NEWS
CIOs must get themselves onto the board - or consign their companies to shabby telecoms service for ever, Easynet's CEO has said.
David Rowe, boss of the ISP recently acquired by BSkyB, said the rash of new entrants into the market and the controversy that surrounded them, has left enterprises somewhat jaded with suppliers.
He said: "I hesitate to say it but sometimes people get what they deserve. They listen to the cheapest vendor and assume that everything will work just fine because it's telecoms. It's like people who go to a garage and say 'sell me a car. I want the cheapest one. No, cheaper. Cheaper still'. And then they're surprised when it all falls apart."
And the root of the problem? According to Rowe: "It happens because IT directors still aren't on boards."
Research agrees. According to the National Computing Centre, nearly four out of five companies have someone on the board looking after IT. However, the number of 'pure' IT directors - who only have responsibility for tech - has fallen over the last five years from 27 per cent to 21 per cent, while on 58 per cent of boards IT is represented by a "director of IT and other areas". A 2005 report found that just one in 14 big companies has put their CIO on the board.
Buyers' naivety is not entirely at fault, said Rowe, adding some new telecoms players have also messed up. Carphone Warehouse's entrance into broadband, for instance, was "spectacularly poorly thought through - it's a case of people thinking it's not hard to do telecoms".
Easynet's new owner BSkyB which bought the ISP for £211m, is also trying its hand at consumer broadband.
Easynet's new overlords have apparently given the ISP a boost. Rowe told silicon.com: "We'd reached a glass ceiling. Our finances weren't strong enough. We have the credibility now to bid for larger companies and the size of companies in the pipeline is much bigger."
Rowe added that the relationship with Sky has not all been plain-sailing, though the broadcaster has thrown its weight behind the enterprise vendor. "The next three to five years we're going to grow the business and see where it's going. Who knows where it will go? Three to five years is a lifetime times two in this industry."
VoIP is definitely on the horizon for the company - being part of a quad-play company is not, Rowe said - because there's not enough crossover between buying service. Choosing a broadband supplier is a family decision while with mobile it's a personal one. Nevertheless, the UK saw the launch of its first quad-play service yesterday, as Virgin Mobile, NTL and Telewest officially relaunched under the brand-name Virgin Media.
BSkyB CEO James Murdoch recently described quad-play as an "uncomfortable marriage", adding: "Our existing partnerships with network operators work very well for us... we are not interested in being a mobile network operator."
Comments
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1. Roger Huffadine
If the person making the Telecom decisions can't explain Erlang's Probability Theorem then fire them and get someone who knows telecoms. You can save money if you cut the Quality of Service and if you can't do the Erlang stuff in your head then you have no concept of service and value.
2. Simon
My experience is that IT is usually part of the Finance Directors job - presumably because the most key part of IT is keeping track of the beans. My last FD was a bean counter through and through - knows every last bean the comany has, but can't see the value in anything !
As a coalface IT worker (and network manager and telecoms manager and ...) I was always being told to plan ahead. But what happens we we do ? I forsee a requirement, plan a network upgrade to cope, take my proposal to the beancounter who simply responds that we don't need it, he won't pay for it, and he'll reconsider when it's needed (ie when the network grinds to a halt and HE can't get his work done).
This is one of the problems holding back progress, and it affects telecoms just as badly - when a director sees the headline rates and 'suggests' that we should use that carrier. Never mind that we've used them before and they let us down BADLY - the beancounters say jump, so who are we to argue.
3. Vic Davies
The issue is that many senior board directors have never been educated in or had experience of ICT as a strategic change device. They simply it see via the prism of old style management techniques and organisational structures. Having delayered staff in 1990s they simply see IT as a cost reducer. This is why companies like BT and IBM have had to move more into consultancy services. BUt perhaps the answer is get more unis and business schools to produce managers where IT is an integrated part of a course and not a stand alone module.
4. Simon Allen
Simon from Cumbria says it all.
Firstly: Big companies are NOT going to put CIOs on the board. They tried it in the 80s and stopped in the early 90s. When I was doing a contract for an extremely well known high street electrical and PC retailer in the mid-90s, our director of IT was demoted. He used to report direct to the CEO but then made to report to the Finance Director. This demoted and demotivated 100% of the IT staff.
Secondly: Since CEOs and CFOs can buy a wireless router at Tesco - how hard can it be?
Lastly: I agree that Erlang is the foundation of all understanding BUT Voice Comms as a separate discipline is dead and buried.