, often accompanied by funds to stimulate investment in broadband infrastructure. The underpinning of such public investments needs to be the belief and the confidence that broadband is essential for maintaining business competitiveness and productivity and for enabling economic growth, as well as the numerous social benefits such as enhanced delivery of health and education services. Governments of many countries and regions are taking the leadership to undertake or facilitate investments in broadband in recognition of its economic impact potential – which can actually be measured.

Recent example

Businesses and organizations do increase revenues, reduce costs, and create jobs as a result of using broadband, and they are able to tell us that. For example, in a recent study, we found an 11% average 12-month increase in employment across 221 US organizations directly as a result of using fiber access for their operations. Over 63% of businesses said that their use of fiber was important for increasing sales and 179 establishments generated a total of $3.3M in additional revenue through fiber use. The majority of these impacts occurred in the second and third year after using fiber, reflecting the reality that it takes some time for businesses to integrate new broadband applications into their operations and to see their impact. Such direct impacts create spin-off effects across the rest of the local economy, often at a factor of 2 to 3 times the direct impacts.

Where investments in broadband are made with the goal of stimulating economic activity it is both essential and possible to measure the outcomes from those investments. It is equally essential to invest not only in broadband infrastructure, but also in providing a support and learning infrastructure to assist organizations in effectively adopting and utilizing e-solutions. Combined, broadband infrastructure and skills development generate the direct impacts for their business and the spill-over benefits for their communities. It is only through broad and effective utilization of broadband that economic benefits can be realized.

By Gary Dunmore, SNG

Click here to download this SNG position paper

If you think we can help, or would like to learn more about our broadband sustainable adoption services, please contact us.

How to invest wisely – 4 key guidelines

By Doug Adams

Now that you have funding, how can you make sure that your project lives up to the promise that got it funded in the Invest_wisely_SNGfirst place? Hundreds of broadband projects are being funded in 2010 – be it from Stimulus or some other funding source – but how many will truly become a community asset that drives economic and social benefits?

Key to making sure your project will have a return on investment with quantifiable outcomes starts with these four guidelines:

  1. Don’t focus on engineering: it’s all about awareness and adoption;
  2. Use data to drive decisions before, during, and after the project;
  3. Create a “platform for innovation”: investing in broadband is NOT just about the financials;
  4. Frame the benefits, measure them, and promote.

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