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Ten reasons why billing systems, which have come a long way in the last few years, have not yet come far enough...
Billing systems are at the commercial
fulcrum of any telecom operator’s business. They look into the network
to record all manner of transactions and look out to the user to both
gather in revenue and nurture the customer relationship.
Which makes it a shame that they are not better at performing these
vital tasks. Many of these issues will be addressed at Billing Systems
2005, to be held next week in London*.
Here are ten instances where billing systems do not… as it were… fit the bill.
1) impotence: even in what is close to becoming an all-digital age,
billing systems fail to identify all transactions in all corners of the
network. Thus while it is possible to imagine that the 1970s concept of
‘free local calls’ in markets as varied as Hong Kong and the US was
some form of enlightened social thinking, it was in fact the result of
a calculation that putting the necessary metering equipment in place
was more costly than handling calls for free (with an adjustment to the
line rental to compensate). There are modern-day equivalents of this
dilemma.
2) lost legacies: when older telcos conduct audits of ‘inventory’ they
tend to find swathes of network capacity and elements which have been
previously unseen and hence almost certainly unbilled. This is most
obvious on major elements often run with or for other interconnected
carriers — with the resulting lost revenue often reaching astonishing
levels. Plugging these elements into a new billing system can be
onerous, expensive and reliant on sticky tape and string (ST&T)
solutions.
3) too many tick birds…: the realisation that billing systems occupy a
vital position among the expanding plethora of equipment attached to
the actual network (ie, the elements that route and carry the traffic)
has yet to solve the conflicting demands on investment and the
conflicting standards attached not only to billing but to network
management, OSS, CRM etc ad infinitum. This is great news for systems
integrators and software patchwriters
4) …spoil the broth?: Unfortunately, this also leads to clashes between
rival factions claiming leadership in the integration of billing and
other systems. A large telco seeking a one-stop solution to the
integrated billing and back office challenge might be assailed with
bids for prime contractorship from a billing specialist, their switch
manufacturer, a specialist consultant, a management consultant, their
NMS supplier, a systems integrator, a BACC outsourcer, a software
solutions provider, a rival telco or a ‘heavyweight’ IT players such as
IBM or Microsoft. That’s ten categories of would-be supplier with
multiple candidates from each, often approaching different arms of the
organisation. No wonder a mess tends to ensue.
5) tortoise and hare: the proliferation of new services is an ongoing
headache for the transaction processing side of billing. In 3G
wireless, for example, billing metrics might need to embrace an
operator, a service provider and a content supplier, with the added
complication of terminating calls with other operators, etc. The
industry’s response tends to be collaborative and therefore slow, while
the imagination involved in creating new applications is dynamic and
fast.
6) interconnection: the politics of interconnection in transaction
processing (think accounting rates) is harrowing and tends to favour a
lowest common denominator solution to the problem, not least between
advanced countries and the developing world. The complex challenge
faced by billing providers, made worse by the IPR-style premiums which
the industry places upon these systems, increases the likelihood that
less advanced partners will shun them. Paradoxically, this reduces the
flow of revenue to more advanced carriers.
7) over-automation (part 1): not so long ago I received a monthly bill
(although not from a telco) for the princely sum of UK£0.45 (less than
€1). The cost of processing the bill, printing it, and posting it
clearly exceeded the charge to be collected. Industry wisdom was that
the cost of manual intervention to stop such a ludicrous transaction
would be higher than letting it go ahead. True to a point, but the cost
of not processing bills beneath a certain monetary thresh-hold would
seem less. It smacks of an over-zealous reliance on the new technology
after years of billing inaccuracies and mistakes.
8) over-automation (part 2): when the cable supplier from whom I
receive my ‘triple play’ service of telephone, Internet access and
multichannel TV finally integrated its billing systems, I was delighted
to get one bill per month instead of three separate ones. I was even
more delighted to find that they had failed, despite written agreement,
to remove the rental fee for my second line (for the Internet) when I
switched from dial-up to broadband access. Pity the poor soul who told
his bosses that an integrated billing system would save them money by
erasing lost revenue, only to find flows in the opposite direction.
9) the lost opportunity: to some in the industry, the distribution of a
monthly or quarterly bill to a telco or wireless subscriber is a
marketing ‘event’. This is a tentative ploy at best; users look first
at the bottom line on their billing statement and may thus be
disinclined to feel good towards any piece of upselling that comes with
it. The inability of billing systems to support and control the most
valuable marketing plans of all, namely those that promote pricing and
service package innovation and so-called ‘mass customisation’ of
offerings, is depressing. Despite a bewildering array of tariff
options, only the ‘Friends & Family’ package (now nearly two
decades old) and the flat-rate fee offer (back to Hong Kong) can be
described as innovative. The rest is obfuscation of the three-card
trick variety, seemingly designed to confuse the customer. Probably
because the billing systems don’t support imagination of this type.
10) the lost children: where billing systems are integrated with
customer care systems and the inevitable call centres, the rigidity of
accepted practice becomes clearer still, CRM systems can prioritise the
speed of response to calls according to the average spend of the
calling customer. This raw data is an odd, an oddly unreliable, way in
which to assess how people spend their money and their value as
customers. Psychometric billing data is surely what is required.
Not one of these ten points is easy to deal with but all must be addressed at some point. The trick may be who gets there first.
Jim Chalmers
Billing Systems 2005, 5-7 April, Olympia, London. For more information click on the advertisement on this page or click here
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