The main reason for mergers and acquisitions or competing companies in the telecommunications industry is to incur cost savings. One source of such savings comes from the network integration of assets and network costs of both companies. This is a plethora of options to eliminate unwanted network costs, but corporate consumers are often more confident in their maintenance of expected interactions. As a result, they often failed to achieve their initial goal of saving. This document explains why many of these partnerships have failed to achieve their financial goals and what you can do to improve them.
There are many ways to identify network savings. Although there is no set rule for identifying network cooperation, the most common way to collect top networking savings is by using types or geographies after eliminating unnecessary savings.
Unfortunately, this popular process of identifying network interoperability has failed to address key issues. There are five additional ideas before investing to find a company.
Consideration 1: Integration of Multiple Operating Projects – Some efficiency projects aim to eliminate various components of network costs in the same area. More attention is needed when working with multiple projects. While these projects can cover a wide range of network costs, they often depend on other factors. The network planner often fails to understand this important relationship between projects and his or her lack of understanding can lead to estimates that are less than the project timeline while over-estimating project savings.
For example, an editor initially finds two projects in one place. The first opportunity to eliminate rental access costs by adjusting them to the seller’s municipal rings. Another opportunity is to compile the component where the local traffic is compiled. The planner would like to assemble the assembly area first, but the buyer will need to find an additional place to install the vendor’s equipment and receive a higher penalty for finishing the seller’s joint space in the first year of assembly.
As a result, the editor is waiting to start the integration process. Since the terms of the rented circuit are outdated and are charged monthly, the organizer would like to start the grooming program in the municipal ring as soon as possible. The main problem is that the planner has to establish a link between the two collocation sites to move these circuits back to the consumer’s backbone network as it is not possible to repair these circuits in the vendor’s backbone due to its current transport route.
With these additional costs of establishing communication between buyer and seller, the updated savings have now been significantly reduced. Another option is to rename these circuits until the space consolidation project is possible, but this decision will result in lower cost savings.
It is an appropriate task to evaluate the relationship between different parts of the network and how each project can affect it rather than viewing each project as a separate entity. We need to ask questions like “Does it make sense to start project ‘A’ first, and then project ‘B’?” “If the sequence of projects is changed, how can other work be affected?” “Does it make sense to upgrade a rented circuit or use a short-term solution while waiting for another project to be launched?”
The planner should carefully plan the time to save the collaboration, as some projects may need to wait until the previous project is completed. The editor may view the temporary repair as a renewal of the leased circuit while waiting to start other dependent projects.
Consider 2: Network Evolution – There are short- and long-term network integration strategies. Trying to maximize short-term savings can create barriers to using long-term network solutions. The planner has to strike a balance between short-term and long-term network decisions to find the integration strategy that leads to the best Net Present Value (NPV). Unfortunately, the editor is given the task of saving money quickly, the decisions he makes will not lead to a complete NPV over a limited period of time.
For example, there is a fixed fee for consolidating networks in the first year of consolidation. When no funding is available, the organizer decides to establish rental network domains to integrate both corporate circuits instead of building a network to eliminate leased circuits. The planner is not sure if the proceeds will be available next year to build the network; therefore, he decides to establish leased domains with a five-year commitment. Because the settlement payments for the termination of the leased facilities will be higher and the costs of the renovation will be higher, the constructive network will not be allowed in the second year of consolidation as indicated by the NPV below. The decision for the first year to establish leased domains forced the joint venture to start a better project in the second year.
Consideration 3: Network Implementation and Measurement – Most people have a basic expectation. It is no different in estimating compound savings. Actual results show lower than expected savings and longer than expected project time. Other issues that can alleviate hope are:
1) Network integration may require dealing with various processes, cultures and programs. These problems lead to network fragmentation leading to higher network integration costs.
2) Post-merger is a busy time for companies. The additional resources provided to help speed up network integration efforts with people unfamiliar with the company’s process and process lead to more errors and redesign.
3) Network construction may require approval or private consultation prior to the commencement of construction.