Optimisation is flawed thinking

The scale of this week’s announcement of AsiaInfo’s first deal in Europe brought back memories of Ireland. Not the soft green hills, but Dublin and specifically Peter Cochrane’s talk at the recent, excellent Subex User Conference.

In his presentation he talked about optimization. And scared us half to death. Humans, said Doctor Cochrane, are the only creatures that optimize. Generally nature settles for what works and fits in with the overall scheme of things, adapting but not optimizing. Optimisation is a short lived solution and one that is taught in business school, not life school.

Sometimes, he went on, you must take risks and replace things. Like the 100 or so systems that Telenor is asking AsiaInfo to replace in order to simplify the customer experience. It is entirely possible that the good folk at Telenor have been talking to the Doctor.

His thesis continued with the statement that putting fibre in to every home in the UK is a cheaper option than ‘optimising’ the existing copper network and the existing switches. The project could probably be funded by the sale of the real estate on which the seven and a half thousand switches sit. It could certainly be funded by the reduction in maintenance costs of all those good old fashioned exchanges. He would know, he was CTO of BT for a long time.

He proved his point in Jersey – the UK one – where he found a huge transformation in thinking going on, together with a bunch of people being ‘optimised’ out of the business. He sold the telco there the idea of putting fibre to the home, a cable head-end on each connection and an open 3G box in every home. Whichever operator customers were contracted to, there was 3G connectivity in every house.

Clever? Bold? Cost effective? – Yes, it worked.

In telecoms, we are at a point where decisions are beginning to be made on a forward-looking basis, not on a cost justification basis. For instance, not providing real-time self service is costing operators in Europe almost €5 billion a year in ungathered revenue.

In Scotland alone, the cost of not being able to get broadband in, well, anywhere except towns is costing the economy about £130 million a year in lost opportunities. This point became a political issue when a Government meeting took place in a small town on the West Coast – presumably to show that politics in Scotland is not a nasty centralised affair – and there was absolutely no coverage. There will be soon.

Of course, quantifying the opportunities is not easy but maybe examples like that of Telenor or Jersey or even the experiment that is paying off so well for Telefonica Digital in Direct Operator Billing will pave the way for others to follow suit and only ‘optimise’ to a certain point.

And then rip it out and start again, ready to support the ‘Now’ generation.

Peter Cochrane’s other thesis was that the internet simply will not scale to support the 9 billion people and 50 billion machines that will be needing it. Happily, the cloud will.

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About Alex Leslie 400 Articles
Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet.

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