Home EuropeEurope I 2002 New Demands on Billing and Customer Management

New Demands on Billing and Customer Management

by david.nunes
Neil PhilpottIssue:Europe I 2002
Article no.:10
Topic:New Demands on Billing and Customer Management
Author:Neil Philpott
Title:Director of Product Marketing
Organisation:Software Systems ADC
PDF size:24KB

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Article abstract

The telecommunications markets in Eastern Europe and the CIS are changing. Customers are demanding new services, regulations are changing and competition is growing. Most service providers are ill prepared for the challenge. Service providers must learn to deal with customers, to efficiently manage the explosion in products and services and to manage the increased financial pressure growth will bring. The keys to survival will be operating information and flexibility and the key tools will be integrated Operating Support and Billing systems.

Full Article

The financial and political changes in Eastern Europe and the CIS in recent years have been profound and far-reaching. Fast growing middle classes have emerged with increasing technical literacy and spending power. De-regulation is creating great change in the communications industry. Tele-communications service provision is evolving rapidly from state – controlled public service, restricted to the privileged few, to commercial enterprise providing mass-market communications affordable by the majority. At the same time, technological advances from analogue to digital networks and circuit – switched to packet – switched offer low-cost network rollout and the delivery of new service types supported by complex business models. Communications Service Providers in Eastern Europe and the CIS are ideally positioned to reap the benefits of these changes and have the opportunity to leapfrog several links in the evolutionary chain by applying lessons learnt in other markets elsewhere in the world. Communications Service Provider Business Models This market is experiencing rapid customer growth and extensive network expansion programmes. Currently, the focus is on traditional voice and data services where the pent-up demand is huge. The emphasis is on mobile networks, faster and cheaper to deploy than wire line networks, with their enormous potential in pre-paid services. The critical business driver is how rapidly new customers can be acquired and accurately provisioned with services. However, there is a limit to this market expansion and once reached priorities will shift. Looking at the experience of saturated markets, we can predict what will happen next. The price of services will fall, focusing attention on increasing customer base revenues. New revenue streams will be sought from “next generation” products and services, and brands strengthened to attract and retain customers. New products and services will be promoted. Reducing time to market for these new services will be vital. New revenue streams will come from sources other than the end user, such as content provider partners, advertisers, Virtual Network Operators, etc. Operational and cost efficiencies will be harvested wherever found. Cost of ownership of new systems and tight revenue assurance will become critical success factors. To maximize their opportunities, service providers must analyse the interaction between customers, products and financials to prioritise future products and services and to plan resources and finances. The traditional practice of rolling out a product or service, occasionally tweaking the tariffs and designing timely marketing promotions, is nearly over. Next-generation products and services will likely require multiple adjustments over their lifetime, which may be hours rather than months. In addition, personalizing the services and service bundles for specific customers and market segments will be key to developing customer loyalty and a strong brand image. Time to market will be a strategic differentiator. From conception to delivery, the ability to roll out services quickly will be a crucial and decisive factor in dominating competition. To achieve this, greater volumes of dynamic product and service information must be gathered from the entire range of operations support systems. Manual entry into a number of separate systems is slow, error prone and handicaps the race to offer content-based services. The new marketplace is also elevating customer expectations. Service providers will need to profile customer behaviours and preferences, analyse usage trends by segment, service, subscriber, demographics, rate plan, etc. and target services and service bundles. Next-generation services will change the financial dynamics of the industry and service provider costs and charges will no longer be directly related to network transport costs. This will place a higher emphasis on revenue assurance and risk management, including reserving, collecting and distributing monies within the service delivery value chain. It will also be important to continuously evaluate which services remain applicable to the current market demand and whether they are cost-effective and profitable. The need for detailed financial analysis and management information in real time will be mission-critical. Real-time financial management requires a complete view of the service provider’s position – not only its entire customer base but also of the suppliers in his service delivery value chain. The billing solution must support this, no matter what the payment method, providing robust multi-party settlement functionality, and with links to m-commerce and e-banking applications. Changes to existing business models In order to respond to these challenges, dramatic changes must be made to existing business models. The consequences for the service provider will be far-reaching: a migration from simple voice and data to content-rich services that promise to increase service usage and service provider revenues; the need to sustain relationships with a range of partners and manage the complex value chain needed to deliver these new services; the need to determine which segments of the value chain the service provider should fulfil itself and what should be outsourced; an explosion in the number of products and services to be offered by the service provider; the requirement to understand customers’ buying preferences and other behaviours in order to offer products and services that add value to customer lifestyles; the ability to provide the highest levels of customer service in terms of customer choice, empowerment and ease of use; on demand requirements to understand the financial position with respect to the customer base and service delivery partners. Management today seeks to ensure its organization does not arrive at this point in a non-competitive state. Actions taken today, including the deployment of new billing and customer management solutions, should be taken with next-generation business models in mind. There will be neither the time nor the money to respond to changing market conditions if the right decisions are not made today. What is needed from a billing and customer management solution? The current market expansion creates new demands that cannot be met with existing billing and customer management systems. Many solutions already in place fall so far short of meeting the new requirements that they are no longer capable of providing further return on investment; the only available option is a complete replacement. While undertaking the billing and customer care systems replacement, communications service providers need to avoid the trap of deploying multiple distinct billing and customer management systems to cater for the breadth of their market offerings. Multiple systems increase the time, cost and risk of integration with other operations support systems. They typically require information, e.g. customer and product data, to be manually entered in a number of places, making it difficult to assemble a holistic view of the business. They also make it cumbersome and slow to change. To overcome these limitations, Billing and customer management solutions services need to have the following attributes: total configurability, with flexibility to adapt to changing business models and reduce time to market without costly customisation and enhancement; open interoperability to support “flow through” business processes and facilitate the holistic management of the business; scalability to support the increase in customer numbers and in transaction volumes inherent with billing for content-based services; high availability and low latency to provide real-time, always-on responsiveness; and operational efficiency to provide the highest levels of customer service with low cost of ownership. Success in all these areas is beyond the capabilities of most systems deployed today. Instead of enhancement, a new approach to systems architecture based on the use of leading edge information technology such as rules-based systems is required. Such next-generation billing and customer management solutions must augment these attributes with innovative capabilities to deliver customer intimacy, provide a single touch point for product catalogue maintenance, manage settlement across the value chain and support pre-pay, post-pay and pay-now. Get Intimate Knowing customers and understanding what they want and need will be so crucial that a new name has been given to the concept: customer intimacy. Service Providers will need to profile customer behaviours and preferences and to analyse usage trends by segment, service, subscriber, demographics, rate plan, etc. They will then need to target services and service bundles based on market segment characteristics and known customer preferences. Unified product catalogue Operations Support Systems (OSS) are being called on to handle real-time access to information about a rapidly increasing number of value-added content services. Consequently, there is a growing demand to integrate multiple product catalogues from across the OSS portfolio into a single solution for access, content and value-added services, that supports cross-product dependencies, conflicts, prerequisites and associations. Such a solution allows more complex packaging and bundling of products, enables special pricing and eases purchasing by the customer. It also enables automatic publication across the OSS, thereby increasing speed of maintenance and rollout. This solution offers service providers a real-time, dynamic and extensive product catalogue to create new services in one place. It provides one solution for service provider and content partners to access, update and maintain. It makes service information available from a single repository to the entire OSS, thereby reducing errors, time and operational expense. Furthermore, it delivers an external repository in an open, published format for use by third parties such as resellers and even the end customers themselves. Value Chain Support Service providers face complex content delivery value chain involving multiple partner relationships including content providers, financial institutions, advertisers, government (taxation), intellectual property owners, sales channels, portals, etc. The service provider must understand the prices at which it buys and sells content services. It must settle its accounts with its partners, bill its customers and track the flow of funds between all partners involved. Given the volume of transactions to be processed to determine the buying and selling charges in this value chain and the need to understand the financial position at all times, it is not enough to perform sequential pricing calculations. The solution must be designed from the outset to calculate multiple charges for a single event based on different rating keys and to guide the resulting charges to different accounts, all in a single action. This way, it can track a service provider’s customers and accounts, and also be used to enter and track royalties and settlements between content providers etc. across any revenue sharing model. Payment Methods & Balance Management As service providers attempt to provide customers a full “lifestyle support” facility, they must give them freedom to decide which method of payment they wish to use. Just as you decide in a store to use cash, cheque or credit card, with next-generation services you may want to use pre-paid or post-paid pockets in your account or to charge to your credit card or bank account on a transaction-by-transaction basis. This means that the billing and customer with management system must handle real-time, concurrent demands from multiple sources and maintain real-time account balances of pre-paid and post-paid balances in a single customer account, supporting credit limits for post-paid and pre-paid usage. To achieve this, it must manage multiple reservations of currency (monetary and non-monetary) simultaneously within a single customer account as well as managing user authentication and service authorization. Conclusion The majority of systems deployed today lack the flexibility required to react to changes as the market takes shape. A service provider that depends on a solution built on the wrong foundations will rapidly encounter critical limitations in how intimately it can deal with its customers; how efficiently it can manage the explosion in products and services and how effectively it can live with increased financial pressures. Service providers in Eastern Europe and the CIS may appear to have time on their hands in order to learn from experiences in other parts of the world. However, time to react is increasingly short and the wrong decision on billing and customer care solution today could make the difference between survival and extinction.

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