Zayo crowd–please do not read further.
Rest of telecom crowd. Please read on. Did you read “Allocated Cost is Bad?” Isn’t Sandi Mays naive? Cher Horowitz had more of a clue. Sandi should know better.
How can she possibly think it is efficient to have multiple NOCs? Can you imagine how de-optimized the network would be if a centralized engineering group isn’t responsible for technology decisions? The network is a factory; how could costs be assigned to business units in anything other than an arbitrary way? More than one provisioning system–are you kidding me? Distributed financial and legal–chaos is the only outcome? No IT Architecture; no CIO–can you even picture the spaghetti that the systems would become?
Correct you are, I say, for thinking this way. Centralize, centralize, centralize. Functionalize, functionalize, functionalize. Standardize, standarize, standarize. Prioritize, prioritize, prioritize. That’s the telecom way.
Zayo will take a different approach.
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Dan, I think you are on to something good with the way you have organized Zayo. I posted about it yesterday, and had a commenter who took issue with the de-integration approach. I responded in a post today, here: http://ikeelliott.typepad.com/telecosm/2008/06/more-on-cost-al.html
Ouch! That hurt.
Since you get way more readers than my blog, I thought I’d share a comment from Mark.
While I agree with a lot of your comments, many are remain unsubstantiated. For instance, “…we gain more in efficiency than we lose in cost.” How exactly do you measure efficiency? Cost is relatively easy to measure more precisely and accurately than efficiency. In the long run – key notion – duplicate services will result in less return on invested capital.
It isn’t that the sharing of resources is inherently evil; it’s more that the drivers for allocating the items that should be shared are incorrect. Why would one use revenue to allocate SD costs for colo? Pick a decent driver and business units interests will align.
Regardless, interesting post.
- Mark