SIBC 2024
11/10/2024
Securely leveraging APIs to proceed into a connected future
Henry
Telstra
Mike
Mudassar
Aki
Avance Consulting
Executive Summary: Proceeding into a connected future by securely leveraging APIs to benefit everyone
2
Aim
Situation
Strategy
How can Telstra securely leverage APIs and facilitate growth to build a connected future where everyone can thrive by 2029?
Key Challenge #1
Continuous development and monetisation of APIs
Key Challenge #2
Whether to move quickly to defend against competitors
Key Challenge #3
Ensuring adequate security to prevent data leaks
Impact
2.3%
CAGR by 2029
5%
Increase in market share over 7 years
Develop API to Speed up network connection for customers
Synthesize existing data to explore new revenue streams
Secure our data against potential data leaks and cyber attacks by vamping our security
$25,979 mil
Revenue up to 2029
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
A Crisis in the Telecommunications Industry: Building distrust in Telco companies have led to negative brand perception industry-wide
3
Most distrusted company in Australia as of June 2024
6th
Lowest for customer satisfaction
3rd
Source: TIO, 2024
Optus 2022 Data Breach
The 2022 data breach left Optus scrambling and heavily damaged its reputation, costing over $140 million in damages related to the breach.
Since 2022, Optus has seen its customer satisfaction and trust hit nationwide lows.
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Competition in API development: Leading telcos looking to expand their offerings to APIs, but no one has taken any major steps
4
Competitor Mapping
Telstra is positioned as high priced, high coverage in the Telecom market
High
Low
Low
High
Coverage
Price
Direct or Indirect
Monetisation
Early adopter
or Laggard
Worries for API Development
Coverage across Australia
99.6%
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
The Chicken and the egg: A major challenge to overcome in the API development flywheel
5
Developers need more API capabilities from Telcos to create a proven use case
Telcos want to see a proven use case for APIs before further investment
Proven demand
Direct revenues attributable to API products
Potential scale and volume of API usage
Less to use and build upon
API capabilities are not consistent across telcos
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
3 Key Challenges that Telstra faces when proceeding to build a safe connected future with APIs
6
Key Challenge #1 - Industry woes about security and distrust
Key Challenge #2 - Threat from competitors in API development
Key Challenge #3 - Lack of developmental and monetisation plans for API
Safe �Connected Future
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
3 Key Challenges that Telstra faces when proceeding to build a safe connected future with APIs
7
Key Challenge #1 - Industry woes about security and distrust
Key Challenge #2 - Threat from competitors in API development
Key Challenge #3 - Lack of developmental and monetisation plans for API
Safe �Connected Future
Key Takeaway
Telstra must prioritise creating secure, differentiated APIs that have strong monetisation models
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
8
Key Challenge #1
1
Key Challenge #2
2
Key Challenge #3
3
Key Question
How can Telstra securely leverage APIs and facilitate growth to build a connected future where everyone can thrive by 2029?
Customer Persona: Meet Andrew, one of our target customers for Telstra’s new APIs
9
Andrew Lam
Hard-working
Always aims for the best in his personal and work life
Bio
Middle-aged man living in Sydney, NSW
Works as the CTO at a major ticketing website company
Has been suffering from health issues, but his doctors have been unable to pin down their origins
Goals and Needs
Pain points
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Major hurdles: Andrew faces three key issues that prevent him from achieving a safely connected future
10
Speed
Synthesize
Secure
Safe Connected Future
Company unable to handle influx of customer requests
Lack of necessary treatment to his health problems
Worried about security for his personal and company information
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Strategy 1:
Speed
Faster or Disaster: Internet plans have been increasing, but not all businesses require round-the-clock speedy internet
12
Internet in Australia
Industries Reliant on Internet Speed
Download Speed | Entry-level price | Mid-range price | High-range price |
25 Mbps | $65 ↑0.4% | $70 ↑0% | $79 ↑5.9% |
50 Mbps | $75 ↑7.1% | $80 ↑1.3% | $85 ↑4.5% |
100 Mbps | $95 ↑0.5% | $100 ↑0% | $110 ↑0.9% |
NBN Fixed Broadband at Individual Customer Level
Source: ACCC, 2023
Online Betting Sites
A short window before matches or races
Online Event Ticket Sales
Right before tickets go on sale and during ticket sales
eCommerce Sites
During flash sales
Mortar and Brick Stores
POS systems require fast speeds during peak hours
Increase in median advertised NBN prices from 2017 to 2023
20.2%
of Maximum upload plan speeds achieved in 2023
86.2%
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Introducing Roadrunner: Quality-on-demand API to provide businesses an option to temporarily boost their internet speeds
13
Roadrunner API in Use on My Telstra App
Roadrunner API
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Looking forward: Roadrunner to make use of machine learning to understand and tailor its service to each customer
14
14
Key Advantages
Scalable to accommodate new users in similar industries
Long-time customers are able to have the service tailored to their needs
1
2
Machine Learning
Streamlined Billing
Roadrunner API
Customer
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Major hurdles: Andrew faces three key issues that prevent him from achieving a safely connected future
15
Speed
Synthesize
Secure
Safe Connected Future
Lack of necessary treatment to his health problems
Worried about security for his personal and company information
Company can now handle sudden spikes in network traffic
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Strategy 2:
Synthesise
Synthesize: How can Telstra expand its API offerings with BioSyn API through Telstra Health?
17
Telstra Health
Machine Learning
BioSyn API
Healthcare Startups/Corporations
Academic Institutions
Hospitals
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Synthesize: What is Synthetic Data and its implications, along with regulations that come with it
18
Synthetic Data
Definition
Artificially generated data that mimics real-world data structure. In Biomedical field, synthetic data refers to patient records without identifiable information
Safe and Anonymized
Does not involve real patient’s information, ensures regulatory compliance and accommodates privacy concerns with data sharing
Research and Analytics
Used to conduct experiments, trials and used to develop healthcare application without violating privacy laws
Australia Regulation
Synthetic Data and Privacy Compliance
The Privacy Act, under the Australian Privacy Principles (APPs), outlines strict requirements for handling personal information, particularly sensitive health data. Synthetic data offers a compliance-friendly solution as it’s de-identified and does not relate to identifiable individuals.
Australian Data Sharing Principles
These principles promote the sharing and reuse of public sector data while maintaining privacy and confidentiality. The use of synthetic data aligns with these principles by allowing for valuable insights and research without compromising individual privacy.
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Synthesize: How can Telstra monetize its API offerings to ensure that maximum value is derived?
19
Innovate
Clinical
Foundation
Direct API Subscription Model
A$1,500/month
API Access to EHR records in analytics format
100,000 patient record
Refreshed Quarterly
A$7,000/month
A$70,000/month
Reasoning
API Access to EHR records in analytics format and FHIR formats
1,000,000 patient record
Refreshed Quarterly
API Access to EHR records in analytics format and FHIR formats
All patient records
Refreshed Quarterly
Direct Sales Model
Targeting key clients such as hospitals, research institutions or biotech companies, as feedback and brand establishment is going to be vital
Project Based Usage
Research projects, clinical trials often have intensive data usage, where a subscription based model satisfies client’s needs
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
The Chicken and the egg: How Telstra’s new API solutions can break into the API development flywheel
20
Developers need more API capabilities from Telcos to create a proven use case
Telcos want to see a proven use case for APIs before further investment
BioSyn API
Roadrunner API
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
The Chicken and the egg: How Telstra’s new API solutions can break into the API development flywheel
21
Roadrunner API
BioSyn API
Pilot Project
Minimizing initial investment by adopting a lower patient data quota, test API in controlled environment, providing real-world application value
Fostering Engagement
Engaging developers to experiment with API and simulate interest to increase broader adoption of API once fully launched
Easily Scalable
Roadrunner can use machine learning to apply data from previous users to future users in similar industries, allowing it to accommodate a large number of users
Trackable Real-time Data
All data from Roadrunner can be tracked in real-time, allowing for Telstra to directly link revenue to the API
Case Study: Syntegra
Offerings: Synthetic Data API targeting US market, generating high fidelity, privacy-preserving synthetic health data
�Achievement: First-mover in the synthetic data market estimated to reach $30 billion
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Major hurdles: Andrew faces three key issues that prevent him from achieving a safely connected future
22
Speed
Synthesize
Secure
Safe Connected Future
Worried about security for his personal and company information
Company can now handle sudden spikes in network traffic
Medical professionals now understand how to treat Andrew
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Strategy 3:
Secure
24
Secure: The cybersecurity sector's rapid expansion and the escalating threat of costly data breaches underscores its critical importance in today's business
Market Value in Cybersecurity Market (Australia)
Source: Statista
Optus Data Breach
Public-facing API
Vulnerability package
7.35%�
CAGR until 2029
US$5.76bn
Market volume
Sensitive data
Source: The Express Tribune
Why Cybersecurity
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Secure: Telstra offers advanced network security services and capabilities while AWS provides robust cloud-native security features
25
Telstra Integrated Cybersecurity System
AWS Security Hub
Current offering
Telstra OpenMSS platform
Security Operations Centre (TSOC)
Sovereign SecureEdge
Cyber Detection and Response
Network Security Services
Amazon GuarDuty
Amazon Firewall Manager
AWS IAM Access Analyzer
Amazon Inspector
Amazon Macie
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Secure: Implementing a “Double Shield” Approach for Data at Rest using AWS Security Hub and Telstra's Cybersecurity Services
26
Data
AWS Security Hub
Telstra Integrated Cyber Security Ecosystem
Existing Integration
Comprehensive Security
Provide a more comprehensive view of security across network and cloud environments
24/7 Managed Security Services
Feeding cloud-specific security insights into Telstra's SOC for detection and monitoring
Compliance
Ensuring that customers can meet both local and international security requirements
AWS Cloud Service
Bi-Directional API Model
Key Benefits
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Secure: Utilizing Robust Encryption Strategies to Safeguard Data
in Transit
27
Key Advantages
Prevention of man-in-the-middle attacks
Authentication and non-repudiation
Asymmetric encryption
2
3
End User
Ciphered Data
Data in transit
Encryption - Public Key
Decryption - Private Key
RSA Encryption
1
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Secure: Evaluating Synthesize and Speed Solutions under the CIA Model while ensuring Regulatory Compliance
28
Confidentiality
Integrity
Availability
Confidentiality
Availability
Integrity
Compliance
ISO 27001
Advanced Threat Detection
When Encrypting and Integrating with
Operational Efficiency
Synthesize
Roadrunner API
BioSyn API
Speed
ISM PROTECTED level certification
Key takeaway
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Andrew is able to achieve a Safely Connected Future together with Telstra by adopting our 3S solutions
29
Speed
Synthesize
Secure
Safely Connected Future
Company can now handle sudden spikes in network traffic
Medical professionals now understand how to treat Andrew
His personal and company information is safe and secure
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Implementations
The recommendation implementations will generate an incremental cost of $193.5 Million AUD up to 2029
31
Cost driver after implementing the recommendations (in AUD)
Cost Drivers
Speed
Synthesis
Secure
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
The recommendation implementations will grow our revenue up to
$25,979 Million AUD up to 2029
32
Revenue after implementing the recommendations (in AUD, 000)
Other Impacts
37.9%
Operating Margin by 2029
22.5%
Net Margin by 2029
55%
EBITDA/Revenue
by 2029
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Telstra’s Implementation Timeline for each of the solutions for the challenges faced
33
2025
2026
2029
Strategy Implementation Timeline
Key Milestone
2nd Quarter of 2025:
Launch of Roadrunner API on application
4th Quarter of 2026:
Completion of Machine Learning Model
3rd Quarter of 2025:
Launch of AWS Security Hub and RSA Encryption
Speed
Synthesize
Operation
Process
Planning/
Development
Secure
2027
2028
A
B
C
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Risk & Mitigations: Telstra should take possible risks into consideration and take initiative to mitigate risks during implementation
34
Risks & Mitigations
Risks
Mitigations
Reverse Engineering of Synthetic Data
Using Generative Adversarial Networks, widely used for generating synthetic data to ensure security
Increasing competition in the industry
Diversify current offerings into other sectors to expand revenue streams
Illustration of Risk Positions
Low
High
Probability
Impact
Low
High
Evaluating Risk impacts
Medium
Regulatory Compliance Volatility
Conduct regular regulatory impact assessments
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Executive Summary: Proceeding into a connected future by securely leveraging APIs to benefit everyone
35
Aim
Situation
Strategy
How can Telstra securely leverage APIs and facilitate growth to build a connected future where everyone can thrive by 2029?
Key Challenge #1
Continuous development and monetisation of APIs
Key Challenge #2
Whether to move quickly to defend against competitors
Key Challenge #3
Ensuring adequate security to prevent data leaks
Impact
2.3%
CAGR by 2029
5%
Increase in market share over 7 years
Develop API to Speed up network connection for customers
Synthesize existing data to explore new revenue streams
Secure our data against potential data leaks and cyber attacks by vamping our security
$25,979 mil
Revenue up to 2029
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Appendix
Appendix Home Page
37
Strategy 2: Synthesise
Financials
6.1 WACC 6.6 Annual Report / 2 / 3
6.2 DCF Model 6.7 Hospital Numbers
6.3 Annualized ROI 6.8 Biotech Numbers
6.4 Forecast Income Statement 6.9 Reference
6.5 Assumptions
Strategy 3: Secure
4.1 Cybersecurity Market in Australia
4.2 Telstra Cybersecurity Service
4.3 AWS Security Hub / AWS 2
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Telecommunications industry overtakes Social Media as the most distrusted industry - Roy Morgan February 2023
38
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Roy Morgan June 2024 Quarterly Report, Telstra 6th most distrusted brand
39
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Telstra ranks 3rd lowest in CHOICE 2023 ISP Survey
40
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Optus 2022 Data Breach Cost
41
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Telstra’s small business NBN plans from 2019 and 2024
42
2019
2024
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
ACCC’s 2023 Annual Report
43
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
ACCC’s 2023 Annual Report cont.
44
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Appendix: Syntegra Pricing Model
45
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
WACC
46
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
DCF Model
47
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Annualized ROI
48
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Forecast Income Statement
49
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Assumption
50
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Reference of income statement
51
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Annual Report 2022
52
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Annual Report 2022 cont.
53
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Annual Report 2023
54
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Annual Report 2023 cont.
55
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
2024 - Annual Report
56
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Secure: Cybersecurity Market in Australia
57
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Secure: Telstra cyber security service
58
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Secure: AWS Security Hub
59
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Secure: AWS Security Hub
60
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Secure: Bi directional API
61
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Secure: RSA
62
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Secure: CIA Model
63
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Number of Hospitals in Australia
64
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Number of Biotech Companies in Australia
65
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Secure: ISO and ISM
66
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
BELOW ARE OLDER SLIDES
67
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Alumni Giving Back will serve as a valuable contribution to the AoH Foundation, creating opportunities for more individuals like John
68
Meet John!
1
2
3
On Program
Graduated
Give back
Enroll in GED program at AoH DC
Earned a high school diploma equivalent
Voluntarily donate annually to AoH Foundation
John Brown
Landed in a job with $45k/year salary as a junior construction supervisor.
$Xk
Estimated Contribution in
SY 24-25
$X
Annual Contribution per Alumni
X%
Estimated Alumni Participation
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
ECOSYSTEM
69
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Educate: Developing trust with public through Pilot Study
70
Initiate Pilot Study
Hospitals
National Health Institution
Utilize data received from Pilot Study to communicate effects of product to the public
Results of Pilot Study available to public access from Novo Nordisk official channels
Key Takeaway
Increase public’s trust towards Novo Nordisk
Reduce fear towards Obesity Medications
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Educate: Implementing Best Practice Assistant on packaging to teach consumers
71
Ensure accuracy in medicine selection
Educate consumers regarding products
Offer Convenience and �Time Savings
Ipleents
Best Practice Assistant
QR code implemented on medical product packaging
Consumers can receive a detailed report of the use of medicine, dosage, possible effects about the product
Consumers can receive recommendations towards mitigation of side effects and what to be aware of
Consumers
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
How can AoH DC Charter School be financially self-sufficient with the government-funded per-pupil financing?
72
Key Assumptions:
Source: AoH Audited Financial Statements, Form 990, Team Estimations
Growing revenues and more efficient costs allocations increases costs coverage
Costs Efficiency
AoH DC and AoH Foundation shares the following costs:
Growing Revenues
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
How can Academy of Hope transform its organizational structure and resource allocation to enable its scalable expansion by 2030?
73
Set
Ready
Go!
Well-positioned asset allocation
Sustainable financing
Legal approval
Balance of Interest
Favorable expansion target state
Scalable model
School Retention
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
With a plan for efficient resource allocation and self-sufficiency, Academy of Hope is now “set” for the run
74
Set
Ready
Go!
Well-positioned asset allocation
Sustainable financing
Legal approval
Balance of Interest
Favorable expansion target state
Scalable model
School Retention
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
We have shortlisted 3 states under consideration for possible expansion according to key selection criteria
75
Virginia
Indiana
Maryland
Govt
Support/ Regulation
Landscape & Demand
Geographical Consideration
$75mn
for Per-Pupil Operation Grants
3%
Unemployment rate
1.9%
Unemployment rate
$60mn
was provided for vital start-up funds (in 2017)
98%
of the Normal School amount of support is allocated to Charter Schools
3.9%
Unemployment rate
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
We have shortlisted 3 states under consideration for possible expansion according to key selection criteria
76
Virginia
Indiana
Maryland
Govt
Support/ Regulation
Landscape & Demand
Geographical Consideration
$75mn
for Per-Pupil Operation Grants
3%
Unemployment rate
1.9%
Unemployment rate
$60mn
was provided for vital start-up funds (in 2017)
98%
of the Normal School amount of support is allocated to Charter Schools
3.9%
Unemployment rate
Key Takeaways
Maryland has experienced growth in its charter school sector.
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
How can the Hybrid Model facilitate scalability for further expansion of the Academy of Hope?
77
Foundation
Schools
Hybrid Model
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
The basic hybrid model must be expanded to account for the increased number of schools
78
Foundation
Schools
Hybrid Model
National Fn. Board Member
Regional Fn.
Board Member
School
Board Member
Legend
Schools
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Regional foundations can act as a bridge between local schools and the national foundation
79
Foundation
Schools
Hybrid Model
National Fn. Board Member
Regional Fn.
Board Member
School
Board Member
Legend
Regional Fn.
Schools
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
The national foundation will oversee regional foundations and local schools
80
National Fn.
Regional Fn.
Schools
Foundation
Schools
Hybrid Model
National Fn. Board Member
Regional Fn.
Board Member
School
Board Member
Legend
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Setting up a new charter school requires $X million, which can be funded under currently estimated financial conditions
81
Initial Costs to Set Up the New Charter School
Source of Funding
$Xmn
Estimated Current Assets in SY 25-26
Credit
May consider taking credits from banks (e.g. PNC) if the macro supports
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
The expanded hybrid model allows for scalability while balancing all interests
82
Foundation
Schools
Hybrid Model
National Fn. Board Member
Regional Fn.
Board Member
School
Board Member
Legend
Key Features
Replicable Model
Across the Country
Maintain the Distribution & Facilitation of Interests
National Fn.
Regional Fn.
Schools
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
How can Academy of Hope transform its organizational structure and resource allocation to enable its scalable expansion by 2030?
83
Set
Ready
Go!
Well-positioned asset allocation
Sustainable financing
Legal approval
Balance of Interest
Favorable expansion target state
Scalable model
School Retention
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
With a target location and scalable model, Academy of Hope can now “Go!” for an expansion run
84
Set
Ready
Go!
Well-positioned asset allocation
Sustainable financing
Legal approval
Balance of Interest
Favorable expansion target state
Scalable model
School Retention
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Academy of Hope’s Implementation Timeline
85
Set
Go!
2024
2025
2026
2027
Strategy Implementation Timeline
2028
Key Milestone
2nd Quarter of 2024:
Organizational restructuring completed
1st Quarter of 2025:
Launch of Alumni Giving Back Program
1st Quarter of 2027:
First launch of AoH 2
4th Quarter of 2029:
First launch of AoH 3
2029
Ready
C
B
A
Operation
Process
2030
Planning
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Executive Summary: Academy of Hope’s strategy to restructure and allocate resources for expansion
86
Aim
Situation
Strategy
Ready
Legal, interests, retention
How can Academy of Hope transform its organizational structure and resource allocation to enable its scalable expansion by 2030?
Set
Self Sufficiency and Additional Resource
Key Challenge #1
Structure
Key Challenge #2
Resource Allocation
Go!
Location and scalability
Key Challenge #3
Implementation
Impact
x
Students served
in 2030
x
Years to break even
Xmn
in private grants & contributions in 2030
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
By 2030, Academy of Hope is predicted to continue making positive impacts
87
$200,000
USD of sales revenue
X
Years to
break even
Xmn
In private grants & contributions in 2030 for AoH DC
a
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
88
THANK YOU!
McDonough Business Strategy Challenge 2024
Recap: How can Academy of Hope transform its organizational structure and resource allocation to enable its scalable expansion by 2030?
89
Set
Ready
Go!
Well-positioned asset allocation
Sustainable financing
Legal approval
Balance of Interest
Favorable expansion target state
Scalable model
School Retention
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Solution Recap #1 - Ready
90
Ready
Main Ideas
Hybrid Model for Foundation-School Relationship
The Foundation is registered as a CMO
Legal approval
Balance of Interest
School Retention
Charter Management Organization
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Solution Recap #2 - Set
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Set
Main Ideas
AoH DC Charter School Financial Self-Sufficiency
Shift the Private Donations to the Foundation
Alumni Giving Back Program
Well-positioned asset allocation
Sustainable financing
John Brown
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Solution Recap #3 - Go!
92
Main Ideas
Baltimore, Maryland as the first expansion point
Favorable expansion target state
Scalable model
Go!
Hybrid model with regional layer
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Recap: With a target location and scalable model, Academy of Hope can now “Go!” for an expansion run
93
Set
Ready
Go!
Well-positioned asset allocation
Sustainable financing
Legal approval
Balance of Interest
Favorable expansion target state
Scalable model
School Retention
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
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Appendix
McDonough Business Strategy Challenge 2024
There are several possible organizational governance models that defines the relationship between the foundation and schools
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Foundation
Schools
Schools
Foundation
Foundation
Schools
Appoint
Appoint
Foundation
Board Member
School
Board Member
Legend
Legal approval
School retention
Balance of interests
Legal approval
School retention
Balance of interests
Legal approval
School retention
Balance of interests
Foundation Model
Schools Model
Hybrid Model
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
The hybrid model is the most optimal choice for Academy of Hope
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Foundation
Schools
Foundation
Board Member
School
Board Member
Legend
Legal approval
School retention
Balance of interests
Hybrid Model
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
The hybrid model has the highest chances of legal approval from PCSB and also balances the interests of all parties
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No concerns of either side overstepping statutory authority
Having a stake in the foundation encourages retention
All sides' voices are heard in every organization
Foundation
Schools
Legal approval
School retention
Balance of interests
Hybrid Model
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
To improve retention of schools within its network, the Academy of Hope Foundation should register as a Charter Management Organization
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Charter Management Organization
AoH 1
AoH 2
AoH 3
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Being a Charter Management Organization has many benefits that can encourage schools’ retention in the Academy of Hope network
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Charter Management Organization
AoH 1
AoH 2
AoH 3
Reduce cost: Share back office functions such as accounting, data analysis, teacher training
Tax benefits: both donors and foundation can benefit from tax deductions due to 501(c)(3) status (as opposed to EMOs)
Streamline educational resources: designing or replicating success of Academy of Hope educational model and curricula
Encourage schools’ retention in the Academy of Hope network by increasing reliance in terms of operations
Benefits
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
Making the Academy of Hope Foundation a Charter Management Organization solves the school retention problem posed by the governance structure
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Foundation
Schools
Legal approval
School retention
Balance of interests
Charter Management Organization
Foundation
Schools
Legal approval
School retention
Balance of interests
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
How can Academy of Hope transform its organizational structure and resource allocation to enable its scalable expansion by 2030?
101
Set
Ready
Go!
Well-positioned asset allocation
Sustainable financing
Legal approval
Balance of Interest
Favorable expansion target state
Scalable model
School Retention
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix
With a solid legal and scalable structure, Academy of Hope is now getting “ready” for the run
102
Set
Ready
Go!
Well-positioned asset allocation
Sustainable financing
Legal approval
Balance of Interest
Favorable expansion target state
Scalable model
School Retention
Executive Summary ➤ Industry Analysis ➤ Strategy Design ➤ Implementation ➤ Appendix