Forecasting the future for telecoms - Financial Perspectives - Global

We witness the crash and burn of telecoms companies daily who didn't forsee the impact of current market forces. The ability to predict and avoid disaster would have been a life-saver, but is this ever possible when unpredictability lies at the heart of the telecoms market? Like tarot cards and palm readers, should forecasting solutions be taken with a pinch of salt or can they provide operators with real insight and market advantage?

"Telcos can turn information from their business forecasting software [systems which manage company performance (financial/sales targets) in real-time and predict future needs and results] into a real competitive advantage by building best practice performance," says Mark Stimpson, VP international product marketing, Adaytum, a business planning solutions company. "On top of saving time and cost there is the overall goal of achieving greater shareholder value."

He argues that in today's market downturn, telcos need to be able to explore the consequence of various possible decisions and scenarios, and be able to plan for whatever comes their way. But what are the vital factors to look for in the forecasting business model?

Adaytum's Stimpson describes various fundamental capabilities including easy integration with existing IT systems and functionality. He believes deployabilily is important -- how easy is it to provide access to the software package to all the people that need to use it? "Web-based planning software has a big part to play because it is easy to deploy and anyone that has access to a browser can get onto it," he says.

Quality of performance and speed of response are other key factors. As Stimpson notes, "If people have to wait ages for numbers to be re-calculated and data to be consolidated it is not really a useful tool."

The total cost of ownership is a consideration too. The upfront licence fee for Adaytum's business planning package, e-Planning, for example, costs [pounds sterling]75,000 ([euro]119,700) at entry-level with an annual [pounds sterling]15,000 ([euro]23,950) maintenance fee. At the end of the day are such systems worth the money or can operators survive without them?

Adaytum's Stimpson argues, "Today's forecasting systems are better than traditional IT systems because they have the ability to take on the complexities of more detailed scenarios," he claims. "In addition, a planning system is more flexible with the capacity to meet strict deadlines and cope with bursty peaks in demand."

COPYRIGHT 2001 Horizon House Publications, Inc.
COPYRIGHT 2002 Gale Group