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Divestiture Requires That All Perform on a Higher Level.

There has been so much written about "the divestiture" that one more article runs the risk of becoming a bird-cage liner. However, from the vantage point of a former insider at one of the the new regional Bell companies (RBOCs), perhaps we can offer some fresh perspective on whether to embrace it or evacuate.

Look at the ripple effect in the marketplace. Manufacturers have signed supply contracts running into the hundreds of millions of dollars. Many interconnect companies have run for cover, slashed prices or lost key people to pirating by the RBOCs. Some regulated companies are touting Centrex-type services as the "simple" solution.

Manufacturers are asking how to get a piece of the RBOC action and still keep distributors happy. Competitors wonder how these new megabuck interconnect companies will eat into their market share and profits by "buying" early deals. The RBOCs themselves are in a new world and have hundreds of questions, not the least of which is "What is our business?"

In a recent Denver Post article, Paul Lee, president of U S West's Inerline Communications Services subsidiary, lamented the lack of one-stop shopping while in Los Angeles to announce a nationwide servicing, installation and consulting business that he hopes will help fill the one-stop gap.

Finally, there are the users' questions. What system? Which vendor? Why now?

Comparing the confusion and frustration of "one-one-eighty-four" with the prevailing attitudes surrounding the 1968 Carterfone decision is like comparing the starhip Enterprise to Wilbur and Orville's first flight.

The bottom line that is common to all is that we must be better. Manufacturers must give better support. Sellers (interconnects, telcos, RBOCs) must fine-tune their skills and concentrate on meeting needs, not just moving products. RBOCs must define their role(s) and earn, not assume, customer loyalty. More Than Placing Orders

Buyers must improve, too. They need to become knowledgeable about not only alternatives in hardware and services, but they must learn to aggressively manage, not passively "place orders" for their communications needs.

Divestiture certainly has created confusion and even fear. But it has also created tremendous opportunities for those willing to recognize the changing environment, roll up their sleeves and invest their sweat equity to capture market share. But what does that mean to the business consumer?

In the area of hardware selection, the supermarket is ready and there are some grand-opening specials. RBOCs have something to prove, interconnects have something to protect and you have something to gain. But beware of just good salesmanship. Following is a list of criteria to consider when pursuing a new system. The priorities may vary among companies or even between two locations of the same company, but the issues are universal.

* Need versus want. Will the new system really improve productivity or lower costs, or is it the "in" thing?

* Product technology and life cycle. What "generation" is it? Where is it in its life-expectancy line? The trend is toward much shorter life cycles.

* Vendor Credentials. How many similar systems have they installed? What does their financial backing look like? Where would they be if the manufacturers they represented decided to pull their franchise?

* Manufacturer support. What will the manufacturer do to raise your "comfort level"?

* Contractural guarantees. Are there any teeth? What is specified as damagess for non-performance? Be very explicit!

* Warranty and repair response time. How long will you be out of service before somebody shows up to help you? Remember, having a technician one-site is no iron-clad guarantee the problem will be fixed quickly. Also ask for an extended warranty. Some vendors offer it only if asked. (Get your system price first so you'll know it's truly an extra they're throwing in.)

* Features. Do your own needs analysis and buy only the features that will accomplish your goals. Don't buy 11 management reports if your company doesn't allocate costs.

* Price. This is important only after you have addressed all the others. Don't be afraid to shop around. Vendors know it's a competitive world. Be a tough negotiator. Ask for an odd-on price list that's good for a year. Be creative.

How does one really pull it all together? How do you get started on the quest for a new system? Yellow Pages? Business associates? Delegate? What if you're the delegatee?

When you build a building, you hire an architect. If a new surgical procedure is prescribed, you get a second opinion. But not everybody needs a consultant. Some system needs are very simple and purchase price dictates direction. But if that doesn't describe you, there's a whole field of companies and individuals to advise you through the maze. Agains, as with product selection, make sure your consulting choice has the credentials.

A few suggestions:

* Define the scope of the engagement; specify performance components. If all you want is a feasibility study or needs analysis, don't contract for a four-step process that includes selection and implementation phases. This protects you as well as the consultant.

* Discuss optional fee structures, such as fixed rate (consultant bears risk), fixed fee plus costs (shared risk) or daily rate (client bears risk).

* Don't ask the fox to guard the chickens. Make sure your consultants has no interest whatsoever in a potential supplier of services. You're supposed to be hiring objectivity.

* Require periodic reports. You have every right to know what progress is being made. Specify your expectations up front. Legitimate consultants will have no problem with this; however, it may add to your total cost.

* Look for and expect experience in the type of project you're considering.

Don't be afraid of not knowing today. Be afraid of not knowing a year from today. Dig in. Read. Attend trade shows and seminars. Then you'll become the one (company or individual) to whom others come for understanding.
COPYRIGHT 1984 Nelson Publishing
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1984 Gale, Cengage Learning. All rights reserved.

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Author:Thornton, M.
Publication:Communications News
Date:May 1, 1984
Words:961
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