November 29, 2002—Uncertainty for telephone service providers looks set to continue for some time, with one fifth of customers saying they expect to change contractor within the next year, according to a recent UK survey.
In the survey, 20% of managers questioned said they would be looking for a new provider in 2003 due primarily to fears over service continuity. Some industry observers, including the research group Gartner, are urging companies to move towards flexible sourcing strategies in order to insulate themselves from the traumas of switching suppliers at short notice – one of the most troublesome operations an organisation can undertake, according to Allen Timpany, CEO of survey sponsor Vanco.
“This level of uncertainty is unprecedented,” Timpany notes. “That so many organizations are facing up to the costs and upheaval of switching suppliers owing to service continuity fears underlines the market’s lack of confidence in the ability of carriers to continue to serve their customers. It’s clear that the carriers are not yet out of the woods and that the present disruption is going to continue at least through next year.”
The collapse of WorldCom, Global Crossing and KPN Quest and the recent massive losses disclosed by Cable and Wireless indicate, Timpany says, that there are no safe harbours among the world’s telecommunications infrastructure providers. “The only recourse left,” he argues, “is to spread the risk by adopting a flexible sourcing strategy.” This leaves companies with a choice—either contracting direct with multiple service providers or working with a managed services provider. “Either way,” Timpany concludes, “putting your business networks into the hands of a single infrastructure provider is now not a risk worth taking.”
—Elliott Chase
Reprinted with permission; copyright 2002 i-FM
