the bellhaves decision matrix

8/14/2019 The BellHaves Decision Matrix

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BellHaves

Decision MatrixProject Manager: Mike Haverhals

Executive Sponsor: David Fraley

Project Request Subm. Date: 11.1.02

Criteria Weight Raw Score (1-100) Weighted Score

100% LongBoard Sylantro VocalData LongBoard Sylantro VocalData

Net Present Value 30% 85 85 95 25.5 25.5 28.5

Installation and Supportablility 30% 85 95 80 25.5 28.5 24

Features and Functionality 20% 85 90 95 17 18 19

Customer Satisfaction 20% 85 95 90 17 19 18

85 91 89.5



BellHaves

Capital RequestProject Manager: Mike Haverhals

Executive Sponsor: David Fraley

Project Request Subm. Date: 11.1.02

Project Description

Project Scope

Link to Strategic Imperatives

Impact of Deferring or Not Approving Project

The implementation of a Voice-over-Internet-Protocol (VoIP) system in a small to medium enterprise with the ability to expand to a larger enterprise.

What are the objectives?

To present a business case comparing 3 vendors of IP Centrex service and selecting one vendor's service for implementation based on an analysis of financial and service related matrices

What is the benefit associated with the investment? (generate revenue, increase productivity, cost reduction, other)Turn PBX sales into Rboc Service annuity.

Will this project require changes in current business processes? If yes, describe.

No.

How does this project tie into strategic initiatives?

It enables robust services at a minimal cost in comparison to existing carrier hosted PBX Centrex offerings.

How does this project impact other business units?It will replace carrier hosted PBX systems.

Quantify the impact of project delay or non approval.

Lost savings from expenses associated with use of carrier systems versus utilization of own network.

Inability to realize enriched services to end users.



BellHaves LongBoard

Summary P&L ($000s)Depreciated value linked to rental rate.

Asset LifeInitial Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 (Months)

Capital Expenditures

HardwareComputer Equipment 570 0 249 206 163 130 458 937 0 36

Switching 288 1,024 778 1,080 1,643 2,160 2,826 6,752 0 60

Phones 1,250 3,100 4,032 5,899 7,725 10,075 12,420 15,420 60

Software

Switching 810 2,058 1,602 1,780 2,237 2,697 3,284 7,636 0 36

OSS/BSS 80 0 0 0 0 0 0 0 0 48

Other 37 305 303 477 688 946 1,257 3,276 0 36

Leasehold Improvements 0 0 0 0 0 0 0 0 0 120

Total Capital (1,785) (4,637) (6,032) (7,575) (10,630) (13,658) (17,900) (31,021) (15,420)

Income/(Expense) Summary

Revenue na 3,925 17,030 36,368 58,544 86,403 121,886 166,173 222,393

Expense na (358) (1,269) (1,777) (2,341) (3,037) (3,820) (4,779) (6,320)

EBITDA na 3,567 15,940 34,777 56,407 83,602 118,339 161,708 216,439

EBITDA na 3,567 15,940 34,777 56,407 83,602 118,339 161,708 216,439Depreciation/Amortization na (550) (1,792) (3,286) (5,129) (7,667) (10,902) (15,149) (22,933)

EBIT na 3,017 14,148 31,491 51,278 75,935 107,437 146,559 193,506

NPV Payback

Net Cashflows (1,785) (1,070) 9,908 27,202 45,777 69,944 100,439 130,687 201,019

NPV ($Ms) 54.8$ Million

Total Capital Costs: (108,658) Total Revenue Generated: 712,722

Financial Summary



BellHaves LongBoard

Subscriber Assumptions Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

(Avg. customer base for full year per switch)

Switch 1 5,000 10,500 14,700 19,110 23,888 29,859 35,831 40,131

Switch 2 5,000 10,500 14,700 19,110 23,888 29,859 35,831

Switch 3 5,000 10,500 14,700 19,110 23,888 29,859 35,831

Switch 4 5,000 10,500 14,700 19,110 23,888 29,859

Switch 5 5,000 10,500 14,700 19,110 23,888

Switch 6 5,000 10,500 14,700 19,110

Switch 7 5,000 10,500 14,700

Switch 8 5,000 10,500

Switch 9 5,000

Switch 10 5,000Total Subscribers 5,000 20,500 40,700 64,010 92,308 126,944 168,748 219,850

New Subscribers 5,000 15,500 20,200 23,310 28,298 34,637 41,803 51,103



BellHaves LongBoard

Investment Detail (Per Switch) Initial Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

Hardware ($000s)

Computer Equipment 570 249 206 163 130 458 468 NA

Switching 288 512 778 1,080 1,643 2,160 2,826 3,376 NA

Software ($000s)

Switching 810 1,029 1,602 1,780 2,237 2,697 3,284 3,818 NA

OSS/BSS 80 - - - - - - NA

Other 37 153 303 477 688 946 1,257 1,638 NA



BellHaves LongBoard

Per Subscriber Pricing Assumptions Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

Per Subscriber Installation Charge 50.00 51.75 53.56 55.44 57.38 59.38 61.46 63.61

Baseline service charge

Replacement PBX Pricing 30.00 31.05 32.14 33.26 34.43 35.63 36.88 38.17Access charge (e.g., T1 or DSL) 8.00 8.28 8.57 8.87 9.18 9.50 9.83 10.18Phone 25.08 20.07 16.05 15.25 14.49 13.76 13.08 12.42Total 63.08 59.40 56.76 57.38 58.10 58.89 59.79 60.77

Baseline Premium (Must justify premium) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Rules based Call management 1.00 1.04 1.07 1.11 1.15 1.19 1.23 1.27Percent Utilization 2% 4% 6% 6% 6% 6% 6% 6%

Average price 0.02 0.04 0.06 0.07 0.07 0.07 0.07 0.08

Presence Telephony managemnt 1.00 1.04 1.07 1.11 1.15 1.19 1.23 1.27Percent Utilization 2% 4% 6% 6% 6% 6% 6% 6%Average price 0.02 0.04 0.06 0.07 0.07 0.07 0.07 0.08

Outlook Telephony management 1.00 1.04 1.07 1.11 1.15 1.19 1.23 1.27Percent Utilization 5% 10% 10% 10% 10% 10% 10% 10%Average price 0.05 0.10 0.11 0.11 0.11 0.12 0.12 0.13

Conference Services 285.71 295.71 306.06 316.77 327.86 339.33 351.21 363.50Percent Utilization 3% 5% 7% 7% 7% 7% 7% 7%Average price 8.57 14.79 21.42 22.17 22.95 23.75 24.58 25.45

Total Monthly Revenue 72 74 78 80 81 83 85 86

Annual revenues per subscriber ($s) 864 892 941 958 976 995 1,016 1,038

Annual revenues per subscriber ($000s) 0.86 0.89 0.94 0.96 0.98 0.99 1.02 1.04

Notes:1. Annual inflation is assumed to 3.5%.2. Markup on phone rental not to exceed a factor of 3.5x times depreciation value.



BellHaves LongBoard

Phone Purchase Initial Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

Executive Set (15% of Units)

Phone purchase price 450 441 432 424 415 407 399 391 Depreciation value (Based on 60 months) 7.50 7.35 7.20 7.06 6.92 6.78 6.64 6.51

Monthly rental value 26.25 25.73 25.21 24.71 24.21 23.73 23.25 22.79

Standard Set (85% of Units)

Phone purchase price 175 172 168 165 161 158 155 152 Depreciation value (Based on 60 months) 2.92 2.86 2.80 2.75 2.69 2.64 2.58 2.53Monthly rental value 10.21 10.00 9.80 9.61 9.42 9.23 9.04 8.86

Weighted Average Sets

Phone purchase price 243 239 234 229 225 220 216 211

Depreciation value (Based on 60 months) 4.06 3.98 3.90 3.82 3.74 3.67 3.59 3.52Monthly rental value 14.20 13.91 13.64 13.36 13.10 12.84 12.58 12.33

Phone capital expenditures $(000s)

New Subscribers 5,000 15,500 20,200 23,310 28,298 34,637 41,803 51,103

Phone Purchase Price 243.35 238.50 233.75 229.09 224.52 220.05 215.67 211.37

Total ($000s) 1,217 3,697 4,722 5,340 6,353 7,622 9,016 10,802



BellHaves LongBoard

Investment Detail Initial Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

Switch 1Hardware

Computer Equipment 570

Switching 288SoftwareSwitching 810OSS/BSS 80Other 37

Switch 2Hardware

Computer Equipment 0Switching 512

SoftwareSwitching 1,029OSS/BSS 0Other 153

Switch 3Hardware



Switch 4Hardware


SoftwareSwitching 1,602OSS/BSS 0

Other 303Switch 5

HardwareComputer Equipment 206Switching 1,080


Switch 6Hardware




Switching 1,643Software

Switching 2,237OSS/BSS 0Other 688

Switch 7Hardware

Computer Equipment 130Switching 2,160


Switch 8Hardware



Switching 3,284OSS/BSS 0Other 1,257

Switch 9Hardware


SoftwareSwitching 3,818OSS/BSS 0Other 1,638

Switch 10Hardware


Software

Switching 3,818OSS/BSS 0Other 1,638

TotalHardware

Computer Equipment 570 0 249 206 163 130 458 936Switching 288 1,024 778 1,080 1,643 2,160 2,826 6,752

Software

Switching 810 2,058 1,602 1,780 2,237 2,697 3,284 7,636OSS/BSS 80 0 0 0 0 0 0 0Other 37 306 303 477 688 946 1,257 3,276



BellHaves LongBoard

Revenue Detail ($000s) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

Subscribers 5,000 20,500 40,700 64,010 92,308 126,944 168,748 219,850Service revenue 0.9 0.9 0.9 1.0 1.0 1.0 1.0 1.0Total revenue switch 1 4,320 18,295 38,299 61,295 90,053 126,295 171,407 228,183

Installation revenue 250 802 1,082 1,292 1,624 2,057 2,569 3,251Other

Total 4,570 19,098 39,381 62,588 91,677 128,351 173,977 231,434



BellHaves LongBoard

Expense Detail ($000s) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

Maintenance 191 825 1,123 1,472 1,925 2,459 3,090 3,864Upgrades 0 0 0 0 0 0 0 0Incremental Personnel 167 444 654 869 1,112 1,361 1,689 2,456

Sub-detail 6 0 0 0 0 0 0 0 0Sub-detail 7 0 0 0 0 0 0 0 0Sub-detail 8 0 0 0 0 0 0 0 0Sub-detail 9 0 0 0 0 0 0 0 0Sub-detail 10 0 0 0 0 0 0 0 0Sub-detail 11 0 0 0 0 0 0 0 0Sub-detail 12 0 0 0 0 0 0 0 0Sub-detail 13 0 0 0 0 0 0 0 0Sub-detail 14 0 0 0 0 0 0 0 0Sub-detail 15 0 0 0 0 0 0 0 0Sub-detail 16 0 0 0 0 0 0 0 0Sub-detail 17 0 0 0 0 0 0 0 0Sub-detail 18 0 0 0 0 0 0 0 0Sub-detail 19 0 0 0 0 0 0 0 0Sub-detail 20 0 0 0 0 0 0 0 0Sub-detail 21 0 0 0 0 0 0 0 0Sub-detail 22 0 0 0 0 0 0 0 0Sub-detail 23 0 0 0 0 0 0 0 0Sub-detail 24 0 0 0 0 0 0 0 0

Sub-detail 25 0 0 0 0 0 0 0 0Total 358 1,269 1,777 2,341 3,037 3,820 4,779 6,320Maintenance & include 25 x 7 x 365



BellHaves Sylantro

Summary P&L ($000s)

Asset LifeInitial Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 (Months)

Capital Expenditures

HardwareComputer Equipment 250 518 268 277 287 297 307 636 0 36

Switching 0 0 0 0 0 0 0 0 0 60

Phones 0 1,217 3,697 4,722 5,340 6,353 7,622 9,016 10,802 60

Software

Switching 63 401 270 323 406 514 642 1,625 0 36

OSS/BSS 30 62 32 33 34 36 37 76 0 48

Other 375 776 402 416 430 445 461 954 0 36

Leasehold Improvements 0 0 0 0 0 0 0 0 0 120

Total Capital (718) (2,974) (4,669) (5,771) (6,498) (7,646) (9,069) (12,308) (10,802)

Income/(Expense) Summary

Revenue na 3,716 16,321 32,372 51,462 75,569 106,111 144,198 192,320

Expense na (250) (532) (885) (1,291) (1,781) (2,374) (3,256) (3,921)

EBITDA na 3,466 15,789 31,487 50,170 73,788 103,737 140,942 188,399

EBITDA na 3,466 15,789 31,487 50,170 73,788 103,737 140,942 188,399Depreciation/Amortization na (237) (1,061) (2,122) (3,413) (4,864) (6,562) (8,566) (11,460)

EBIT na 3,229 14,728 29,365 46,757 68,924 97,175 132,376 176,939

NPV Payback

Net Cashflows (718) 492 11,120 25,716 43,673 66,142 94,668 128,634 177,597

NPV ($Ms) 53.7$ Million

Total Capital Costs: (60,453) Total Revenue Generated: 622,068

Financial Summary



BellHaves Sylantro



Switch 1 5,000 10,500 14,700 19,110 23,888 29,859 35,831 40,131

Switch 2 5,000 10,500 14,700 19,110 23,888 29,859 35,831

Switch 3 5,000 10,500 14,700 19,110 23,888 29,859 35,831

Switch 4 5,000 10,500 14,700 19,110 23,888 29,859

Switch 5 5,000 10,500 14,700 19,110 23,888

Switch 6 5,000 10,500 14,700 19,110

Switch 7 5,000 10,500 14,700

Switch 8 5,000 10,500

Switch 9 5,000

Switch 10 5,000

Total Subscribers 5,000 20,500 40,700 64,010 92,308 126,944 168,748 219,850

New Subscribers 5,000 15,500 20,200 23,310 28,298 34,637 41,803 51,103



BellHaves Sylantro

Per Subscriber Pricing Assumptions Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

Per Subscriber Installation Charge 70.00 72.45 74.99 77.61 80.33 83.14 86.05 89.06

Baseline service chargeReplacement PBX Pricing 30.00 31.05 32.14 33.26 34.43 35.63 36.88 38.17Access charge (e.g., T1 or DSL) 8.00 8.28 8.57 8.87 9.18 9.50 9.83 10.18Phone 14.20 13.91 13.64 13.36 13.10 12.84 12.58 12.33Total 52.20 53.24 54.34 55.49 56.70 57.97 59.29 60.68

Baseline Premium (Must justify premium) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

ComCierge 15.00 15.53 16.07 16.63 17.21 17.82 18.44 19.08Percent Utilization 9% 6% 6% 6% 6% 6% 6% 6%Average price 1.35 0.93 0.96 1.00 1.03 1.07 1.11 1.15

ComMerchant 25.00 25.88 26.78 27.72 28.69 29.69 30.73 31.81Percent Utilization 5% 9% 9% 9% 9% 9% 9% 9%Average price 1.25 2.33 2.41 2.49 2.58 2.67 2.77 2.86

ComConsole 40.00 41.40 42.85 44.35 45.90 47.51 49.17 50.89Percent Utilization 2% 4% 4% 4% 4% 4% 4% 4%Average price 0.80 1.66 1.71 1.77 1.84 1.90 1.97 2.04

EMS 50.00 51.75 53.56 55.44 57.38 59.38 61.46 63.61Percent Utilization 1% 7% 7% 7% 7% 7% 7% 7%Average price 0.50 3.62 3.75 3.88 4.02 4.16 4.30 4.45

Total Monthly Revenue 56 62 63 65 66 68 69 71

Annual revenues per subscriber ($s) 673 741 758 776 794 813 833 854

Annual revenues per subscriber ($000s) 0.67 0.74 0.76 0.78 0.79 0.81 0.83 0.85

Notes:1. Annual inflation is assumed to 3.5%.2. Markup on phone rental not to exceed a factor of 3.5x times depreciation value.3. Due to the competitive nature of the industry, Sylantro's value added options are

only estimated prices since actual prices were not disclosed.



BellHaves Sylantro

Phone Purchase Initial Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

Executive Set (15% of Units)

Phone purchase price 450 441 432 424 415 407 399 391 Depreciation value (Based on 60 months) 7.50 7.35 7.20 7.06 6.92 6.78 6.64 6.51

Monthly rental value 26.25 25.73 25.21 24.71 24.21 23.73 23.25 22.79

Standard Set (85% of Units)

Phone purchase price 175 172 168 165 161 158 155 152 Depreciation value (Based on 60 months) 2.92 2.86 2.80 2.75 2.69 2.64 2.58 2.53Monthly rental value 10.21 10.00 9.80 9.61 9.42 9.23 9.04 8.86

Weighted Average Sets

Phone purchase price 243 239 234 229 225 220 216 211

Depreciation value (Based on 60 months) 4.06 3.98 3.90 3.82 3.74 3.67 3.59 3.52Monthly rental value 14.20 13.91 13.64 13.36 13.10 12.84 12.58 12.33

Phone capital expenditures $(000s)

New Subscribers 5,000 15,500 20,200 23,310 28,298 34,637 41,803 51,103

Phone Purchase Price 243.35 238.50 233.75 229.09 224.52 220.05 215.67 211.37

Total ($000s) 1,217 3,697 4,722 5,340 6,353 7,622 9,016 10,802



BellHaves Sylantro


Switch 1Hardware


SoftwareSwitching 63OSS/BSS 30Other 375

Switch 2Hardware


Software

Switching 201OSS/BSS 31Other 388

Switch 3Hardware


SoftwareSwitching 201

OSS/BSS 31Other 388

Switch 4Hardware


SoftwareSwitching 270OSS/BSS 32

Other 402Switch 5

HardwareComputer Equipment 277Switching 0


Switch 6Hardware


S



Switching 0Software


Switch 7Hardware



Switch 8Hardware


Switching 0Software


Switch 9Hardware



Switch 10Hardware


Software


TotalHardware

Computer Equipment 250 518 268 277 287 297 307 636Switching 0 0 0 0 0 0 0 0

SoftwareSwitching 63 401 270 323 406 514 642 1,625OSS/BSS 30 62 32 33 34 36 37 76Other 375 776 402 416 430 445 461 954

B llH S l



BellHaves Sylantro



Installation revenue 350 1,123 1,515 1,809 2,273 2,880 3,597 4,551Other

Total 3,716 16,321 32,372 51,462 75,569 106,111 144,198 192,320

BellHaves S l t



BellHaves Sylantro


Maintenance 185 265 355 459 581 723 1,063 1,063Upgrades 0 0 0 0 0 0 0 0Incremental Personnel 65 267 529 832 1,200 1,650 2,194 2,858Sub-detail 6 0 0 0 0 0 0 0 0Sub-detail 7 0 0 0 0 0 0 0 0Sub-detail 8 0 0 0 0 0 0 0 0Sub-detail 9 0 0 0 0 0 0 0 0Sub-detail 10 0 0 0 0 0 0 0 0Sub-detail 11 0 0 0 0 0 0 0 0Sub-detail 12 0 0 0 0 0 0 0 0Sub-detail 13 0 0 0 0 0 0 0 0Sub-detail 14 0 0 0 0 0 0 0 0Sub-detail 15 0 0 0 0 0 0 0 0

Sub-detail 16 0 0 0 0 0 0 0 0Sub-detail 17 0 0 0 0 0 0 0 0Sub-detail 18 0 0 0 0 0 0 0 0Sub-detail 19 0 0 0 0 0 0 0 0Sub-detail 20 0 0 0 0 0 0 0 0Sub-detail 21 0 0 0 0 0 0 0 0Sub-detail 22 0 0 0 0 0 0 0 0Sub-detail 23 0 0 0 0 0 0 0 0Sub-detail 24 0 0 0 0 0 0 0 0

Sub-detail 25 0 0 0 0 0 0 0 0Total 250 532 885 1,291 1,781 2,374 3,256 3,921

BellHaves Sylantro



BellHaves Sylantro

Depreciation Schedule ($000s) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

Year 1 237 237 237 237 237 237 237 237Year 2 824 824 824 824 824 824 824Year 3 1,061 1,061 1,061 1,061 1,061 1,061Year 4 1,291 1,291 1,291 1,291 1,291

Year 5 1,451 1,451 1,451 1,451Year 6 1,698 1,698 1,698Year 7 2,004 2,004Year 8 2,894Total 237 1,061 2,122 3,413 4,864 6,562 8,566 11,460



BellHaves VocalData



BellHaves VocalData



Switch 1 5,000 10,500 14,700 19,110 23,888 29,859 35,831 40,131

Switch 2 5,000 10,500 14,700 19,110 23,888 29,859 35,831

Switch 3 5,000 10,500 14,700 19,110 23,888 29,859 35,831Switch 4 5,000 10,500 14,700 19,110 23,888 29,859

Switch 5 5,000 10,500 14,700 19,110 23,888

Switch 6 5,000 10,500 14,700 19,110

Switch 7 5,000 10,500 14,700

Switch 8 5,000 10,500

Switch 9 5,000

Switch 10 5,000

Total Subscribers 5,000 20,500 40,700 64,010 92,308 126,944 168,748 219,850

New Subscribers 5,000 15,500 20,200 23,310 28,298 34,637 41,803 51,103

BellHaves VocalData



Investment Detail (Per Switch) Initial Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

Hardware ($000s)

Computer Equipment 606 275 285 295 305 316 327 338 NA

Switching 1,250 1,375 1,050 1,103 1,194 1,493 1,493 1,075 NA

Software ($000s)Switching 4,086 313 344 263 276 299 373 373 NA

OSS/BSS - - - - - - - - NA

Voicemail 149 164 125 131 142 178 178 128 NA



BellHaves VocalData




Switch 1Hardware



Switch 2Hardware


Software


Switch 3Hardware


SoftwareSwitching 313

OSS/BSS 0Other 164

Switch 4Hardware


SoftwareSwitching 344OSS/BSS 0

Other 125Switch 5Hardware



Switch 6HardwareComputer Equipment 305





Switch 7Hardware



Switch 8Hardware


Switching 1,493SoftwareSwitching 373OSS/BSS 0Other 178

Switch 9Hardware



Switch 10Hardware



TotalHardware

Computer Equipment 606 550 285 295 305 316 327 676Switching 1,250 2,750 1,050 1,103 1,194 1,493 1,493 2,150

SoftwareSwitching 4,086 626 344 263 276 299 373 746

OSS/BSS 0 0 0 0 0 0 0 0Other 149 328 125 131 142 178 178 256

BellHaves VocalData

Revenue Detail ($000s) Y 1 Y 2 Y 3 Y 4 Y 5 Y 6 Y 7 Y 8





Installation revenue 250 802 1,082 1,292 1,624 2,057 2,569 3,251Other

Total 4,870 20,215 40,599 65,049 95,970 135,250 184,389 246,592

BellHaves VocalData





Maintenance 987 2,309 2,641 2,996 3,418 3,856 4,571 4,571Upgrades 0 0 0 0 0 0 0 0Incremental Personnel 75 308 611 960 1,385 1,904 2,531 3,298Sub-detail 6 0 0 0 0 0 0 0 0



Sub-detail 25 0 0 0 0 0 0 0 0Total 1,062 2,617 3,252 3,957 4,803 5,761 7,102 7,869

the bellhaves decision matrix

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