Billing And CRM: Obstacles Or Enablers For Communications Service Providers?

BY MICHAEL COUTURE

Billing and customer relationship management (CRM) platforms continue to grow in importance for communications service providers (CSP) as a result of both positive and negative trends in the telecommunications industry. The fundamentals of the telecommunications market have changed. It is no longer about acquiring customers at all costs or focusing solely on driving top-line growth. Nor is it about far-fetched business models. Today, telecommunications is about getting back to good business basics -- targeting the right customers with the right offers; treating valued customers well, so they'll buy more services from you; and being efficient about the way you do it all. The move to next-generation services has not ceased and remains critical, but the focus has shifted to driving profitable growth, increasing customer loyalty, and reducing costs. In this context, billing and CRM can act as either an obstacle or an enabler.

So if the landscape for communications providers has changed dramatically, what does this mean to billing and CRM? Increasingly, this means that systems and their impact on the business are moving out from the back-office and into the limelight. Billing and CRM strategy is increasingly tied to corporate strategy. References to terms such as billing, CRM, and OSS are becoming more evident in the quarterly earnings calls of major telecommunications services providers in North America and Europe.

All this being stated, there are a variety of vendors in the marketplace offering a wide range of services and solutions to help the CSP meet their system needs. The maze of vendors can be confusing and it is vital for the carrier to understand the differences in systems and philosophy, of which there are many. Not all systems are created equal, not to mention the complexities of making them work -- the delivery.

This article will look at the current and evolving CSP landscape as it pertains to billing and CRM systems, while highlighting and underscoring the crucial characteristics and elements a CSP must seek out in selecting a vendor to provide these complex but indispensable systems that can enable them to meet their business vision.

Pre-Integration For Rapid Deployment And Lower Cost Of Ownership
With the focus on customer retention and cost reduction, there is no more important issue right now than smooth and effective integration -- specifically the integration of CRM and billing.

The advantages of true integrated CRM and billing are many. Integrated CRM allows the CSP to efficiently and accurately sell to and service customers. With multiple contact channels -- such as the Internet and mobile devices -- through which subscribers can contact their CSP to either order, change, or cancel services, or analyze or question a bill, it is essential that all systems are "talking" to each other seamlessly. New broadband access also means more complex service fulfillment, particularly in wireline services. These systems must be in sync, providing the customer service representative a single view of the customer and order status across all touch points, be it the Web, the mobile phone or the good old landline phone. Whereas billing, customer care, and order management were once distinct silos, the ability for these systems to communicate in real time is critical to maintaining subscriber satisfaction. Coherent customer information is also critical for analyzing customer behavior to proactively avoid churn and deliver more efficient marketing campaigns.

A truly integrated CRM platform will also reduce costly errors, ensure accurate and timely billing, and enable proactive trouble support and service level agreement (SLA) management. It allows the CSP to more quickly introduce and roll out new products. In addition, enlisting the services of a single vendor for billing and CRM speed deployment, reduces risk and lower their total cost of system ownership, as they can rely on product upgrades, service, and support from a single source with a unified vision and roadmap. CSPs should therefore consider a vendor who specializes in the "factory integration" of these functions, and whose offerings are developed on an open architecture enabling new modules to integrate with an incumbent or third party system.

Another important type of integration that is emerging in the telco systems environment is the convergence of prepaid and postpaid businesses. Prepaid and postpaid have traditionally lived separate lives in the typical CSP. While prepaid has enjoyed tremendous success in driving penetration in mobile, it has fallen out of favor for many CSPs, as they look to drive up average revenue per user (ARPU) and reduce churn -- two negative traits of typical prepaid subscribers. These separate lives have also meant separate systems, price plans, and even brands; however, as next generation services slowly make their way to the market and CSPs look to improve operational efficiency, a marriage of prepaid and postpaid is on the horizon.

Prepaid and postpaid convergence enables new, innovative offers to be developed. For example, a family where a child wishes to subscribe to a new video game service on a wireless phone may want to prepay to ensure budget control, while at the same time continuing traditional phone service on a postpaid basis. The pre/postpaid convergent environment allows the CSP to drive new services, advise of charges prior to purchase, provide cross-product incentives, enhance pre-paid customer loyalty, and minimize system costs through consolidation. To truly meet this growing need and reap the benefits, the vendor must be able to provide a truly converged environment (single customer database and single product catalog), where prepaid is simply a payment channel for any given service or subscriber and billing can interact in real-time with subscribers, networks, devices and partners.

Strategic Options For The Future
CSPs are rightfully nervous about the prospect of a major software or platform overhaul to enable these services. The risks associated with such a change can be daunting in any economic environment. If not managed correctly, the inherent complexities of implementation, integration, and conversion can bloat budgets and cause projects to fall short on delivering the promised business value. It is also recognized, however, that the business value can be enormous.

The drive towards next-generation services has hit a bit of a speed bump, no doubt about that. But there is also little doubt that these services are coming, using handheld wireless devices and broadband pipes into the home. And as these services proliferate and grow in popularity, so will the increased complexity of rating, billing, mediation, and settling. A service from which revenue cannot be collected is a worthless service. In the same vein, a billing and CRM platform that cannot manage the growth of data services, rapid service deployment, prepaid and post paid integration, content rating, and the partner relationship management aspects of the next-generation universe and the general increased complexity is also of no value. The need for carrier-grade support doesn't go away -- strong audit and control, revenue assurance, and proven scalability remain key.

Consequently, CSPs should seek out vendors with strengths in voice and next-generation service support, who can offer a gradual, step-by-step upgrade option. This will allow the CSP to match investment with near-term pay-off (for example, to enable support for the new charging models associated with 2.5G or DSL content), and can help avoid the usual risks associated with major systems replacements while leveraging their investments and moving towards a new comprehensive strategic platform over time.

Other considerations could include the ability of the vendor to provide a packaged product (which could reduce total cost of ownership), the ability to tailor the software for the CSPs specific needs (which could provide a competitive advantage), and the ability of the vendor to provide outsourcing services (which could help to control operating costs). Furthermore, CSPs should consider whether the vendor provides other adjunct software that they may add-on later, if desired. Does the chosen platform support any service or does the CSP need to acquire other software products to support other services or lines of business? Does the vendor invest their R&D on one platform or spread investment across many? Is this a strategic platform for the vendor or one on the periphery?

CSPs should seek out a vendor that provides the maximum strategic options for the future, focuses investment on a single platform, and enables the CSP to leverage investments as they go forward, no matter what the direction.

Finally, Look For Proven Delivery
While much focus is placed on the software vendors' products and functional capabilities, what is often overlooked is the "magic" of implementation and integration of the systems into the CSP's environment. Given the inherent risks and the business climate today, CSPs are becoming more aware of the importance of finding a vendor that can deliver.

Today, CSPs are looking for stability, complete accountability, a proven track record, and depth of experience in the industry and with the chosen software -- a vendor that demonstrates that they can deliver and that they have done so successfully for many years.

We've already seen billing and CRM functions grow exponentially in importance. In the coming years the ability for CSPs to meet the strategic imperatives of the industry -- profitable growth, customer loyalty, and reduced costs -- will be heavily reliant on the capabilities of these systems. As a result, the billing and CRM platform will serve as the main competitive differentiator for CSPs in a brutally competitive environment. With a world-class, strategic system from a leading solutions provider with proven delivery capabilities, CSPs can succeed.

Michael Couture is vice president, product marketing of Amdocs. Amdocs is a leading provider of billing and CRM to the communications industry.