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Broadband: Why Broadband?
Contents
- Why Broadband?
- The 21st Century Business Tool
- Broadband vs Dial-up services
- Broadband in practice
- A Broadband checkup
- Harnessing the power of Broadband
- How will Broadband help you?
- How much will Broadband save you?
- What will Broadband cost you?
- Making the Broadband decision
- Broadband Implementation Action Plan
- More information
- Disclaimer
Why Broadband?
Assessing the costs and benefits of using broadband services
A guide to how broadband can help you to:
- cut your costs
- increase your revenue
- improve your working environment
- expand your business in a dynamic and competitive environment.
This guide is designed to assist the evaluation of broadband services for your organisation and outline the associated costs and benefits. It has been produced by the National Office for the Information Economy (NOIE), in cooperation with the Service Providers Industry Association (SPAN) Broadband Xchange project.
This guide will help you to undertake a cost benefit analysis for using broadband in your organisation and to develop an implementation strategy. Related information about broadband can be found in companion booklets available from NOIE (contact details are at the end of this document).
The 21st Century Business Tool
Broadband provides versatile, high speed, always connected access to the Internet and a growing range of online applications. It enables organisations to manage emails effectively, conduct complex online processes, access the Internet efficiently, improve customer service and implement visual and interactive online marketing and sales strategies. Core features of broadband are that it:
- doesn't need a dedicated phone line so you can still use the phone and Internet simultaneously
- can support multiple users at the same time
- improves your ability to provide cost-effective customer service
- is always connected (there is no need to dial up each time you want to use the Internet)
- is faster than dial-up Internet.
More information on the benefits of broadband is contained in the NOIE publication broadband for small business.
Just as the phone, mobile phone, fax and answering machine have become essential tools for modern organisations, broadband is fast becoming a common and central feature of today's work environment.
Broadband can directly impact your profitability, revenue, costs, efficiency and the quality and range of services and products you provide to your customers and clients, through:
- the achievement of cost savings
- revenue growth arising from new products, new customers and access to new markets
- new ways of doing business and delivering services
- improved organisational performance
- enhanced working conditions for your staff.
In short, the financial and operational viability of many organisations will become increasingly linked to their broadband capability. Thus, for most forward looking organisations the question is not "Should we implement broadband based services?" but "When and how should we implement broadband based services?"
Broadband vs Dial-up Services
Not yet online?
If you are planning for your organisation to go online you should consider going straight to a broadband connection.
You have a unique opportunity to leapfrog dial-up technology and avoid incurring additional (and unnecessary) costs if you decide to later upgrade to broadband.
If you initially install a dial-up connection, which shares your existing phone line, whenever you or your staff are online your customers will not be able to get through to you on the phone. This is why many organisations opt to get a second phone line, dedicated to Internet use when they have a dial-up connection.
When you add together the cost of a second phone line, with the dial-up service fees and the cost of phone calls to connect, the total is in the same order as a basic entry level broadband services cost of around $50 per month. Also, the broadband service offers more features.
To work out what kind of connection is best suited to you and your business you should discuss your needs with Internet Service Providers (ISPs) or refer to the information sources listed in one of the companion documents Broadband Resource, available from NOIE.
For most businesses it makes sense to go straight to broadband.
A forward looking approach
There are clear differences between what a broadband service can provide and what a dial-up service can offer. These are based on the speed, quality, and capacity of broadband.
It is like comparing using a pushbike and an air-conditioned sedan to travel between, say, Ballarat and Newcastle. Both get you there, but the sedan provides a faster, more comfortable ride, and you can take passengers with you. And in the case of broadband it isn't necessarily more expensive.
For example, broadband is more cost-efficient than dial-up in supporting the fast transfer of large data files, a high level of online interactivity, sophisticated online applications, the management of complex websites and the delivery of secure high quality online services.
As broadband capacity becomes more available at a steadily reducing cost, online services will tend to increase their interactive nature and their use of video images.
A broadband connection is needed to access this more intensive content. As time goes on this will increase the benefit of a broadband connection.
Broadband can deliver a competitive advantage. Businesses may find that their competitors are using broadband to their commercial advantage, improving their efficiency and opening up new markets for expansion. Those with a dial-up connection will not be able to exploit the emerging applications of the high speed online world and may not be able to compete.
Organisations that have experienced the transforming benefits of broadband do not tend to revert back to a dial-up service.
Broadband in practice
In the following case study of broadband in the travel industry, the implementation of broadband is proving to be a cost-effective strategy for achieving tangible commercial benefits.
Business Snapshot |
| The travel industry is a fast-changing, highly competitive market, with low margins and steep operating costs. To gain a competitive advantage, travel agents must reduce operating costs and increase productivity. Adopting a broadband DSL service supplied by Pacific Internet and MicroThin, a North Sydney corporate travel agency was able to secure nearly $1.15 million in additional sales through an increased capacity to serve customers and make additional bookings, as well as experiencing significant cost savings. |
Profit and Loss |
2002 Forecast | ||||||||||||||
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For further examples of broadband applications look at the companion document, Broadband in Regional Australia, and other case studies available from NOIE.
A Broadband Checkup
The first step in transforming your organisation to take advantage of broadband is to assess your organisation's potential to benefit from access to broadband services. Read the following list and tick the boxes that reflect how you want to improve your organisation's performance:
General
- Maintaining responsive contact with staff, customers, clients and suppliers
- Allowing staff to telework, operating from their home or elsewhere with the same response speeds and level of security as if they were in their office
- Reducing telephone call costs by, potentially, using Internet telephony or promoting communication via email rather than by phone
- Reducing printing and mailing costs by emailing accurate, up-to-date brochures and catalogues, or large complex data files to clients, customers and colleagues
- Making videoconferencing faster, smoother and more practical
- Improving staff training and development
E-business applications
- Accessing online financial services (eg. do your business banking electronically without leaving your office)
- Purchasing supplies online (to save time, secure a faster restock, reduce processing and ordering errors, minimise stock holding costs)
- Tendering for jobs online (such as through the Australian Government's Electronic Tendering System)
- Adopting online billing (thereby reducing the need for cumbersome paper billing and accounting systems)
Customer service
- Providing an online catalogue (customers can examine, order and pay for goods without leaving their premises, based on an accurate up-to-date catalogue)
- Increasing your trading hours (a website operates 24 hours a day, 7 days a week; customers will not be limited by business hours; and you won't incur overtime rates)
- Providing time saving services (through the website providing services such as product information, quotes and bookings, rather than taking up valuable staff time or alienating customers and clients by placing them in a telephone queue)
- Obtaining feedback on your service and products (without the added expense and low level of response from business reply mail)
Business expansion
- Increasing sales (a website gives you access to new markets, effectively displays your products, builds up an electronic customer and client base and greatly expands your marketing capabilities)
- Having your website linked from online directory services such as Yellow Pages
- Undertaking market research (through exploiting access to the wealth of online product and service information)
- Adding to your product range (through web-based promotion of cross linked products and services, and new web-based services)
- Improving access and sales to overseas markets
You may already be using a dial-up service in your business for some of the above. Broadband can do all the same things, and more. It can do them more efficiently, allowing you to more fully utilise your staff, resources and the potential of the Internet through the application of more sophisticated tools and strategies.
If you have ticked at least one box, then you are in the market for broadband services. The more you ticked the more compelling the case.
Harnessing the power of Broadband
Some misconceptions exist around the potential benefits of broadband. You may have considered moving to a broadband service before and thought:
- "My existing online system is perfectly adequate for my needs."
- Or you may have heard the following:
- "A broadband service will be more expensive than the online service I currently have."
- "Broadband will not deliver any significant new tangible benefits compared to my existing online service."
Before making any decision, you should consider the following questions about your existing service and determine whether broadband really is for you:
| Do you want to get faster updating of, and access to, web pages and faster speeds for the transfer of large data files? | Yes / No |
| Do you want to have the ability for staff to be on the phone and using the Internet (eg responding to email) at the same time? | Yes / No |
| Do you want to give several users in the one office independent access to the Internet through the same single connection? | Yes / No |
| Do you want to improve the quality, speed and reliability of your online services? | Yes / No |
| Do you want to improve the cost-effectiveness of your online services? | Yes / No |
| Do you want to reduce your organisation's product and service delivery costs? | Yes / No |
| Do you want to engage in more sophisticated online sales and marketing to expand your business? | Yes / No |
| Are your competitors offering broadband-based products and services? | Yes / No |
| Do you have a vision for an expanded role for your organisation? | Yes / No |
If you answered yes to one or more of these questions, then you should seriously consider a broadband service as a viable option for your organisation. The more online applications and benefits you seek, the more broadband will benefit your business and the more a dial-up service will struggle to meet your requirements.
Remember, too, that:
- the cost of an entry level broadband service is comparable to that of using a dedicated phone line for a dial-up service
- broadband gives you access to a superior and upgradeable online service
- broadband provides a better foundation for an expanding use of online services
- as you increase your use of online services, it is increasingly likely that your present service will be unable to meet your needs, and will become more expensive than broadband.
The next step is up to you. The following pages of this booklet take you through an assessment of how broadband will help you meet your organisational goals, what broadband will save you, what broadband will cost you and the decisions you need to make to implement broadband successfully in your organisation.
How will Broadband help you?
Now you have identified the potential benefit of broadband for your organisation, take time to define where you want your organisation to go over the next 3 years. This will set the scene for establishing the contribution that broadband can make to achieving this vision.
Revenue targets
Broadband can help you increase your revenue through:
- Better online marketing strategies using graphics and video
- Real time electronic interaction with clients
- A wider range of available online tendering opportunities
- New revenue from the development of new online products or services
- The automatic collection of information about customers in an online database to assist in generating repeat business at lower costs.
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Current |
Year 1 |
Year 2 |
Year3 |
| Target | $ | $ | $ | $ |
| What are the components of this increased revenue stream? | ||||
| Existing market | $ | $ | $ | $ |
| New markets | $ | $ | $ | |
| New products | $ | $ | $ | |
| Other funding sources | $ | $ | $ | $ |
Service delivery targets
Broadband can help improve your company's performance by:
- Better customer advice and support provided through the use of a website
- Improved customer service through use of online ordering, billing and payment systems
- Swifter, more convenient response to customer enquiries through the use of email
- Better research on product potential and production techniques based on web searches
- More up-to-date, accurate and visually compelling product information provided to customers
- Improved customer relationship management through online staff development and training
- Reduction in customer frustration resulting from being placed in a telephone queue.
Identify up to 5 service performance measures to suit your organisation and set 3 year targets. As an example, perhaps - number of customers; time spent per customer; quality of service; number of service inquiries; inquiry response time; number of product complaints; cost to deliver product or service.
Performance Measures | |||||
| 1 | $ | $ | $ | $ | |
| 2 | $ | $ | $ | $ | |
| 3 | $ | $ | $ | $ | |
| 4 | $ | $ | $ | $ | |
| 5 | $ | $ | $ | $ | |
Can you achieve these targets without using broadband? What are your competitors doing?
How much will Broadband save you?
Broadband allows you to do a range of business activities more efficiently, particularly in terms of time, and often also in terms of direct financial outlays. Broadband also gives you the capacity to increase the sophistication and efficiency of the management of your business, particularly in your online interaction with customers, staff and suppliers.
Using your current year's budget as a starting point, identify those expenditure areas of your organisation that may experience cost reductions - both in terms of staff time and outlays - as a result of introducing broadband access.
Budget item |
Annual expenditure |
Examples of potential savings |
Estimated savings |
| Communications | $ | Number of leased lines required; phone calls related to dial-up connections; demand for use of fax services. | $ |
| Postage, couriers | $ | Secure, fast electronic distribution versus hard copy distribution of documents via post, couriers and distribution companies, eg advertising material, manuals, administrative procedures, important documents such as contracts; etc. | $ |
| Printing | $ | Change in need for photocopying and printing services due to fast online distribution of material versus hard copy distribution. | $ |
| Travel | $ | Alternatives to local and major travel via superior videoconferencing facilities and timely and secure electronic file transfers. | $ |
| Staff | $ | Time savings; improved download times, particularly for large documents; if only one phone line, elimination of time waiting for Internet/phone access depending on which is already in use; faster online research capacity; easier updating of websites and online product catalogues. | $ |
| Marketing | $ | Option of sophisticated e-marketing strategies to complement or replace traditional advertising and marketing activities. | $ |
| Equipment | $ | Aggregation of hardware (eg individual modems versus one broadband connection); Online backup options; changed needs for photocopiers and fax machines. | $ |
| Inventory | $ | Cost savings from more sophisticated just-in-time ordering; electronic supply chain management arrangements; and capacity to access a greater range of online supplier facilities. | $ |
| Office | $ | Option to move to cheaper office premises due to reduced importance of geographic proximity to clients. | $ |
| Government | $ | Faster access to online government services and completion of regulatory requirements such as BAS returns. | $ |
| Accounts | $ | Capacity for more sophisticated and efficient online accounting systems to manage online processing and payments etc. | $ |
| Core business | $ | Improved access (in terms of time and complexity) to online information and its impact on product development and manufacture costs. Improvements to customer and supplier relationships. | $ |
What will Broadband cost you
Like any systems change, the implementation of a broadband service requires investment of both money and time. An orderly and planned approach to your investment in broadband is essential. Given the importance of broadband to your organisation's future, selection of options that achieve cost savings in the short term might be counterproductive in the longer term, as it may limit your organisation's ability to extend its broadband based capabilities in the future.
Fill in the table below to determine your up front costs for broadband.
Expenditure |
Item Description |
Cost |
| IT Equipment | A Personal Computer (desirably one for each user in your organisation) with enough memory to support your broadband applications, audio capability and network configuration.
Broadband Access Device, such as a special modem (often included in the cost of a broadband service) Printer. Local Area Network (if more than one user). CD Writer (particularly for back-up). Scanner. Video camera (for online videoconferencing). Possibly a digital camera. |
$ |
| Software | Operating system (usually provided with new computer).
Internet browser (usually provided with new computer). Firewall. Virus checker. Applications (word processor, spreadsheet, etc). |
$ |
| Internet Service Provider (ISP) | Provides broadband network and connections for monthly fee, may also levy data surcharges; may offer other services such as back-up, firewall, virus checking and anti-spamming. | $ |
| Web based activity | Email addresses.
Domain names. Website - hosting, establishment and maintenance. Database hosting. |
$ |
| Technical support | Broadband service configuration and installation.
Ongoing technical maintenance and support. New application developments. |
$ |
| Systems development | Review of existing back office systems.
Development of new procedures, systems and software. |
$ |
| Change management | Training of staff in new technology, procedures and ways of doing business.
Development of new procedures manuals. Project planning and management. Professional expert assistance and advice. |
$ |
More information on IT equipment, domain names, email addresses and websites can be found in NOIE's e-businessguide at 
www.e-businessguide.gov.au and at www.broadbandxchange.org.
Making the Broadband decision
Cost/benefit analysis
Using the information you have collected about new revenue, savings and establishment costs, you should now be able to reach some conclusions about the net cost/benefit of broadband to your organisation.
A simple spread sheet analysis, such as that found on the NOIE website under "Ready Reckoner" will assist in this regard.
In making a decision, also take into account the intangible benefits that might come with implementing broadband. For example the ease with which your organisation can respond to a rapidly changing marketplace (through having a broadband base that allows for expansion), retaining good quality staff (through providing an attractive, technologically advanced working environment) or being able to enjoy the benefits of teleworking from home (through a secure virtual private network).
In addition, assess the likely impact of any intangible costs - such as the need to train staff; the risks associated with introducing new ways of doing business; and the wider issues around organisational change.
Broadband Service Provider
Once you have made the decision to implement a broadband service, you will need to select a Broadband Service Provider. This choice depends on issues such as service availability, pricing schedules and technology. Information on these topics can be found in the NOIE brochure broadband for small business and at www.broadbandxchange.org. In addition, information on ISPs, broadband plans and service availability can be found at http://bc.whirlpool.net.au/.
Broadband Implementation Action Plan
As a final step, use the Broadband Implementation Action Plan on the following page as a template against which to check that you have completed the main elements (as appropriate to your organisation) needed to investigate, plan and implement a broadband service successfully.
Independent professional advice
Like any organisational change, the implementation of a broadband service needs careful planning and management. As outlined in this booklet, this includes an understanding of the cost of broadband implementation, an estimate of the cost savings its adoption will lead to, an assessment of new revenue that it will generate and a defined action plan for specifying, developing and implementing the new service and business arrangements.
In the interests of sound and responsible management practice, you may therefore consider it prudent to obtain independent, professional advice on your broadband implementation strategy. It would be prudent to shop around to find this advice.
Do I need to worry about security?
Any use of the Internet poses certain security risks and privacy risks for your computer files. With broadband you are always connected to the Internet and exposed to these risks as long as your computer is turned on. All Internet users, and especially those on broadband should invest in a good firewall and a virus checker to protect their computer.
A firewall watches your Internet connection and blocks others from trying to gain access to your computer without your permission. A virus checker scans your computer for known viruses.
Broadband Implementation Plan
Action |
Date Completed | ||||||||||||||||
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More information
About NOIE
NOIE is the Australian Government agency aimed at helping Australians create a world-class online economy and society through its work developing, overseeing, and coordinating Australian Government policy on e-commerce, online services, broadband and the Internet.
Burns Centre, 28 National Circuit, Forrest ACT 2603
GPO Box 390, Canberra ACT 2601
Phone: [+61] 02 6271 1666
Fax: [+61] 02 6271 1563
Email: broadband@noie.gov.au
Website: www.noie.gov.au
About SPAN Broadband Xchange
Broadband Xchange is a project established by SPAN, the Service Providers Industry Association. It was commenced in 2001 to demonstrate the value of broadband to typical business and consumer audiences and to stimulate the market to reach its full potential. It is funded by industry sponsors Alcatel, Connect, Ericsson, iPrimus, Microsoft, Neighbourhood cable, NEXTEP, Pacific Internet, Powercor, Request, Sensis, Singtel Optus, Southern Cross Cable Network and Telstra.
Level 11 / 157 Walker St, North Sydney NSW 2060
PO Box 1432, North Sydney NSW 2059
Phone: [+61] 02 9955 6100
Fax: [+61] 02 9955 2502
Email: info@broadbandxchange.org
Website: www.broadbandxchange.org
Department of Communications, Information Technology and the Arts
38 Sydney Avenue, Forrest ACT 2603
GPO Box 2154, Canberra ACT 2601
Phone: [+61] 02 6271 1000
Fax: [+61] 6271 1901
Email: dcita.mail@dcita.gov.au
Website: www.dcita.gov.au
Disclaimer
This brochure has been prepared by the National Office for the Information Economy (NOIE) and the Service Providers Industry Association (SPAN). While due care has been exercised by NOIE and SPAN to ensure the accuracy and currency of the material contained in this publication, it is recommended that users undertake their own analysis of information and obtain appropriate advice about their own circumstances. In particular, information about specific broadband services (including the nature and availability of services, price etc) should be confirmed with the service provider concerned.
© Commonwealth of Australia 2003
This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without the prior written permission from the Commonwealth. Requests and inquiries concerning reproduction and rights in this publication should be addressed to:
Manager, Public Affairs, National Office for the Information Economy, GPO Box 390, Canberra ACT 2601