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Forecasts for 1986: Another Concern for the Telecom Manager.

The divestiture of AT&T and the entrance of most major electronics producers into telecommunications have combined to bombard the telecommunications manager with an embarrassment of choices. Yet very often, the marketing efforts of manufacturers and service providers, offering an array of new features and technologies, have fallen on deaf ears. Experience with such devices as the complex, multi-featured PBX has shown the difficulty of changing actual communications practices within an organization in a way that will make effective use of a new technology.

The sprakling array of newly available features has precious-little impact on the actual behavior of most equipment users. The utopian promises of such technological dreams as the Integrated Services Digital Network (ISDN) is rightly viewed with some skepticism. Nevertheless, our most-recent market investigations have shown that it would be dangerous for telecom managers to ignore the implications of such future developments as ISDN in their current planning.

The international ISDN standard defines a uniform outlet for digitally based telecommunications. Most users, even in the corporate sector, are far from being able to make use of such a capability. According to our recent survey of PBX users, even though the majority of PBX line shipments now are digital and more than three-quarters of all lines installed by 1990 will be digital, the fact remains that 75 percent of current lines are analog. The survey also revealed that less than five percent of PBX line shipments were used for data and three-quarters of all PBXs in the survey were used for voice only. Combining such information with the fact that 90 percent of all telecommunications costs are for voice, it is easy to se why many dismiss the relevance of ISDN for current planning.

Given the nature of the technology and the organizational divisions of most corporations, the major responsibility of the telecommunications manager has been to procure resources in a cost-efficient manner in order to provide necessary voice communications for the corporation. A number of changes in the technical and commercial environment, however, have placed new demands on managers of corporate communications. First, the growing availability of high-capacity long-ditance digital transmission lines will continue to reduce the effect of transmission costs as a barrier to the use of business communications. Second, the ubiquity of personal computers is creating an installed base of potential communications terminals and a new class of sophisticated users of communications services. Finally, a number of developments in PBXs, local-area networks and public-network services have made it increasingly cost-effective to develop applications that will make use of integrated services involving voice, data and image.

Correlated with the technical changes are increasing competitive pressures in commercial operations that have added value to rapid and flexible transmission of information. In manufacturing, for example, incentives to reduce costs and deliver products to market rapidly have made close relationships with suppliers and distributors essential. Geographical proximity between vendor and manufacturer, while possible in japan, is less feasible in a worldwide manufacturing environment. Communications, employing voice, data and image, will be key to managing product development, manufacturing and distribution. In financial services, rapid communications is already changing strategies for new service offerings. Informational links with customers made possible by sophisticated use of telecommunications will increasingly become essential for expanding into new markets and retaining current customers.

The use of integrated services will be greatly enhanced by implementing the recently adopted international standards for the Integrated Services Digital Network. The standardization of the PC around the Intel 8086 series of microprocessors and the MS-DOS operating system created an explosion in applications for personal computers. Similarly, the existence of a standardized ISDN port for voice, data and image may create a rapid expansion of communications applications by guaranteeing the value of investments in hardware, software, applictions and procedures training.

While ISDN has been touted as a means to give everyone access to enhanced voice communications, high-speed data transmission, instantaneous facsimile, and maybe even picture-perfect images of your competitor's desk, our research indicates that the corporate community will move toward ISDN for four principal reasons of immediate and tangible value.

First, the cost of current telecom services may be significantly reduced. In environments that make use of separate access to lines of differing bandwidth for various communications services, ISDN will permit more-efficient allocation of transmission resources and faster response to changing local demands.

Second, numerous isolated data communications networks, on which many corporations depends, will be able to be integrated for the first time. Many corporations have created communications networks by a random-walk responsed to local requirements. ISDN will make it cost-effective to integrate not only the networks, but the business operations that depend on such links. For example, in some corporations it is difficult to link information deriving from the sales organization to requirements for factory operation. The organizations have separate informational hardware and functional protocols. ISDN may foster the need to organize corporate operations around compatible information flows.

Third, standardization of interfaces between the network and the user will act to guarantee current and future investment, providing a smooth path for upgrading corporate telecommunications on a system-wide basis. Such uniformity will also eliminate proprietary ties to specific vendors, putting cost pressure on equipment providers.

Finally, ISDN will make it possible to create a new environment for standardization of telecommunications procedures and rapid development of new applications. This results from the combination of the standardized telecom port and the ability of the user to program the network in support of a particular business function. If ISDN follows its logical course, the availability of software supporting the development of corporate-wide telecommuncations procedures and applications will stabilize the process of developing new telecom applications. A standardized environment for implementing new applications may help minimize the large costs associated with training and disruption of current business practices.

The bottom line is that ISDN will radically reduce the cost and the response time associated with developing new products and services in businesses that can potentially take advantage of telecommunications. Since the speed of product introduction relative to competitors often makes the difference between profitability and minimizing one's losses, corporations that can capitalize on the flexibility of the ISDN technology will have a considerable competitive asset. Making use of the new capabilities will require some investment in hardware. The more-difficult part of the process, however, will be adapting the business practices of the corporations to take advantage of the new technologies. Only a few corporations have begun to systematically analyze the strategic implications of user controllability of telecommunications services.

Ultimately, every major corporation will be affected by the ISDN technologies. Taking advantage of the ISDN capabilities will require considerable foresight and planning on the part of the telecom manager and the corporation. The challenge now is how to minimize the cost of the transition to the ISDN environment. For instance, the use of digital technology is now creating new product and service choices that demand a more-integrated organization. Technological evolution is forcing more DP/telecom cooperation, if not outright consolidation. The explosion of new products and their inclusion in user organizations is forcing a reversal of the trend toward decentralized budget authority for the acquisition of word processing equipment, PCs and CAD/CAM. Seventy percent of telecom managers surveyed by VDC reported a return to centralized purchase authority and two-thirds reported that telecom and datacomm management had been or were in the process of being integrated.

Such organizational changes, however, are only a preliminary step in transforming telecommunications from a cost-of-doing-business to a central element in strategies for growth of the corporation's core businesses. The telecom manager must act to not only plan the evolution of the network, but also to move the corporation in directions that can profit from the rapid pace of applications development made possible by the new communications environment.
COPYRIGHT 1986 Nelson Publishing
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Copyright 1986 Gale, Cengage Learning. All rights reserved.

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Author:Wasserman, Neil; Garrett, Bill
Publication:Communications News
Date:Jan 1, 1986
Words:1297
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