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The global telecommunications trend has witnessed a gradual shift from the traditional practice where national telecommunications service providers formed a monopoly both on the international and national markets. This traditional system is referred to as “network of networks”. The modern practice, however, has witnessed change whereby system integrators have been formed to offer services to the end users.
These integrators interconnect between each other’s services and customize their services for individual end users’ good. The system has been referred to as “system of systems”. This paper explores in detail the new trend being witnessed in the market and analyzes its general impact as well as carries out a future analysis of the systems integration industry.
Impact of systems integrators on responsibility issues
Systems integrators will basically play an integral role of influencing relative price reductions to the end users. As the practise is today, consumers incur a lot of expenses in trying to obtain all round service through integrating numerous service providers. In order to acquire the right mix and integration, such integration would be too costly for individual or corporate users as it would also mean they hire expertise to help them out in achieving this goal.
However, with the availability of systems integrators, users will no longer need to bother about choosing a portfolio of individual providers and determining each of their prices before integrating right choice of mix. There would equally be no reason for end users to incur extra costs and time hiring IT experts to execute their local integration (Noam para 5).
The integration of systems, to a larger extent, would also result in improved service provision and therefore enhance quality on the part of users. The service integrators will particularly come up with tailor made services which will exactly suit users’ needs and therefore enhance their service provision or general satisfaction. The array of services will also be varied, including e-mail, data sources, transaction programs, bulletin boards, as well as audio and video publishers.
Others will also include personal information screening, users groups, data storage services and, for residential users, customers’ telecommunications node within their premises’ vicinity. The provision of all these services and many others in one stop will enable consumers obtain their right choice of quality and mix without harboring doubts on quality because they will have a choice of demanding for what they think they rightfully require (McCauley 19).
Heightened competition is also likely to be witnessed across the telecommunications industry as a result of these service integrators. The liberation of the industry has limited government regulations which mainly existed to advance monopolistic policies and rules that aimed at protecting the national telecommunications service providers against any form of competition.
However, with the new trend where markets are defined more along customization and tailor made services rather than the traditional generalized delivery of service, entry into the market of other small scale service providers has brought about competition. Every service integrator is seeking to improve on delivery and service provision as a whole so as to win more customers. As a result, the system integrators have assumed the role of agents for end users against carriers.
Where particular carriers are providing poor services, the service integrators intercept in order to protect their end users against such below par services. In other words, traditional problems that were associated with price, quality, market power and privacy have all been eliminated as a result of the competition witnessed in the market today.
The level of government control has also reduced considerably with the shift from traditional national telecommunications service reliance to systems integration. The market and indeed the industry have generally been liberalized and therefore many players have been encouraged to enter. The relaxation of strict barriers that discouraged investors from venturing into the industry have also seen national governments do away with archaic laws that prohibited others from competing with the national telecommunications service providers.
On the negative side though, the competitive pressure being exerted by systems of systems will definitely affect costs and prices in general. Although to the end user things are becoming more and more affordable, there is a huge challenge faced by systems owners on their capability to maintain the redistributive system that has traditionally existed.
Generating subsidies as well as trying to transfer them internally from one user category to the other within the same service carrier is becoming impossible. Among the reasons identified to be affecting the existence of such an arrangement is the inability to sustain an internal redistribution given that there could be other carriers lacking redistributive burdens, and which could be targeting the subsidizing users.
Residential users may equally pay a much higher share compared to large users like corporate organizations because cost shares amounting from the substantial joint expenses and costs may inversely be allocated to demand elasticity.
Additionally, the corporate organizations which are generally categorized as large users have more than one option thus making them have greater elasticity. The inelastic customer will be more disadvantaged because the current trend of price rebalancing with reference to total costs incurred will exceed its objective (Harrigan 638).
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The confronting of these issues
There have been witnessed several attempts and efforts which aim at confronting all the issues that were raised by Naom 9 years since he wrote his article on the emerging telecommunications trends. Firstly, public telecommunications operators are trying to protect their local markets by barring entry of systems integrators while at the same time they are attempting to venture into the international market.
In essence, public telecommunications carriers from different countries are together forming a global systems integration forming dominant alliances. This trend has particularly been shaped up by the realization that private systems integrators, particularly from the United States of America and Japan, offer competitive services which can easily jeopardize the public telecommunications operator’s position.
Authorities from different countries are also trying to come with new regulations that effectively address developments that come with the emerging telecommunications trend. There are difficulties, however, in addressing this whole issue because there is also need for allowing freedom and liberation to thrive in an industry that has for long been governed through monopoly.
Some regulations imposed by authorities with the intention of opening up the market for free and fair play for all have, to the contrary, ended up curtailing on competition. The dynamism of the information technology has further compounded efforts to derive long time rules for the common good of all users. The highly innovative industry has seen inventions come up within short intervals that incidentally render the immediate former innovations and advancements obsolete.
The future of systems integration
Systems integration has a very enormous potential which remains largely underexploited. Restrictions still being witnessed in the name of providing barriers to market entry by large state-owned telecommunications carriers undermine its capabilities. However, as the information technology industry in general continues to expand with fast innovations, systems integration will most likely be the choice of many in the years to come.
Globalization has brought about the need for people to rely more on information than has ever been the case. Many people continuously search for information sources that can satisfy their own unique quest without necessarily having to deal with a service that is too general and time consuming. The customized services for end users are more appealing to the consumers and offer them with the flexible choice of selecting packages that appropriately serve their needs.
The high service quality that comes with systems integration is also likely to play an important role in establishing it as the future system of choice. As the competition amongst players intensifies, the ultimate consumer becomes the beneficiary because systems integrators are improving on their general service delivery to ensure they attract a large market. Prices are also relatively cheap as compared to the network to network system which apart from being costly is too rigid to suit customer demands (Sarkar, Cavusgil and Aulakh, 361).
Technology and the future of university education
Naom’s predictions through his article titled “Electronics and the dim future of the university” have actually come to pass. The classic university set up has gradually been altered by the information technology through its immense capabilities (Piccoli, Ahmad and Ives 401). Through innovations experienced in the information technology sector, the need to have physical universities as centers of knowledge has been phased out and instead new trends, as predicted by Naom, are emerging (Fletcher, Sigmund and Wisher 96).
The changes so far have witnessed long distance or virtual classes take precedent in the modern days where video and internet equipment are used together to relay recorded lectures to students. Often, the students go about their normal studies but from remote locations that could even mean different countries or continents.
The physical distance that existed in the traditional days has been eliminated and modern universities now have wider coverage than ever before. Further changes are expected to effect Naom’s observations back in 1995 even as the highly dynamic IT industry develops fast, improved, and reliable services (Noam para 4)..
The telecommunications sector has undergone a lot transformation in the recent past following the gradual improvement of the information capability. The internet in particular has made it possible for traditional telecommunications services to pave way for a new trend of systems integrations which basically improves on service delivery and quality of telecommunications services.
A majority of public telecommunications operators have been exposed to competition from the systems integrators following the removal of monopolistic laws that shielded the mostly state-owned operators.
The trend has seen the national and public telecommunications carriers concentrate on international operations as they interconnect their services with other international operators to form a global integrated system. The extent of IT effects has also affected the manner in which institutions of higher learning like universities operated traditionally, causing new trends and practices where learners no longer need to converge at a central location for purposes of taking their studies.
Fletcher, James Douglas, Sigmund Tobias and Wisher Robert A. “Learning anytime, anywhere: Advanced distributed learning and the changing face of education.” Educational Researcher. 36.2 (2007): 96-102. Web.
Harrigan, Kathryn Rudie. “Formulating vertical integration strategies.” The Academy of Management Review. 9.4 (1984): 638-652. Web.
McCauley, Herbert N. “Deceloping a corporate private network.” MIS Quarterly. 7.4 (1983): 19-33. Web.
Noam, Eli M. “Beyond liberalization: From the network of networks to the system of systems.” Columbia Institute for Tele-Information, n.d. Web.
Noam, Eli M. “Electronics and the dim future of the university.” Columbia Institute for Tele-Information, August 18, 1995. Web.
Piccoli, Gabriele, Ahmad Rami and Ives Blake. “Web-based virtual learning environments: A research framework and a preliminary assessment of effectiveness in basic IT skills training.” MIS Quarterly. 25.4 (2001): 401-426. Web.
Sarkar, M. Baenitz., Cavusgil S. Tamer and Aulakh Preet S. “International expansion of telecommunication carriers: The influence of market structure, network characteristics, and entry imperfections.” Journal of International Business Studies. 30.2 (1999): 361-381. Web.