Alexander Ivakhin Issue: Africa and the Middle East 2007
Article no.: 13
Topic: From BSS to CRM to ERP and back again
Author: Alexander Ivakhin
Title: Senior Vice President
Organisation: CBOSS
PDF size: 208KB

About author

Alexander Ivakhin is the Senior Vice President of CBOSS Corporation; responsible for ERP, corporate finance, HR and corporate technologies. Mr Ivakhin has more than 18 years of experience in IT and telecommunications. His specific areas of expertise are design and development of application software. Mr Ivakhin joined CBOSS after extensive academic and teaching experience in both fundamental and applied mathematics in higher educational institutions of the Russian Federation. In CBOSS, he rose steadily through the ranks from lead expert to division head. Mr Ivakhin has a degree in applied mathematics.

 

Article abstract

Telecom service providers cannot use ERP, Enterprise Resource Planning, systems for billing. ERPs are primarily non-time-critical analytical systems. No existing ERP handles the real-time processing of millions of customer records and thousands of operations that telecom BSS, business support systems, routinely process and act upon. Telecom BSS/CRM, customer resource management, systems can provide efficient pricing, financial service and debt control on the fly. Telecommunications providers also need the seamless collaboration between prepaid systems and network elements of a BSS.

 

Full Article

It would seem that billing fits naturally as a function of ERP, Enterprise Resource Planning, systems. Moreover, industrial enterprises utilize this feature of their ERPís Sales and Debtors modules to charge for products and services sold, send bills and monitor debts. Modern solutions are already equipped to deal with advanced pricing, bonus management, debt restructuring and collection. Why is it, then, that ERP systems are so little used in the telecom and energy markets? Why, for example, does SAP, the largest ERP vendor globally, offer the energy suppliers that use SAP for utilities, a specifically designed vertical solution for billing, rather than its sales and debtors modules? Any telecom IT specialist can answer these questions easily. The huge customer and operation data volumes pose the first challenges to ERP as a billing system. No existing ERP system is ready to process the millions of customer records and the thousands of operations telecom systems record each month. ERPs are not high-availability systems. They are designed mostly for manual entry of transaction data and non-time-critical analytical processing. Business support systems operate in a tough environment, where it is necessary to process thousands of automatic requests a second, although some analytical data, such as customer balance, available airtime or traffic, is returned on the fly. The second problem is functionality. No matter how fast ERPís advanced pricing or debt control evolves, it wonít be able to support the volume of charges in the dynamic telecom market. In this environment ERP needs constant improvement and complex in-house add-ons, which threatens system integrity and backward compatibility. Telecom BSS/CRM, business support system/customer resource management, systems were initially designed for industry-specific service models for functions such as efficient pricing, financial service and debt control. The third problem is integration. A telecommunications environment needs seamless collaboration between prepaid systems and network elements, which are fully supported by a BSS but hardly at all by ERP packages. CRM systems have stemmed out of ERP. They are a vivid example of the demand for customer-oriented business systems as opposed to the accounting and operation-oriented ERPs. CRM was not a revolutionary product with totally new functions. Instead, it shifted the focus of existing systems to the customer. The customer became the starting point for operations and management. In fact, CRM had the customer as a centre of the whole information environment. Business support systems followed the same track. Information and event models focus on customers and services and growing around the customerís account. However, CRM still uses manual entry as a source of operational data; this delays analytical processing, so in this respect it is closer to ERP than BSS. Thus, a telecom company inevitably needs a specialised vertical business support system. The BSS cannot be fully built in or added to ERP. That is why the BSS is a key element of the IT application infrastructure in telecommunications. BSS – a comprehensive solution Profitability, ARPU, average revenue per user, total revenue and customer base characteristics (size, growth dynamics) have always been the key performance indicators in the telecom sector. Consequently, BSS solutions were built around the core telecom business management functions: revenue assurance and billing. The functions gained utmost importance in the mid to late ë90s. Telcos, desperately struggling for customers, needed new services, flexible tariffs and customer base analysis by value and segment. With growing subscriber bases, the only way to cut costs was to optimise customer care and reduce expenses per customer. BSS systems indeed play a key role here as any organisational initiative depends on their functionality. It is impossible to expand sales and payment collection networks if the BSS canít support centralised dealer management and settlements. BSS systems should also be technologically scalable, not only vertically to ensure optimised performance, ergonomics and technological effectiveness for dynamically growing production volumes, but also horizontally for functional scaling and development. CRM systems were the first milestones. Already by the late ë90s market leaders started providing full-scale CRM solutions within their BSS systems, supporting marketing functions, online customer interaction and dealer management. It is noteworthy that all modern universal CRM systems include such an important customer interaction tool as a call centre. OSS/BSS solutions provided call centre functionality even before CRM systems, as such, came to the market. The BSS call centre module became a logical consequence of computer telephony. Todayís feature-rich BSS systems offer an exhaustive range of functions for telecom business. Some of them even automate adjacent processes. For example, some BSS solutions support inventory, task management, personnel administration and payroll accounting. BSS functions were growing along with their customers – the telecom operating companies – and only solutions that laid a solid technological and architectural foundation managed to survive. A strong and stable mid-size telecom company usually opts for a powerful, full-scale, BSS solution as a single mission critical IT application. The business logic and architecture choices are dictated by pragmatics: it is simpler, more profitable and reliable to construct a large building on a single strong monolithic foundation, rather than on three or four smaller ones with differing characteristics. BSS systems have already entered the next level of convergence – convergence of management technologies within the framework of a single, comprehensive industrial solution, encompassing ERP and CRM functions. Telecom business today When choosing an IT solution, a major company looks not only at the functionality; it is not enough to know if the system supports all the necessary processes. In spite of all the power of modern BSS solutions, major telecom holdings opt for ERP systems. It is true and inevitable, and there are two possible explanations for this trend. First, an ERP solution is a compromise used for financial management in a heterogeneous environment. Companies grow both organically and by mergers and acquisitions. Having acquired a new business, they tend to keep the legacy technologies, continue to use different billing systems and, in some cases, retain the legacy business processes and organisational structure. Depending upon its history, large companies often end up using multiple – largely incompatible – IT applications. In some cases, the lesser evil – compared to replacing acquired technologies – is the creation of a management system, based on a classic ERP, which aggregates data from all the companyís applications and then integrates, consolidates and analyses key performance indicators to enable corporate reporting. Second, large IT investments appeal to public companies and their investors, and might be a deciding factor in the selection of major ERP systems. Very often accounting modules are the first and sometimes the only modules implemented. However, it is just what investors need: financial reporting, reliably controlled, enabled by an ERP system by vendor consultants they trust. Nevertheless, they often pay a high price just for the name when buying a famous brand ERP. Universal integration solutions Integrating multiple applications is an expensive, time-consuming and poorly reproducible process. For several years now, the major analysts of corporate software have called for a transition from commercial integration projects to the adoption of universal solutions that support easy integration – composite applications. The rapid penetration of service-oriented architectures, SOA, heralded the emergence of composite applications; today, most major business applications provide web-based access to all of their functions. The idea of composite applications is not new but it is very significant that business application and technological platform vendors have finally agreed upon a series of widely recognised standards for data representation and interaction. These standards make full-scale composite applications possible today. An early experience in building composite applications provided a solution that linked BSS financial data to ERP debtors and ledger modules in 2004. The composite environment of the solution met the most critical telecom requirements for performance and information security. A composite application should be based upon an ideal reference data model with event processing and interfaces to major systems. A popular environment for major customers now, is a fully integrated BSS/CRM solution with ERP modules for finance and personnel management that permits any update and modification of its components. The future of the large business segments is with industrial applications; these are natural to the modern system landscape. Telecommunications have always been at the cutting edge of innovations and will surely be the first to adopt new technologies.