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my CIO: How are you going to help our company spend less to generate and collect as much or more revenue as we do now?
The answer I want to hear isn’t “give me three years, $50 million, and an army of personnel.” It’s likely to be something far more pragmatic like, “Well, after our mergers and launching new product silos, we have five different systems and processes we use to run credit card transactions. We only need one. It’ll cost us 80 percent less to run those cards if we spend no more than $1 million in the next 4 months on some process optimization and simple integration.” As CFO, I can sign off on collecting the same dollars for 20 percent of the cost without taking on too much risk or expense. And I don’t need the CIO to transform the entire IT operation to pull this off. I like it. It’s tangible. Let’s do that.
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“The challenge for us as a vendor,” Hanlon says, “is to find a solution that is low enough cost and risk to convince [CSPs] to migrate. But that decision also depends on what other projects the IT organization has going on at that time. There’s limited bandwidth to take on too many of those projects at once,” he says. Not only is there limited bandwidth, but executive wherewithal just isn’t likely to be there. CFOs, CEOs, and boards don’t want fancy architecture diagrams. A friend who is a lead business developer for a major software supplier said it best: “This economy is brutal.” The OSS/BSS sector needs to offer tangible solutions that improve how the business operates today. Do that first. Then we might be able to talk about the glorious future.
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Hanlon agrees, which makes Convergys’ point of view refreshing. “You’ve got to weigh activity against the cost benefit and risk on those consolidation projects,” he says. “I’ve seen examples where operators have a legacy billing platform for part of their business, but they can’t justify the cost of migrating off that platform. There is a desire and cost benefit to simplify, but the cost benefit is not perceived as big enough to justify the short term benefit and risk- the pain isn’t big enough to consolidate.”
Now, it’s arguable that Convergys has an agenda here. It’s primarily an outsourcer, not a systems integrator. It’s an incumbent biller facing new competition from major players entering its traditional cable and wireless markets. It’s a company that isn’t known in particular for inventing new technologies. Many of its prime competitors are in the transformation business. But none of that alters the merit of Hanlon’s words. Consolidation projects are risky, and they fail very often. They are massively difficult to manage, even for the best and most experienced program managers.
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So What About Convergence?
Undoubtedly, it is true that convergence has been thrust upon many CIOs. “CIOs are being forced to consolidate to justify mergers as well as to make these new offerings work,” says Hanlon. So this is kind of a lousy time to be a CIO. If I’m a CIO I’m thinking, “The Internet is undercutting me and raising customer’s expectations. I have competition coming from every direction. I have to devote a huge portion of my budget and staff to maintain systems that aren’t moving me forward. And my CFO and CEO don’t want to hear that I need more people, cash, and technology to do what the business owners want. Maybe I should have taken that early retirement package when I had the chance.”
Setting the defeatist, self-pity aside, however, there’s a pragmatic approach that’s worth considering. First, I’ll consider the CFO’s point of view. If I can collect revenue for less cost, that’s a winning proposition. That’s where
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