Marketers are continually looking for new means to expand their market share and revenue streams by packaging communication services to attract, win and retain the most valued customers.
While these developments present new opportunities for service providers, they also present significant challenges in billing, customer care and operations support systems (OSSs). Silo, or stove pipe, business and network support systems that take an assembly line approach to customer interaction--sell, order, provision, bill, then collect--must now converge to meet the real-time, one-stop service demands of high-end customers.
In the new world of next-generation network services, billing and customer care systems are taking their rightful position at center stage, alongside the customer. Telecommunications service providers recognize the mission-critical role that business systems play in their ability to retain market share and financial viability--from creating new value propositions and predicting customer churn to collecting and booking revenue and predicting future revenues and profits.
Traditional business systems designed for separate business lines, such as local, long distance, wireless and data, are proving to be inadequate for this new environment. A business system capable of supporting next-generation network services must enable bundling of all communication products, and also products from outside the industry such as energy and entertainment. In addition, modern pricing methods must support flat-rate, volume sensitive, usage sensitive and customer rewards to enable providers to achieve market leadership.
To understand the intricacies and necessary features of a next-generation billing and customer care system, it is helpful to examine the offering of traditional voice services--the market factors and billing, customer care and OSS requirements that existed in that environment--and compare them to the needs service providers have today.
Of course, there are some inherent differences that exist between offering traditional voice and next-generation services--all of which impact a service provider's support systems.
Credit-Based vs. Prepaid
Traditional voice services operate on a credit basis. Once the provider has verified a customer's ability to pay, the customer is encouraged to place unlimited calls--as long as the account is kept current.
In contrast, suppliers of Internet, voice over Internet protocol (VoIP), niche long distance, and even wireless services utilize credit cards, bank debit or prepaid service as their preferred means of payment. In addition to providing their customers with convenience, these approaches reduce the provider's chances of loss.
Multiple methods of tender exchange are attractive to specific segments of the market. Therefore, the wise service provider will offer numerous choices for customers to settle their charges.
Monopoly vs. Competitive Marketing
Historically, customers had a choice of one provider for local voice service, and only limited choice for long distance or alternative data services. In this monopoly-like environment, packaging of services was designed for residential or business accounts, and it was assumed customers fit neatly into one segment or the other. In addition, providers offered service to all their customers at a single price. Over time, this evolved to the offering of various prices to particular groups within a provider's customer base.
Today, end users have a seemingly endless choice of providers, and, because their usage patterns often blur the lines between home, small office and business, they are demanding service packages tailored to their personal needs. The pricing front has continued to evolve to the point that today's providers must be able to implement market-of-one pricing strategies if they are to keep their customer base.
The age of the service provider simply acting as an order taker has come to a close. Marketers must aggressively and creatively pursue their customer base and drive sales. To win customers, build market share and establish a leadership position in the marketplace, providers must have a proactive and inherently innovative wholesale and/or retail strategy with the ability to act swiftly upon new opportunities.
This strategy must include tactics such as pinpoint geographic marketing, a continual stream of innovative new products and packages, individual-case pricing, multiple distribution channels and eye-catching advertising. In St. Louis, for example, one competitive local exchange carrier (CLEC) states in a highly aggressive and visible advertising campaign, "100 percent of our customers fired Southwestern Bell."
A la Carte vs. Value Proposition
Voice service was traditionally marketed a la carte, where each piece was individually priced. Today's marketplace is crowded with providers offering endless combinations of voice, data and enhanced services. Aligned with the network access providers is a wide array of resellers who buy wholesale services and package them to target the specific needs of market segments or individual customers.
End users have demonstrated a strong acceptance of purchasing multiple services from a single vendor. Service providers are rushing to meet that demand, recognizing the more touch points they have with a customer, or services they offer, the less likely a customer will be to churn. Providers tend to enter the market with voice or data services and then quickly position their organization as either a high-value or a mass-market vendor.
High-value vendors tend to supply whatever services a specific market segment considers to be of value, at a price equal to the customers' perception of value. Mass-market vendors tend to offer a single product or a small package of products at the lowest cost.
The CLEC marketplace is an excellent illustration of the success of convergence/multiple services. In this market segment, it is quite common for end users to contract with a single supplier for practically all their telecommunications needs, including local, long distance, Internet access and high-speed data services. This trend will continue, and it won't be long until things such as electricity, cable television, home and business security and even merchandise are added to the list.
In the traditional voice world, service providers enjoyed being able to decide for their customers what hours of service and service options they could have. Regulatory policies forced stand-alone lines of business, and customers were expected to make several contacts to buy product, check the status of orders, query their bills and log service issues.
Now, customers are taking control. They want to decide which services best meet their individual needs. They want to interact with service providers whenever and however they want. The phenomenal success of the Internet as the always-open storefront for selling and service means customers increasingly want to place and activate their own orders and maintain their own accounts over the web, forcing telecommunications service providers to rethink the business models of yesterday.
Service providers must offer their customers a variety of options for doing business. Dedicated account teams, specialized 800 numbers, secure extranets, always-open service centers and well-mapped, user-friendly websites should all be in place to allow customers to interact with their provider, at their convenience. If their current provider doesn't supply these things, customers will go elsewhere.
Order Entry vs. User Interface
Because voice OSSs were built from the network out to the customer, business support systems were built to satisfy the technical needs of the network and assumed the user would be a highly-qualified service agent. The order would pass from department to department until all the necessary technical information had been appended.
Next-generation business systems must be built for the customer or non-technical agent, hiding all complexities behind the user screen. In an environment where selling systems, network operating support systems and billing systems all have their own customer record and proprietary data structure, it is difficult to meet this need. In fact, in the current telecom world, 70 percent of the implementation effort for a startup is enabling disparate software packages to talk to each other.
Perhaps it is time for a new model where the billing system is the storefront. Customer identification of their location and their communication needs should find a match in the billing product catalog. Selection of the product or package from the catalog should generate the appropriate orders to the supply chain and delivery status should be immediately updated to the customer record. Customer generated transactions should be immediately priced and reflected on the customer record. Customer preferences for product payment should be processed with the customer having the option of paying via invoice, credit card or bank debit. By positioning the billing system at the front of the business and using the billing system to initiate service delivery, price transactions and generate invoicing/payment information, customers can be assured their records contain the most current information. One-stop customer sales and service can then truly be enabled.
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Business Capability Checklist
Following is a listing of vendor and system attributes vital for moving the telecommunications industry to the next generation. Matching Vision Next-generation networks must be supported by a next-generation business system. The development of these systems requires a vendor with an in-depth understanding of the traditional industry as well as a compelling vision of tomorrow's industry. It is good business for service providers to ensure their software vendor shares a similar view of the direction of the industry and how the software can be evolved to maximize the provider's business success. Business Control In a time of significant change, business moves and counter moves can mean corporate life or death. The business system must enable the merchandiser to take advantage of new opportunities and to counter competitive threats. A marketer must be able to introduce new services, create new bundles, and implement new pricing structures, and also to change suppliers, distribution channels, switch vendors and transport technologies as market conditions demand. Process owners must be able to change policies, work assignments and customer interaction methods in concert with opportunities to enhance customer satisfaction levels or reduce operating expense. Selecting the business system that best matches its marketing and business strategies is as vital to a provider's success as the selection of the correct network technology. System Growth in Concert with Business Growth In the traditional voice world, scalability referred to the ability to support growth in a service provider's subscriber base. While this is still important in the next-generation services market, with its plethora of emerging suppliers and the chance for overnight success with a new killer application, scalability in this market takes on a broader definition. In this sector, where service providers are often rapidly entering numerous geographic areas, scalability refers to a system's ability to support multiple markets, each of which has a unique set of regulatory issues, products and pricing plans, and other individual, business-affecting characteristics. Supply Chain Integration A business system's ability to interoperate with network operations support system (OSS) elements and other supporting systems is critical. Billing systems must seamlessly hook into a host of support elements, including switch provisioning, mediation, order management, etc. The ideal business system is one that is highly configurable, allowing it to offer a service provider all the functionality it needs to support its customer base with the flexibility to implement select elements and integrate them with other suppliers' solutions as its business needs and plans require. Further, service providers should ensure they can collect service configuration information and manage the supply chain and computer communication protocols without extensive interaction with the software vendor. Time to Market In the voice-only world, it was perfectly acceptable to take six to 12 months to introduce a new service, such as call waiting. In today's market, service providers are putting their business at risk if they wait six days--or in some cases, six hours. Survival in the next-generation network environment depends on time to market factors. When a competitor announces a new, simpler pricing structure, or a protection plan that ensures customers receive the lowest rates possible at all times, response must be quick, or service providers risk losing revenues and valuable market share. Total Cost of Ownership With today's demanding shareholders and shrinking margins, service provider personnel are being asked to do more with less. This places the total cost of ownership of the information technology investment at the top of the consideration list. The more complete the business/billing system, the less a provider will have to spend on other applications and supporting hardware. When evaluating the cost of a system, it is important to look at the hardware and database costs, and also the ongoing maintenance fees. Flexible Delivery Options Effective business applications, scalable platforms and a world-class network are critical to the success of today's communication merchandiser. However, they must be deployable in a manner that meets the provider's specific business and financial requirements. Some providers will prefer to purchase the software for installation at their own locations. Others may determine entering into a facilities management arrangement is the best path for them to take. Still others may opt to migrate to a site license at a later date. The key in this area is ensuring the vendor supplies options that will meet a provider's specific needs. |
The paper statement was adequate for the traditional voice world. As long as it arrived on time, was accurate and had an easy-to-read layout, most customers were happy.
In the world of converged, next-generation services, however, paper is becoming obsolete. Corporations and other high-usage customers rely on the invoice data for cost analysis. Wholesale customers rely on it for reconciliation processes and network cost analysis. These providers need charge information in electronic format so they can manipulate the invoice data to meet their specific information needs. The electronic invoice can be delivered on a CD-ROM, via a file transfer protocol (FTP) site, or otherwise over the Internet, but it must contain easy to navigate, complete data.
In addition, consumers and small businesses are increasingly interested in Internet bill presentment and payment (IBPP). IBPP is typically offered in one of three ways: via a provider's own website; via a bill consolidator; or by push technology, which delivers statements directly to an end user's desktop. As more customers recognize the many benefits IBPP presents, such as savings in postage, check printing, time and the convenience of consolidating financial data, the popularity of this delivery method will continue to increase. It will become a check mark item service providers must offer their customers.
Real-Time vs. Batch Processing
Perhaps the biggest change with next-generation network services is that business has become more real time. While the traditional voice world involved time delays, instantaneous access to the Internet has raised the question--why can't all business interactions be real time?
Graph: Billing for NextGen Services? Watch These Key Differences
In the world of high-tech services, agents will be expected to provide real-time support for business functions. Customers will want instant access to network services, in-progress updates to charges and current balances for all their communications services--paging, cellular, data transfer--so they can perform accounting functions as their business needs require.
To supply real-time information effectively, customer service representatives (CSRs) need simple, instant access to sales, customer service and billing information. Providing CSRs with current customer and service information will require interoperability among the business/billing system, network operating systems and supply support systems.
Single Source vs. Chain Management
This brings us to the issue of supply chain management. In the voice-only world, a service provider had its own switches and acted as its own supplier. This scenario has changed radically. Providing next-generation services requires interaction with a complex, geographically dispersed supply chain of distribution channels, network vendors, business support vendors, customer premises equipment (CPE) vendors and, eventually, out-of-industry players such as utility companies and merchandisers.
The new-age business model looks more like a merchandising model than a telecommunications model.
Yes, the days of simply tracking the duration of a call, the time of day it is placed, the identity and locations of the people involved in the call and the path it takes on a circuit are numbered. Service providers supporting next-generation services will need billing systems capable of capturing a wide range of data elements previously unheard of, such as quality of service (QoS), and performing multiparty interconnection accounting between carriers such as CLECs and Internet service providers (ISPs).
Mark McCormack is executive president of billing and customer care with Intertech Management Group, Chesterfield, Mo. He can be reached at markm@intertech-ns.com.
