The telecom industry has heard a lot more than it has actually seen of online billing.
By some estimates, only about 4 million consumers pay bills of any sort online. And telecom is just ahead of government and health care in using e-commerce internally, notes Kevin Elmore, president and CEO of billing vendor Cygent Inc. (www.cygent.com).
Many in the telecom industry believe the electronic bill presentment and payment (EBPP) wagons not only are turning the corner, but are starting to pick up speed.
"The momentum is certainly growing," says Read Ziegler, chief marketing officer of Derivion Corp. (www.derivion.com), which hosts its inetBiller EBPP service for small- to medium-tier billers in telecommunications, cable, utility, insurance and financial services. "It's quickly going from trickle to a tidal wave demand."
Some carriers see web-based billing as a differentiator. "The ability to provide simplified and comprehensive Internet billing services gives us a real competitive advantage," says Hans Kohler, manager of customer service for Hargray Communications Group (www.hargraywireless.com), which provides telecommunications services to the South Carolina low country and coastal empire using Derivion's product.
"It's branding and it's differentiated service," says Derrick Van Grol, vice president-marketing and sales for Info Directions Inc. (www.infodirections.com), which sells a product called OnlineBill that works with its existing billing and customer care product, CostGuard. "As more people get into shopping online, our EBP solution lets our customers put their own name on the bill as well as the home page [for more customization]."
Van Grol says MCI WorldCom Inc. (www.wcom.com) has a "hot" online bill payment and presentment site, but that this technology enables smaller carriers to offer that same level of service.
In addition to being a differentiator, EBPP can also be a margin enhancer, taking the paper cost from the business.
According to Info Directions, it typically costs 65 cents to $1 per bill to create and send hard-copy bills, and 20 cents to 35 cents for EBPP. Other costs for EBPP would include a T1, a router and an NT server, for a startup cost of about $25,000, according to the company.
"The other savings is ease of use. We're putting some of the customer care out to the end user," adds Donald Culeton, president and general manager of Info Directions.
"The economics [of EBPP] are so compelling," says Cygent's Elmore. "What we need is a few good case studies."
To date, according to Derivion materials, the much-hyped EBPP has faced the "chicken and egg" problem. Consumers are not going to adopt it until Internet billing becomes convenient, Derivion notes, and Internet billing will not be convenient until a large number of billing organizations begin offering Internet billing options.
According to a recent study by The Yankee Group (www.yankeegroup.com), which polled chief information officers (CIOs) at the top 25 CLECs about operations support issues, 22 percent of the respondents said their company had an existing web-based customer interface, 32 percent expect to launch a web project in 2000 and 14 percent had no such plans.
Among the CLECs offering online billing services are Advanced TelCom Group Inc. (www.callatg.com), which recently launched the capability to allow customers to order, receive and pay bills online; Choice One Communications (www.choiceonecom.com), which this quarter will roll out web-enabled bill presentment; and Focal Communications Corp. (www.focal.com), which offers online bill presentment through its internally developed Invoice Domain software (see story "Taking a Different Path," here).
Robert Rich, senior vice president-telecommunications research and consulting with The Yankee Group, believes the recently launched AT&T Business Network (www.att.com) will push even more CLECs to move toward web interfaces. AT&T Business Network targets small and medium-sized businesses, a group that CLECs are increasingly focusing on, and the service is all dependent upon a series of web-based tools, according to Rich.
Drivers
Other drivers of web-based billing, and potential offshoots of that such as online customer care and provisioning, include systems that allow for lower cost of entry, better customer interfaces, and faster and better integration with the rest of a carrier's OSS systems, say web-based billing software and services providers.
Lower cost of entry is the big differentiator of a web-based billing and customer care solution from Martin Dawes Ltd. (www.dise.com), says the U.K.-based company, which just opened for business in the United States. The company sells its software to carriers, which can manage it themselves, or will sell it as an outsourced service.
"A lot of people are announcing product, but a lot less are actually presenting the service," says Gary Steen, head of product strategy at the company.
The slow take-up of web-enabled billing and customer care can be attributed to all the additional work--such as developing middleware to tie the web-based billing and customer care systems to other backend systems, says Steen. If the billing and customer care systems are separate, the carrier has to invest in separate hardware to host that software and separate staffs to manage them, he adds.
"Our main customer care and billing program is one system, on one platform, but covers enterprise-wide software applications," says Steen. The company's DISE system tracks all customer information--such as credit records, hardware and services ordered--and holds it in one database, rather than separate databases for separate items, he says.
Tony Wilson, vice president of operations, adds that DISE is also a very scalable system, with the ability to support 5 million subscribers simultaneously while competitors' systems top out at around 3 million.
"Once a system becomes more complex, it can't support as many customers and recovery becomes tougher," says Wilson.
The big differentiator for Info Directions' OnlineBill, meanwhile, is that it's integrated with the company's CostGuard billing product and works only with that, says Culeton. "It lets us send intelligent information to the OnlineBill database and to then look at that information and present it to the user. We don't have to parse some online text stream. We can do real-time access of user and access patterns, to have a certain amount of ability where the customer can make changes to his address or to open problems and have that information."
OnlineBill presents the customer invoice with the call detail and has a sort-and-filter capability to search for such things as the 10 most frequently called numbers, for example.
A Familiar Face
Better user interfaces are another way vendors are trying to make web-based billing more attractive.
Intuit Inc. (www.intuit.com), maker of the popular personal finance software Quicken, is partnering with various billing companies to create links between its Quicken products and their web-based billing solutions. Derivion is among the EBPP vendors with which Intuit has partnered to give Quicken and Quicken.com its online billing software, an EBPP back end.
"What we're trying to do is drive consumer demand," says Ziegler. "At Derivion we're trying to not only enable the billers, but also provide multiple choices for customers on where they want to pay their bills."
He adds that between 25 million and 30 million people use Quicken.
"Millions of consumers trust Intuit for a wide range of personal finance services, so it's only natural they would want to conduct online bill transactions through these platforms as well," says Greg Rable, Derivion CEO, in a press release. "The more convenient it is to pay bills online, whether directly through a biller's website or through established portals like Quicken.com and Quicken, the sooner large numbers of consumers will make it the standard for receiving and paying all bills. We expect that making bill content available to Intuit's customers will energize a very important audience of consumers."
Business-to-Business EBPP
However, Cygent's Elmore says the first line of attack for EBPP should be business-to-business rather than residential.
For example, Cygent software is enabling CLEC 2nd Century Communications Inc. (www.2c2.com) to offer web-based billing to its reseller channel. That was rolled out in December.
In November, Cygent partnered with Vitria Technology Inc. (www.vitria.com) to enable broadband service providers and their partners to build Internet portals and resell DSL over the web. Cygent delivers the eBusiness software solution for the creation of a provider's retail DSL portal. That's integrated with Vitria's BusinessWare for DSL, which offers flow-through DSL provisioning.
As a result, Vitria customers including Covad Communications (www.covad.com), ICG Communications Inc. (www.icgcomm.com) and North-Point Communications Inc. (www.northpointcom.com) could resell their broadband services through other providers that want to incorporate DSL into their convergent product bundles. These data CLECs' carrier customers could manage their DSL or bundled communications services from their own custom web portals for the first time.
"The Cygent-Vitria alliance provides a web-based, self-service solution which will enable resellers to simplify the end-user ordering process and help to further accelerate the proliferation of broadband services in the consumer space," says Rich Wong, vice president of marketing for Covad, in a press release. "Given that Vitria's BusinessWare for DSL is compliant with Covad's Xlink API platform, we feel confident that this solution will help resellers to more readily place Covad's broadband services in the hands of consumers across the country."
NorthPoint doesn't offer web-based billing, customer care or provisioning yet, says Chairman and CEO Michael Malaga. (The company just recently rolled out its eConnect service, based on Vitria technology, which allows ISPs to order NorthPoint DSL in their own OSSs and have flow-through provisioning to the NorthPoint OSS.) However, Malaga says there's clearly a gravitation to more web-based tools, and that NorthPoint, too, is gravitating in that direction.
"We want to, in the end, allow the end user to provision his own circuit," he says.
First, carriers need the network management software from network elements to interface with the back office. "That's a key piece of glueware that's missing. That's at least a year away," he says.
CLEC Focal, meanwhile, has developed its own software to enable value-added resellers (VARs) and ISPs that resell its services to get call detail records (CDRs) for their accounts via the Internet. (For more on Focal's homegrown OSS software effort, see story here.)
