intelligent

Sam Dunscombe , Head of Growth , Mobilise

BUT IT ’ S WHEN ORGANISATIONS

START CONSIDERING

THEIR SUNK COSTS WHEN DETERMINING STRATEGY THAT IRRATIONAL DECISION-

MAKING – THE SUNK COST

FALLACY – COMES INTO PLAY . integrating a new Digital Transformation plan to sit alongside all of this legacy complexity will take too long and cost too much . Additionally , it ’ s commonly perceived that the commercial benefits of making such a large , strategic change will take too long to realise and are too hard to quantify to make it worth the effort . Additionally , on an individual level , people naturally find it difficult to accept loss in any form and prefer to follow their decisions through , even when failure is inevitable .

A short-term fix

Despite this , there ’ s a growing number of applications where taking a different course of action is unavoidable . It might be an individual project , or one business area that desperately needs a quick fix to their digital needs . Short-term trading , the drive to maintain a competitive edge and the need to respond to market conditions mean that most organisations tend to opt for the fastest solution , which is to implement a new singular proposition or project in silo with existing infrastructure .

While this fixes the imminent issue , it doesn ’ t support the organisations ’ long-term technological development . Siloed systems aren ’ t something to shout about either – they prevent overall visibility of a business ’ data and activity and arguably create an even more complex , entangled system than the original legacy system that was in desperate need of an upgrade .

While the sunk cost fallacy is a problem that all organisations face , it is particularly pertinent in telecoms , where established service providers ( SPs ) implemented a system

ten or 20 years ago and are unwilling to let it go . It ’ s also common that , despite being new to market , hyper agile and successful in their own industry , a business faces hurdles when it wants to move into a vertical or offer a different suite of services .

Short-term pain , long-term gain

It ’ s clear that in the long-term , the ideal solution is to transform the technology stack into a digital , agile platform that has the capability to make quick changes , add new functionalities and react to market fluctuations . But the sunk cost fallacy is preventing SPs from making this switch .

There ’ s also an added layer of complexity pertinent in telecoms too , in that established SPs have a longstanding tendency to keep all of their technological development in-house . While this strategy worked ten years ago , it ’ s no longer fit for purpose . Across any industry , the businesses that are disrupting the market are those partnering with external experts .

According to Equinix , 62 % of IT decisionmakers globally cite a shortage of talent as a principle threat to their business ’ success . There simply isn ’ t enough talent for each SP