It’s Not Just Technology

Posted: 06/1999

The Letter

It’s Not Just Technology

Khali HendersonOf
MCI WorldCom Inc.’s total cost to deliver one minute of voice service, only 6 percent is
transport and switching; nearly twice that (11 percent) is attributable to billing and
operations support systems (OSSs). This revelation, made by Vice Chairman and Chief
Operating Officer John Sidgmore, speaking before a group representing 75 percent of the
world’s global telecom revenues at Andersen Consulting’s Global Communications Forum, was
made to illustrate one point: Technology is not carriers’ competitive battlefield.

"The real issue is SG&A (sales, general and administrative)," Sidgmore
says. "That’s where the battle will be won and lost over the next several years. Not
over technology, because we’ll all have the same technologies. It will be the efficiencies
that will make the difference."

While their emphasis might be slightly different, other carrier executives agree. Take
Joe Nacchio, chairman and CEO of Qwest Communications International Inc., Denver. Speaking
at the same forum, Nacchio says, "Ironically, what we find at the top of the digital
value chain is not technology, but relationships."

In his view, successful communications services providers will be the ones that can
help their customers "see around the corner." He challenges his peers to
"empower customers to use your assets, not simply talk to them about using your

Qwest has developed partnerships, such as the one with Redmond, Wash.-based Microsoft
Corp., which will help the company to bring its customers the applications they need to
take advantage of new technologies with the ultimate aim of improving their business

While technology is a necessary focus, these industry leaders and this magazine have
chosen to emphasize the constants–sales, customer service, operations–rather than the
variables. In five years, it is uncertain where technology will be. Indeed, few could have
predicted the industry-altering impact of packet-switched networks, dense wave-division
multiplexing (DWDM) and terabit routing technologies.

Once best-of-breed technologies are adopted and deployed, it will be those companies
that can develop efficient and personalized processes for back-office and customer care
that will be the winners.

Khali Henderson


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