Advertisement
Articles
Advertisement

Targeting Billing as Key Investment

Tue, 05/11/2010 - 11:09am
Jim Messer, Transverse

It's a buyers' market out there, with customers more willing than ever to churn to another carrier if they're not satisfied with the service they're receiving. There are a lot of things that can go wrong between a customer and their wireless service provider, but some of the most common result from failures in business support systems and processes such as billing and charging.

Whether operating in a saturated or a growing market, wireless carriers worldwide urgently need to improve their revenue management in order to retain or increase customer share, and to deliver a profitable business in the face of downward pressure on the pricing of basic wireless services.

Jim MesserPoor billing and charging continues to cost the telecoms industry dearly and is a major contributor to the estimated $40 billion – often more than 1 percent of wireless operators' total revenues – KPMG estimates the global telecoms industry is unnecessarily haemorrhaging each year1. But sub-optimal billing and charging processes and infrastructure don't just drive up direct revenue losses; they also deliver a wide range of indirect negative impacts and costs such as:

Increased churn – Across all customer types including lucrative business customers. Research from Accenture2 has revealed, for example, that 1 in 10 enterprise customers has already changed service provider purely as a result of a poor billing experience.

Slower innovation - Lack of flexibility in billing and charging can impede the rollout of new services, new business models and personalized packages and offers – all of which are desperately needed to shore up cellcos' revenues.

Higher costs – The cost of operating legacy billing infrastructure and the hardware upon which it's based, can significantly impact a cellco's bottom line. An inefficient billing process also raises bill-related complaints and queries – hiking up customer support costs and increasing the amount paid out in compensation.

The good news is, however, that wireless operators appear poised to address these issues and tackle long-standing problems in their business support systems infrastructure. According to research commissioned by Transverse and conducted by U.K.-based telecoms software analysts Telesperience, tackling convergent billing is now the key goal for many wireless operators.

Cellcos Goals

Telesperience interviewed a selection of CSPs of all types and from different regions in spring 2010 – 20 of which were wireless carriers – and asked them what their key business support systems goals were for 2010-11. Sixteen of the 20 wireless carriers in the sample – equivalent to 80 percent – said that they'd be focusing on improving convergent billing during this period. Interestingly, half of the wireless carriers Telesperience spoke to said that lowering the cost of running business support systems, while still important, was now less important to them than improving the efficacy of their systems.

Commenting on the findings of the study, Telesperience's Research Director Teresa Cottam says: "We believe cellcos are now moving away from simply cost cutting to positioning and investing for growth in the post-crunch world. In both mature and high-growth markets there are urgent pressures for the software infrastructure to be efficient and low-cost, while also supporting commercial agility and being flexible enough to accommodate change. Wireless carriers are telling us that they recognize that improving the performance of their software is key to improving their commercial performance."

Other findings from the Telesperience research also point to wireless carriers having now turned their attention to post-crunch growth. For example, the next most common goals stated by wireless carriers in the study were creating a business support systems infrastructure that enables the introduction of new business models and new technologies, as well as one that can handle the increasing number and velocity of new service launches.

The good news is that modern business support systems can help cellcos deliver against all these goals. Using a service oriented architecture approach and Web service-based platforms, for example, makes modern solutions more agile than legacy software and makes it easier and less expensive for IT organizations to manage their back office.

Another approach that helps increase commercial agility while lowering operating and capital expenditure is use of the cloud. A cloud-optimized business support system enables wireless carriers to reduce or reallocate the cost of buying and running a system. They can avoid the capital expense and upfront investment of owning servers, operating data centers and building a business support systems infrastructure. They can shift from a CAPEX to OPEX model – paying a "no surprises" subscription rather than a collection of annual license fees. Unlike the traditional approach, they also only pay for what they use, which allows them to shape cost to demand far more closely – helping them avoid unnecessary expenditure while supporting scalability.

Another opportunity is for wireless carriers to integrate a cloud-optimized business support systems solution with public cloud services such as inventory, fulfillment, eCommerce, and payment gateways. By taking this approach, cellcos can eliminate the costs associated with managing such functions inside their organization, and also benefit from economies of scale that the public cloud offers.

"Business support systems are absolutely critical to the commercial success of wireless carriers," says Cottam. "But cellcos need their software infrastructure to work both harder and smarter for them. What's different in 2010 is that a range of modern technologies and sourcing strategies are now available that offer cellcos a chance to renew their approach to running business support systems, and squeeze far more commercial value out of them. Telesperience believes we're on the cusp of a major refresh of business support systems, and we think this will be good news for both the industry and for our customers."

Jim Messer is president and CEO of Transverse.

1 See Revenue Assurance in Telecommunications – Progressing or Preserving Global Revenue Assurance Survey 2009 Results, available from www.kpmg.com

2 Achieving High Performance in Telecommunications Through Superior Billing: Carriers' and Enterprise Customers' Perspectives, November 2008

Topics

Advertisement

Share this Story

X
You may login with either your assigned username or your e-mail address.
The password field is case sensitive.
Loading