By Kirill Rechter
February 1, 2013
Many operating companies offer multiple services: fixed-line, mobile, fixed and wireless broadband, applications, content, entertainment, games and so forth. Many of these use separate billing systems for each service. This creates redundant maintenance, adds operational complexity and makes offering bundled service packages and cross-product discounts difficult. Depending upon the operator’s need, there are four major billing strategy options to consider: extend existing legacy systems; implement a parallel system; use a managed or SaaS billing service; or replace the existing billing systems.
Communications service providers that offer more than one service are nothing new in Asia. For many years, cable operators have provided Internet and local telephony services in addition to their core television content. Fixed line operators, especially alternative providers, are expanding their product offerings to include packaged fixed line, mobile and Internet services, while many mobile operators are repositioning themselves as communications service providers with product offerings that include broadband and even fixed line telephony services.
Operators in all vertical markets, including the new competitive services providers and MVNOs that are being launched across Asia, are all adding a range of new value added (VAS) services, such as IPTV and content. These multiple service environments allow service providers to expand their revenue streams, subscriber base and market reach.
Although many service providers offer more than one type of communications service, most multiple service environments in Asia are not yet fully integrated; they often lack a customer-centric service strategy. Service providers throughout Asia commonly use separate billing systems and processes for each service type. There are tier one service providers in developed countries known to be running dozens of separate billing systems, while emerging service providers in developing countries often rely on ad-hoc billing processes and a combination of legacy systems.
There are certain circumstances when parallel billing systems may be appropriate. However, in general, running more than one billing system creates significant IT overhead and operational complexity. Equally as important, when using separate billing systems for each service type, it is operationally difficult to offer cross-product packages and volume discounts. Cross-product packages may not even be functionally possible, since the many of the important customer management features and service activation workflows are programmed separately and set to a specific service type or network.
Service environments with numerous billing systems are often a natural consequence of rapid growth and new service creation. As a result, billing processes can easily become unstructured, creating an awkward situation in which a service provider can lose control of its revenue generation and customer management activities.
The appropriate time for a service provider to evaluate its billing processes and consider its options for a billing system is generally during the planning stages of a new service. Rolling out a new service with a holistic billing approach is essential. Merging multiple business lines into a unified billing process is ideal and often recommended. This of course is easier said than done.
The following are four billing alternatives worth considering when planning a new service.
Option 1 – Extend the functionality of a legacy system
The rollout of an additional service creates several new billing workflows to serve the needs of customer management, order management, service provisioning, rating and interaction with network resources. The functionality required to support the billing workflows of a new service can often be added to a variety of legacy systems; the needed systems or modifications can be internally developed or supplied by a vendor. This alternative can provide a quick solution, although managing the business evolution of this development effort may become a difficult and expensive process over the long term.
Option 2 – Implement a parallel system
For a service provider that is offering a traditional communications service and is committed to an existing billing system, implementing a parallel billing system for a new service is a reasonable consideration. In such a situation, a service provider may not be ready to abandon an internally developed system even though its workflow processes may be dedicated to a specific service or network type. To support a second service, a service provider could deploy a parallel billing system to run side-by-side with the legacy system.
However, this solution has many limitations since using two separate billing systems usually creates redundant maintenance work and adds to operational complexity. At the same time, two independent instances of customer databases, rating engines and product catalogues makes offering bundled service packages and cross-product discounts difficult.
Option 3 – Use a managed or SaaS billing service
A managed or Software-as-a-Service (SaaS)-based billing service is a good option for a service provider to expand its service offering without investing in additional network infrastructure. A managed or SaaS billing service removes the need to license, deploy and maintain a dedicated billing system for additional services.
Many established service providers are using a managed or SaaS billing service for their rollout of machine-to-machine (M2M) enabled services. By using a managed or SaaS billing service, a service provider can focus on marketing the additional services and can eventually move the billing operations of its core service to the managed or SaaS billing service.
Option 4 – Deploy a replacement billing system
For a service provider with defined growth plans that will fully embrace multiple service environments, replacing disparate billing systems and unifying billing processes should be strongly considered. By managing a fully functional billing system with a single customer database and centralized product catalogue along with support for unified order management process and convergent rating capabilities, a service provider will be well positioned to succeed with multiple service offerings. Such a billing operation can facilitate increased revenues with advanced service packaging and discounting capabilities and, significantly reduce operational complexity.
It is important to emphasize that a service provider that opts to replace its legacy systems should be prepared to allocate the resources for an involved deployment process.
What is best for your company?
Which option is best for a specific service provider depends on its particular growth plans and objectives. In any circumstance, it is best to achieve and maintain a holistic approach to billing operations that positions a service provider for future growth.
Replacing a rating engine or adding a product catalogue might be an acceptable solution to support the needs of a new service for a service provider with a strong core billing system.
A parallel billing system could be appropriate for a service provider looking to add a second service to a core offering. Nevertheless, this option has its upward limitations in terms of no ability to offer cross product discounts, while creating redundant maintenance work with two customer databases, two product catalogues and two workflow processes.
A managed billing service using a SAAS model is an attractive option for service providers of any size and in any vertical market to offer new services without investing in additional network infrastructure or deploying a dedicated in-house billing system.
For services providers with definitive growth plans that includes offering a range of multiple services, a fully functional billing system with strong parameter-based rating and the ability to support multiple services with a unified customer database, centralized product catalogue and strongly integrated workflows is a must.
Kirill Rechter is the CEO of LogNet Billing.