Networking

Short-termism and stupidity - the blight of tech investments

Business decisions based on upfront costs alone invariably turn out to be expensive mistakes. Yet too many tech decisions remain based on an unhappy combination of ignorance and knee-jerk reactions.

Despite advanced modelling techniques, planning in areas such as fibre-optics remains Dickensian. Photo: Shutterstock

Written in London and despatched to TechRepublic at 31Mbps over free wi-fi from a coffee shop on London's Pall Mall.

I have just been listening to the CFO of a European telecoms provider complaining that his organisation's optical fibre rollout is going to cost a bundle in increased energy bills. He had been expecting overall electricity consumption to fall.

Over a coffee I ascertained that this provider has a fibre-to-the-cabinet (FTTC) programme and has retained the old copper network topology with exactly the same number of telephone switch sites.

As I explained the full capabilities of optical fibre and what fibre-to-the-home (FTTH) actually means, the colour drained from his face at the realisation that his company had missed a huge opportunity to reduce the equipment and building catalogue instead of drastically increasing it.

It was clear that flawed network plans and poor economic thinking were about to cost him even more over many years.

In brief I gave him the formula for success on a table napkin:

  • Close down the PSTN and replace it with VoIP.
  • Dismantle all MPLS networks and replace with IP over Ethernet.
  • Dispense with 90 per cent of all telecoms property by exploiting fibre reach.
  • Reduce manpower by 70 per cent and man-in-van crews by 90 per cent.
  • Introduce new and novel alliances and service offerings.

On paper his projected power bill would then drop to less than 10 per cent of what it used to be with the old copper technology, and a much smaller fraction of what their current rollout would demand.

So what had gone wrong with his organisation's thinking? The only interpretation was that its plans were based on a fundamental lack of understanding,  and spoke volumes about its planning, modelling and purchasing processes.

Over the past 40 years the planet seems to have become economically dumber as technologically-induced change has accelerated. Knowledge, thinking and comprehensive modelling have now been replaced by knee-jerk reactions, fast-paced deal making, and upfront costing compounded by short-termism.

Designing and running a networks business is not rocket science, but it does involve a good deal of sophisticated modelling and consideration. Thinking and planning for the long term is vital. Short-term thinking is the kiss of a lingering death.

Unfortunately this CFO is going to experience one bad news story after another. Soon, the shortcomings of FTTC will necessitate its replacement and the bandwidth demands of today will look as silly as those 9,600bps dial-up modems of only 25 years ago.

A modest dimensioning of this type of network business requires at least a consideration of:

  • Today's network and customer demands.
  • Rate of growth.
  • Future requirements.
  • The competitive landscape.
  • Likely stage-left influences and effects.
  • New services and applications to come.
  • Quality of service - which includes reliability, resilience, performance, and utility.
  • Return on investment .
  • Capital expenditure.
  • Operational expenditure.
  • Installation.
  • Repair and maintenance.
  • Staffing.
  • Fleet management and scale.
  • Real estate.
  • Terminating old and outdated services.
  • Retiring old or outmoded equipment.
  • Spares holdings.
  • Software support and migration.
  • Reducing old liabilities.
  • Achieving green targets.
  • The changing face of technology.
  • New and novel markets.
  • Network and business support.
  • Energy and materials budgets.
  • The green agenda.

Despite our advanced computing and modern modelling capabilities giving us an ability to cope with so many fast-changing dimensions, companies seem to continue planning and investing on the basis of Dickensian thinking and methods.

So, I can guarantee that I am weeks - or perhaps days - away from another CFO or banker telling me we don't need optical fibre because it can all be done on power lines and LTE-G4 wireless. And as ever I will try and let him or her down gently with the bad news: it ain't going to work in the short term let alone in the future.

And in readiness for even worse to come, I can tell them that THz waves, infrared, software-defined radios mesh nets, ultra-wideband et al are not going to cut the mustard either.

But I can still guarantee that ill-informed investments will still go ahead driven by soda-straw vision and potential short-term gains.

About

Peter Cochrane is an engineer, scientist, entrepreneur, futurist and consultant. He is the former CTO and head of research at BT, with a career in telecoms and IT spanning more than 40 years.

10 comments
peter
peter

Only the USA and Australia? Countries with natural resources to dig up and drill for should have it made compared to the many who have to get by on skills alone...

peter
peter

A lack of communication, process, rigor, and professionalism will always create mayhem!

Deadly Ernest
Deadly Ernest

The real root cause of these blunders is a marketing person gets access to non tech C level people and sells them on the advantages of a great plan that has no connection to the realities of the business a it is. The C levels don't realise this as they don't have the tech knowledge needed to notice it and they get blinded by the buzzwords, the BS, and the projected savings. Then they shove the project down the throat of the IT staff without listening to what they have to say about. When the problems come home to roost on the bottom line the C levels usually blame the IT staff for sabotaging what was never going to work. BTW all the technical areas get this sort of stuffed up project at some time as well. The only answer is for the C levels to tell all marketing shills to take a hike until AFTER they get the company tech staff onside. The marketing people get paid a commission on a contract signature now, not on a working sign off by a happy client, so they have no interest in seeing if the sale works or not. A few decades ago the sales staff didn't get their commission until AFTER the project was up and runnign properly, boy did they work hard to see they gone done right in those days.

melbert09
melbert09

Its not just services or vendors, but the rush to impliment a system. Im now having to migrate an ERP system out of an office network so they can pass PCI compliancy. The project and system were rushed into service with out thinking about any operational, compliancy or security thoughts. Just get it in and get it going and give everybody access :)

OurITLady
OurITLady

that make bad decisions. I've seen a few tech departments decide to replace systems that "don't work" with other systems that also end up not working. There isn't any analysis to figure out the reason it doesn't perform is the fact that it's installed with a basic config and then left sitting there for years, no-one maintains it, the chances are the original tech has left, and rather than train someone to get the expertise to tweak the system to get it working properly they just dump it and repeat with the same process with the next new thing.

jonrosen
jonrosen

This is what happens when you let the frequently tech-ignorant CFO make your build-out plan for a tech growth. It is done 99% incorrectly. And I'll give good odds in Vegas that any CTO, and any IT managers who tried to speak up saying 'that's not doing it right' were likely shut down by being told do it or you're fired. Yes, IT expenditures do need to go through the Finance side of a business, but FAR too many companies let the Finance group CONTROL the IT group, which is just stupid.

peter
peter

Gee whiz - been there - done that - painful - best of luck!

peter
peter

Are we watching a general decline in professionalism, education and expertise..invoked by the need to get more bums on seats rather than brains fit for purpose?

peter
peter

The same seems to have happened to other professions and departments - medicine for example - I reckon the bean counters have got so bored counting that they have drifted into managing everything on the planet. The least educated with the most power seem to be the new norm!