Posted: 03/15/1999
CLECs Wrestle the OSS Beast
By Paula Bernier
And the potential for trouble is mounting as more CLECs move from resale to facilities-based strategies.
While there's a lot of talk about how new competitors aren't weighed down--as are incumbent carriers--with legacy operations support systems (OSSs) that require retrofitting, new players often struggle with what to put on their "clean slates."
"In general, most if not all CLECs are having difficulty with both customer care implementations and billing implementations," says Rich Nespola, president of The Management Network Group (TMNG), an Overland Park, Kan.-based consulting firm.
Great Expectations
According to Doug Ashton, senior vice president of equity research at Los Angeles-based Jefferies & Co., carriers are asking for too much functionality and they often want it within unreasonable timetables.
"Carriers don't even know what to ask for, so they ask for everything," he says. "Vendors don't want to lose the deal, so they promise everything."
And when deadlines are missed, everybody suffers, he says. TeleGroup Inc., Fairfield, Iowa, recently missed its financial goals for a quarter and blamed it on Burlington Mass.-based Saville Systems' implementation, says David Handler, managing director and co-head of the telecommunications group at Jefferies. WinStar Communications Inc., New York, meanwhile, is on its second or third billing system, he says. And, according to a source who asked not to be named, WinStar is struggling to move the data from its previous system to its new system "because the data in the old system wasn't very reliable. So WinStar is sending out of lot of bad billing, which is not being received by clients."
WinStar Senior Vice President and Chief Information Officer Jamie Bullen says the company does have multiple "billers" as a consequence of the many Internet service providers (ISPs) and telcos it has purchased, each of which had their own billing and customer care systems. But he says the company is consolidating those systems, and currently has only three main billing platforms, including San Antonio-based Billing Concepts Inc. for general business and some national accounts and Communications Systems Ltd. (Comsys), St. Albans, United Kingdom, for general business, plus a wholesale billing platform. WinStar had some problems in billing for residential services, which it reported to the Federal Communications Commission (FCC), Bullen offers, but WinStar no longer targets residential users.
Hitting a Moving Target
In any case, it's clear that implementing new billing and customer care systems after a carrier already has customers is "like changing a tire when a car is moving," Ashton says. "CLECs continue to add customers, matching old and new databases," he adds. "Billing may be the last thing CLECs think of."
CLECs often face significant challenges with billing and customer care due to limited staff, complexities in tying into incumbents and a lack of revenue assurance control.
"[CLECs] don't have a good level of expertise here. They're sending kids to play an adult game," says a source who asked not to be named. "All of these CLECs have gone through a difficult earning period, they've managed budgets by cutting back on consultants and on staff. That reservoir of expertise is really not there."
The complexity with billing doesn't necessarily lie in the billing systems themselves but rather in their integration with other systems and procedures at the carrier and the carriers with which it interfaces. Of course, new billing and customer care systems have to be connected to other back-office systems such as provisioning and trouble ticketing at the CLEC.
The Big Picture
"Everyone complains about billing, but to me that's the symptom," says Royce Holland, chairman and CEO of Dallas-based CLEC Allegiance Telecom Inc. "The cause is the front-end systems--order management, provisioning, switch translation. If those are screwed up, then you're going to have terrible information in your billing and customer care systems."
It has to do with faulty data input, constantly having to re-enter data, he says. Many systems require carriers to input customer data four times into four different systems and in different formats, he says. Then, that's compounded when a carrier faxes the information to a local incumbent to get an order filled, and that information has to be re-entered again.
"We've had numerous cases when an RBOC (regional Bell operating company) converts customer service a day early. Then the customer is out of service," he says.
In other cases, there are glitches in moving customers from a CLEC to an RBOC. For example, says Naiel Kanno, founder and president of EXL Information Corp., now owned by Northridge, Calif.-based OAN Services, in one situation a CLEC didn't know that a customer had switched service to an RBOC and continued to bill that customer. The customer got angry, and the CLEC spent a lot of time dealing with an angry customer that wasn't even its customer anymore, Kanno says.
"[CLECs] really still do not control their own destiny, even in facilities-based scenarios," Nespola says. "There are far more interdependency issues, which add to complexity, which adds to time issues."
Many problems have to do with behavioral and procedural problems at the incumbent carriers. But CLECs also have to deal with the technical side of the equation. And creating the gateways between a CLEC's systems and the incumbent's systems is no easy task because each incumbent carrier has unique technical procedures and interfaces.
Tapping into that idea, Nespola has coined the phrase "stretching the rubber band," meaning that as CLECs go from a city to a regional to a national footprint, the complexity of care increases exponentially.
"There are almost 50 solutions and 50 interfaces to do business," he says.
But it's not just the facilities-based CLECs that are up against this challenge, notes Dennis Killebrew, director of marketing with Highland Lakes Software Inc., an Austin, Texas-based company that sells billing, accounting and management control systems, primarily to service resellers.
"What we found is I can do two deployments in the business plans of two resellers--maybe one selling bundled and one selling unbundled [service from the Bell company]," Killebrew says. "The development and deployment R&D (research and development) costs in implementing a billing system are different enough between these two scenarios that the reseller needs integration specialists."
That's where companies such as Beechwood, Clark, N.J., come in. Jason Donahue, Beechwood's vice president of marketing and new business development, says new carrier systems integration is the company's fastest-growing solution set. And 75 percent of Beechwood's carrier-to-carrier OSS interconnection is with CLECs, he adds.
Beechwood counts several CLECs, including Intermedia Communications, OnSite Access LLC, RCN Corp. and Teligent Inc., among its customers. Beechwood sometimes comes into a CLEC through one of its alliance partners, which include Architel Systems Corp., Daleen Technologies, DSET Corp., Ernst & Young LLP and MetaSolv Software Inc., which provide software and services to telecom carriers. In addition to providing integration services, Beechwood helps carriers write rules for tables in order management software, define business processes to go along with new operations support systems (OSSs) systems and more.
Revenue Assurance Control
One of the key business procedures CLECs should consider in writing their billing business plans is revenue assurance control, Nespola says. Revenue assurance control is the procedure of balancing everything a carrier supplies with what it bills and receives payment for.
"Candidly, it's not being done," Nespola says. USN Communications, Chicago, is one example, thought it had access line growth and counted it as revenue, he says. But, he adds, USN didn't have the billing control to indicate certain customers never converted to its services. "It literally put the company out of business," Nespola says.
Kanno offers another example of how bad billing practices can result in significant lost revenue for CLECs. Say a CLEC is offering directory assistance services--provided by an incumbent carrier--as part of its service bundle. Some areas may have limits on the number of directory assistance calls each customer gets with his or her service. If the CLEC doesn't realize this and fails to bill its customers for the directory assistance lookups beyond the incumbent's lookup limit, the CLEC pays for those lookups out of its own pocket. "In the resale world you need to worry about your monthly billing coming back," Kanno says. "You have to make sure what the RBOC is billing you for is at least what you're billing your customer for."
Data Input
One key step to avoid much of the "bad" data within and among carriers is to eliminate the multiple data entry that Holland referred to earlier.
"The solution is one-time data input," Holland says.
That means integrating all the back-office systems to allow data to flow through various systems such as billing, provisioning and trouble ticketing.
When X-CHANGE spoke to Holland in January, Allegiance was in the process of adding automated customer care and trouble-ticketing systems (it had handled these functions manually up until then). And it was automating and integrating those with the order management and billing systems.
That will allow Allegiance to do such things as be more efficient (quicker response to customer calls) and cost-effective (lower headcount at the call centers and ability to get customers on the network faster) in its call centers. Specifically, customer service representatives (CSRs) that previously had to call up multiple screens on their workstations to access different customer information such as payment history, billing record and service history now will be able to access a single screen that condenses all that information.
Holland compares the new system to a Saturn automobile plant that produces cars production-line style for the masses. The previous way was more manual-intensive, much like a Rolls Royce automobile plant that only makes a few hundred cars a year at high cost, he says.
Of course, Allegiance isn't alone in its drive toward centralized data management and the ability to have one CSR handle a variety of services and customer requirements.
Net2000 Communications Inc., an integrated communications provider out of McLean, Va., is doing customized development on top of its Saville Systems billing and MetaSolv customer care systems to allow CSRs do "once and done," says Net2000 President and CEO Charlie Thomas.
"Net2000 CSRs will have all the information available to serve that client for all their needs, whether that's billing, trouble ticketing, service provisioning or whatever," he says.
Meanwhile, WinStar has implemented a customer service and provisioning host database, Bullen says. All tariffs and products are listed there. It also holds information on what customer bought what product and more.
There's a single point of entry to all sales events, whether it's for long distance, local, Internet access or another service. Applications programming interfaces (APIs) allow WinStar to make product catalogs, business rules and other data available to anyone in the organization authorized to see that information wherever they are.
That data will enable WinStar to perform automated flow-through provisioning unless a business rule is violated, he says.
"We have an enterprise-wide data model in one centralized system," Bullen says. "We've got this thing distributed now all over the country."
The One-Stop Shop
Of course, centralizing customer and network data is more important than ever as many carriers expand their businesses to offer new services. Many CLECs and other carriers are moving beyond their traditional businesses to offer additional services such as long distance, wireless, data services or a combination thereof on a retail or wholesale basis.
So carriers want to be able to access data to allow them to cross-market their various services. And they want billing and back-office systems that are flexible enough to allow them to mix and match and alter the rates of services on the fly.
The desire to bill for multiple services is what led Englewood, Colo.-based ICG Communications Inc. to move from its outsourced billing provider to an in-house order entry, invoice and service order processing platform from IBM Corp. called ICMS, says Jim Newman, senior vice president and chief information officer at ICG.
Offering customers a full plate of services is becoming more prevalent to help carriers attract new customers, increase revenues and prevent churn. Of course, offering a wide variety of services also can help retain customers by insulating them from working with other carriers for auxiliary services.
According to Chicago-based Arthur Andersen LLP's "1998 Bundled Services Survey," which polled 169 carriers, the primary reason carriers that serve the business customer segment offer bundled services is to acquire customers (27 percent respondents), followed by to retain customers (19 percent), followed by to grow revenue (17 percent).
"Everybody has been predicting revenue increases because of bundling," says Jim Suzansky, telecom partner at Arthur Andersen. "What was a surprise was the amount of revenue increase due to bundling. It was a surprise because there has been talk that bundling could cannibalize services, creating deep discounts. But these people are saying regardless, people will have profitability."
When asked what the biggest challenge is in offering bundled services, however, more than half of those surveyed replied: implementing OSSs such as sales support, provisioning, billing and customer information systems to support those bundled services.
