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Forget Harvard Business: All You Need Is to Simplify Your Telecom Business

By Peter Yelle Comments
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Peter YelleHow many of the dozens of CLEC and wireless telecoms born during the dotcom bubble are still in business today? Very few, actually. Some of those operators were lucky enough to merge or get sold, but the vast majority either went bankrupt or quietly folded their tents.

And what was the cause of these many business failures? Well, you could point to many causes: regulatory change, network overinvestment, competition, lack of capital, and overconfidence, to name a few. But in many cases, these “causes" mask one over-arching cause … the inability of managers to make informed decisions in a fast-changing business climate.

Executives got mired in the detail. And the detail they needed was not always easy to get, find or compile. Their telecom businesses were launched with a particular business model in mind, but when the competitive and regulatory climate shifted, they failed to see and react to those changes fast enough.

Many lacked clear financial intelligence to tell them what the current state of their businesses really was. They were forced to rely on gut checks instead of real numbers. Not having accurate, timely operating data, considerable time was spent trying to find the answer, when they did not have the question right to start with. Eventually, they couldn’t tell the forest from the trees.

In short, many of the dotcom era failures can be attributed to over-complexity. Key managers lacked an ability to simplify their businesses to the point where they could sift through the operational and financial complexities to make good decisions.

Allowing the Necessary to Speak Above the Crowd

What does it mean, then, to “simplify" a business? Well, I think this definition sums it up rather well:

“To simplify means to eliminate the unnecessary so that the necessary may speak."
—Anonymous

If the “necessary" facts of a telecom business could speak for themselves, they would probably talk about four assurance initiatives around which the entire enterprise hinges:

  • Service Assurance: Did I deliver what the customer ordered to the quality of service he was expecting?
  • Cost Assurance: Am I incurring the correct expense to deliver this service?
  • Revenue Assurance: Am I billing out correctly for what I delivered?
  • Margin Assurance: Am I accurately reconciling the cost against the revenue – am I profitable? It doesn’t get much simpler than that. And I think you will agree: Getting answers to those four questions – across each and every product line – would arm a telecom exec with some pretty powerful intelligence to make key decisions.

Going to Harvard Business School will instill in you the discipline to seek out data, analyze this data, and make decisions on it. But if the Harvard grad does not have accurate data to work with, his business insight will lose its value. A roll of the dice may be just as informed. To succeed in telecom today is a matter of getting answers to the necessary assurance questions – and then taking appropriate action. It’s about eliminating costly, ineffective, and time-consuming procedures, suppliers and services, then replacing them with streamlined ones that produce a profit.

Every telecom service provider starts with a service it needs to sell. That sale is then followed by service delivery, billing, and then reconciling the revenue against the incurred cost. To be profitable, each step of this basic flow needs to meet a specific cost target. And the sum of those costs must be lower than the market price driven by the customer’s perceived value of that service.

In fact, if you can deliver a superior service quicker, for less cost, or at a higher margin than your competitors, then market opportunities open up for you. That’s what the telecom business is all about. This is by no means a one-time analytics exercise. Rather it’s a continuous, month-to-month process of examining revenues, costs, and profits and refining what you sell, how you sell it, and whom you sell it to.

Obtaining the Necessary Facts to Run Your Business

If the dotcom era executives had timely access to the necessary and accurate facts behind their business performance, who knows? Maybe many of those firms would still be in business.

Well, what if I told you that the simplicity of some of the best telecom minds was crystallized in an affordable financial intelligence solution that delivered those necessary facts? And what if you could get that solution and not have to buy any hardware or negotiate any software licenses? And what if that solution was entirely self-run – it needed no handholding from IT to install it, run it, or maintain it?

 Well, you’d be talking about the kind of SaaS-based financial intelligence solution that Contact Telecom has been selling to it to clients for years, since 1998. The purpose of such a solution is to simplify complex back office business processes. It does that by delivering intuitive and accurate reports on the true cost/margin performance of each and every product in your inventory.

In Contact Telecom’s case, we believe that simplicity is derived from our Billing Data Analyzer application’s automated data retrieval, management, validation, and distribution. Optimizing the interaction between auditors, finance, and product managers, the solution reconciles multiple data sources so every manager gets fast feedback on the effectiveness and productivity of your business.

A SaaS solution like this enables you to be the expert in your business and apply your knowledge to your own business processes and cost drivers. This is truly the way to deliver simplicity – streamlining, automating and bring the necessary facts to the forefront so you achieve business building results.

Peter Yelle is a partner at Contact Telecom LLC. With more than 20 years of professional engineering and product management experience in the telecom and wireless industries, he has been instrumental in bringing effective telecom solutions to market.  Yelle holds a Bachelor of Science in Electrical Engineering from Northeastern University in Boston.

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