The Trouble with Diversification

The annuls of business history are filled with examples of companies that have diversified – successfully – to create global entities worth hundreds of billions of dollars.  Unfortunately, there are far more stories of poorly imagined and poorly executed diversification strategies that have been a blatant failure.

Here in Rochester, New York, we continue to come to grips with the failed diversification strategy of the once-mighty Eastman Kodak Company – which just emerged from bankruptcy proceedings this week.  No need to go into the details.  You can read all about Kodak’s failed diversification strategy almost anywhere.

What happened to Kodak’s customers?

I’m guessing they went out and had to start over with another vendor of whatever it was they had purchased from Kodak.  There was a very real cost for Kodak’s customers to switch vendors. I hope they all made the transition successfully, but experience tells me some of those customers failed right alongside the photography giant.

As Kodak’s case study (and scores of others) will tell you, diversification is hard.  It’s hard for the employees, for the company and perhaps most of all – it’s hard on customers.  When a company no longer focuses on the one critical line of service on which your business depends, you are going to see a decline in service, it’s inevitable.  Unfortunately, the deterioration is slow, making it all the more painful for the customer.

Has your billing vendor failed at diversifying?

When the telecom and technology worlds crashed in 2002, many billing companies took on a diversification strategy, too.  Sounds like a good plan, right?  Unfortunately, most of these diversification efforts were merely opportunistic – which means they were poorly funded and strategically questionable.

In the world of communications billing, it’s important to make a good choice in a billing partner because the cost to make a switch in this area of the business is quite high.  And to make the stakes even higher, let’s not forget how much revenue and customer satisfaction depend on your back office operations.

Focus.  You need it to get communications billing right.

Get the focus you deserve with the IDI Billing as a Service solution. We have the application, people, platform and communications industry expertise you need to remain competitive and expand your business.