The goals of
the communications providers’ CTO and CFO are driving further apart. Both are
committed to do what’s best for long-term business prosperity, but their
strategies are far from converged.
In this face-paced sector communications operators have to innovate, to offer the latest services and packages to customers, in order to stay competitive. The CTO is under constant pressure from the business to ensure that the systems are in place for dynamic packages to be marketed, fulfilled, and billed. With many BSS systems dated, this requires investment to upgrade to next generation support systems.
In contrast, the CFO focuses on ensuring profitability and demands in fiscal year returns for any large investments made. The CFO role is to demonstrate to owners, shareholders, or the market, that the business is doing well. In simple terms, growing and making more money than it is spending.
Yet some CFOs are acknowledging this strategic problem. Industry news title, Global Telecoms Business published in an article that interviewed top global telecommunications CFOs in February 2014. Tom Fitzpatrick, CFO of satellite operator Iridium, was quoted saying: “The short-term earnings bias of Wall Street in the evaluation of results proves difficult in that many compelling long-term initiatives are not undertaken in the face of this short-term bias.”.
In this face-paced sector communications operators have to innovate, to offer the latest services and packages to customers, in order to stay competitive. The CTO is under constant pressure from the business to ensure that the systems are in place for dynamic packages to be marketed, fulfilled, and billed. With many BSS systems dated, this requires investment to upgrade to next generation support systems.
In contrast, the CFO focuses on ensuring profitability and demands in fiscal year returns for any large investments made. The CFO role is to demonstrate to owners, shareholders, or the market, that the business is doing well. In simple terms, growing and making more money than it is spending.
Yet some CFOs are acknowledging this strategic problem. Industry news title, Global Telecoms Business published in an article that interviewed top global telecommunications CFOs in February 2014. Tom Fitzpatrick, CFO of satellite operator Iridium, was quoted saying: “The short-term earnings bias of Wall Street in the evaluation of results proves difficult in that many compelling long-term initiatives are not undertaken in the face of this short-term bias.”.
Many BSS out-of-date
The issue is that many BSS systems in place are so dated that they are unable to cope with next generation technologies and services. Quick fixes will not last for long and will not be able to keep up with the fast pace of change. In the long run, this will cost the operator more money than upfront investment in a long-term solution.
To stay
competitive, it is crucial for the CTO and CFO strategies to be converged.
Alignment must be made to support the business with advanced IT, creating
long-term efficiency and cost-savings.
To read more
about operator convergent strategy, read CoralTree’s latest Insight report:
“Convergent strategy or conflicting goals?” by visiting our website: www.coraltreesystems.com/insights-papers
This blog
was written by Natasha Geldard, Head of Marketing, CoralTree
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