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"the company insisted on using its own indigenous billing system" This is something I have a hard time understanding. Why do companies always seem to insist th

by jorleif 14y ago

"the company insisted on using its own indigenous billing system" This is something I have a hard time understanding. Why do companies always seem to insist that everything in their operations is within their full framework? I mean, sure efficiency on paper (and only on paper as we see in this case), and probably a certain kind of clarity to the organization, but still. The right way to do this would be to have the support functions, such as billing be services that business units use if they think they are beneficial, and otherwise not. It would force support functions to be efficient in a whole different way, market driven, rather than "make executive happy"-driven.

kahawe 14y ago
> This is something I have a hard time understanding. Why do companies always seem to insist that everything in their operations is within their full framework? There might be actual reasons of efficiency and using synergies and if you ever have to comply with regulations, you have one central unit to work on. But I think usually these decisions stem from either a positive will of organizing - because if you have two billing units or systems, things might get out of hand or control and having one just seems more neat and organized and people fear that chaos. Or they stem from nothing but cold, cut-neck, selfish political reasons. Evil-business-guy doesn't want another fish handling money in his pond because just imagine if that little fish turns out to be bigger than evil-business-guy's own billing system? On top of that, even smart-business-guy VERY likely gets a bonus on how much his billing system billed and how well it performed... you think he will let that bonus slip just because it MIGHT be the right thing for winamp? And as a unit helping to bring in the cash, billing typically has a lot of natural influence. And of course we have a lot of 20/20 hindsight in this case. This is a typical example of how difficult it can be to set really good, beneficial goals in an organization and how many natural conflicting interests there can be - and all that in a humongous giant like aol on top of that.
- jorleif 14y ago
  I understand that this "positive will of organizing" is related to legibility in the sense of James C. Scott (see e.g http://www.ribbonfarm.com/2010/07/26/a-big-little-idea-called-legibility/ http://www.ribbonfarm.com/2010/07/26/a-big-little-idea-calle...). But this failure mode is so common, that one would think that it would be in mergers and acquisitions textbooks already! As you say incentives may play a role as well, but I think it is very common that large organisations never actually consider the option of not organizing something, in this case, letting Nullsoft do their billing whatever way they wanted at first, and integrating it later once it is stable enough to allow a complex development project. To lead an organisation, one has to know what is happening in it - This has a complexity cost, which should be explicitly managed. New acquisitions would need to be treated differently, and full assimilations into the acquirer may not be a good result at all.
  - kahawe 14y ago
    > To lead an organisation, one has to know what is happening in it I agree with you but reality shows us different a thousand times over and still these companies exist... even AOL is still around.

by jorleif 14y ago

kahawe 14y ago

> This is something I have a hard time understanding. Why do companies always seem to insist that everything in their operations is within their full framework? There might be actual reasons of efficiency and using synergies and if you ever have to comply with regulations, you have one central unit to work on. But I think usually these decisions stem from either a positive will of organizing - because if you have two billing units or systems, things might get out of hand or control and having one just seems more neat and organized and people fear that chaos. Or they stem from nothing but cold, cut-neck, selfish political reasons. Evil-business-guy doesn't want another fish handling money in his pond because just imagine if that little fish turns out to be bigger than evil-business-guy's own billing system? On top of that, even smart-business-guy VERY likely gets a bonus on how much his billing system billed and how well it performed... you think he will let that bonus slip just because it MIGHT be the right thing for winamp? And as a unit helping to bring in the cash, billing typically has a lot of natural influence. And of course we have a lot of 20/20 hindsight in this case. This is a typical example of how difficult it can be to set really good, beneficial goals in an organization and how many natural conflicting interests there can be - and all that in a humongous giant like aol on top of that.

jorleif 14y ago
I understand that this "positive will of organizing" is related to legibility in the sense of James C. Scott (see e.g http://www.ribbonfarm.com/2010/07/26/a-big-little-idea-called-legibility/ http://www.ribbonfarm.com/2010/07/26/a-big-little-idea-calle...). But this failure mode is so common, that one would think that it would be in mergers and acquisitions textbooks already! As you say incentives may play a role as well, but I think it is very common that large organisations never actually consider the option of not organizing something, in this case, letting Nullsoft do their billing whatever way they wanted at first, and integrating it later once it is stable enough to allow a complex development project. To lead an organisation, one has to know what is happening in it - This has a complexity cost, which should be explicitly managed. New acquisitions would need to be treated differently, and full assimilations into the acquirer may not be a good result at all.
- kahawe 14y ago
  > To lead an organisation, one has to know what is happening in it I agree with you but reality shows us different a thousand times over and still these companies exist... even AOL is still around.