The rush is on to deliver next-generation triple-play services to the consumer market and the competitive landscape among companies delivering these broadband services, including voice, video, and mobile wireless, is fierce. For good reason. The U.S. market for bundled convergent services is forecasted to double in less than four years. The payoff could be huge for those communications providers successful in teaming together to add to their core service offerings. However, these partnerships formed with great expectation of speed to market and revenue growth in the boardrooms may eventually be doomed by poor execution in the OSS and billing back offices. In this contest, advantages may come to the fastest, and the most innovative, but survival will be to the fittest. However, the service provider partners who are the best at managing and assuring the performance of their inter-dependant delivery, provisioning, and billing operations will win the day. This is best accomplished through
the use of an independent, accurate, Managed Business Assurance solution.
Managed Business Assurance (MBA) is a new model, but one rooted and proceeded in the telecom industry by programs addressing cost management and Revenue Assurance. These disciplines grew up inside large and small telecommunication carriers during the volatile 90ï¿½s. These companies learned ï¿½ often after years of unnecessary revenue loss and unchecked operating costs ï¿½ the importance of ensuring monthly bills sent to their customers, and paid to their vendors were accurate. Similarly, MBA is about creating and maintaining effective controls over operational fundamentals in the drive to deliver next-generation triple-play services.
Why is a Management Business Assurance Program Necessary?
Perhaps your company has joined with other service providers to package and deliver new broadband-based bundle offerings. The partnering agreements are short and sweet ï¿½ youï¿½re in business to serve, rapidly meeting consumer demands for the latest voice, high-speed data, and video services. What is there to consider? Hardware and software have been tested; delivery platforms have been trialed to verify interoperability. Promotions and marketing are there, and so is the predicted customer demand. Your subscriber base immediately begins growing at double digit percentages every month.
As with most new service offerings, the first billing and collection cycles bring on a whole host of operational issues to resolve. In this scenario, however, you have more than one company involved, and commission payments and fees to consider. What does that partner agreement say about how many billing arrangements that are based on the services a customer has on his or her bill? How many different discount programs do you jointly offer? Is it tiered pricing, a straight flat fee, or usage-based pricing? Do your partners issue bills to subscribers? What are the details of those Service Level Agreements you signed up for in this arrangement?
When two, three, or more companies combine to provide pieces of convergent service offerings, a significant number of invoicing and settlement can be expected. Additionally, as you push forward with your market roll-out plans, and order volumes grow, increasingly, you will probably be faced with a range of unexpected order management, service activation, and end-customer billing discrepancies between you and your partners. These OSS issues will often negatively affect customer service, operating costs, or revenue performance. For example, you and your partners may each allow for a variety of definitions for inactive versus active accounts within your respective interdependent OSS and billing systems.
Well, similar but not quite the same could mean mounting dispute accruals and uncollectibles for partnering companies over time. What were the dispute provisions in the contract again?
The terms ï¿½ or the omission of needed terms ï¿½ in your teaming agreements will sooner or later affect all aspects of the partnership relationship. If the expectations are not clearly defined here, they certainly will not be understood in and among the operations and IT groups. Do the interfacing OSSs all have a common view and identifier for your subscriber? Maybe an unexpected message from your partnerï¿½s upstream process is causing ordering fallout on your side ï¿½ not a big deal for you perhaps, but what about the fact that because your partner never gets a status message back? They think the subscriber never started the service and they never bill them. Donï¿½t wait for the year-end audit to find out you have to restate your subscriber base ï¿½ do you want to explain that on the earnings call?
How to Initiate and Build an MBA Program
So you see the need and benefits of an MBA program, but are unsure how to get started. The following are high-level steps and considerations:
1. Choosing Candidate Products and Partner Relationships ï¿½ There is no formula to use in identifying new product offering or company teaming contracts for MBA. However, during the rollout of new bundled convergent services, there maybe leading indicators of improvements that can achieved in the partnering companies operational functioning. Are you inexplicably missing revenue collections forecasts? Are you experiencing unpredictable installation intervals? Are there inter-company invoicing disputes that are beginning to pop up? These conditions in complicated operating environments wonï¿½t often just work themselves out without sacrificing a disproportionate amount of time, market share, or money. The better course of action is to start building the business case for an MBA program.
2. Building Stake Holder Buy-In ï¿½ Too often, ambitious business plans get funding, executive approval, and start deployment, without first securing the support from those who ultimately will make the initiative work. These programs can be justified and well thought out, but lack the support from organizations and individuals important to even get initial momentum going. Implementation of an MBA program is no different. Without key work group and stakeholder buy-in, the program will stall and fail.
For MBA of a new convergent service offering, the core stakeholders are typically in Product Management, Finance, and Strategic Alliances, or those in charge of business partnerships. Another important stakeholder group, although sometimes overlooked, is IT. For an MBA program to effectively operate, access to enterprise data is paramount, and bringing IT on board early on in the project planning stages will only help accelerate and smooth out the implementation.
3. Organizing the Data, Business Rules, and Analysis Reporting ï¿½ The data sets that will need to be collected by IT should correspond to critical control points and functional exchanges through the inter-company operational processes. Provisioning field values, billing transactions, invoice element charges, and inventory assignments, are a few examples of data used in measuring the integrity of the end-to-end process. Pulling together and rationalizing these sometimes diverse sources is where business rules come into play. Business rules attach the logic needed to translate, relate, validate and analyze these often disparate data sources. When these rules are properly configured, and associated analysis routines are effectively designed, tested, and built, the result can be a valuable portal into the back office operations Itï¿½s here where many of the anomalies, transparencies, and errors producing downstream performance issues can be uncovered.
Acquiring the source data, applying rules, and conducting complex auditing are the core components of a data assurance process, yet a properly designed, high-functioning MBA program for a bundled service offering will also enable partner participant groups to monitor, benchmark, and improve operational performance and bill quality. A robust discrepancy reporting and analysis component of an MBA should drive action on specific issues and gaps of the partnership that need attention. Additionally, MBA reporting will save considerable partner time and money by providing regular, accurate, and objective measurements for partner invoicing and settlements, and to administer contract compliance.
4. Program for Partner Collaboration and Continuous Improvement ï¿½ Invoice Disputes and executive escalations to address open issues donï¿½t typically facilitate constructive ongoing teamwork between companies. Alternatively, an MBA program with a shared platform, objective tracking, and performance reporting helps partnersï¿½ better work together and grasp their responsibilities important to the teamï¿½s success. . Also, the OSS and billing discrepancies captured, reported, and reconciled within MBA provide a source of knowledge for future partnership arrangements.
As telecom, Internet, cable, and technology companies join forces to deliver broadband services to consumers, mutual standards for operational execution and OSS/Billing quality control cannot be after-thoughts, or challenges left to be worked out over time. There are too many obstacles associated with inter-dependant processes and systems to be identified and managed. It is also not worth risking lost revenues, less than best in class service levels, and mounting invoice disputes. A managed business assurance program is essential to building a strong partnership that performs in both the back office and the marketplace. An MBA program will give you insight and a common platform for you and your partners to improve operational efficiency and financials. It will help you build in better controls and requirements into future partnerships by helping build best practices that can be built into those future contractual commitments. An MBA program developed and implemented correctly, will drive the success of
the partnership that was expected when it was formed in the boardroom. IT
Tom Nolting is senior director, Financial Assurance at Vertek Corporation. For more information, please visit the company online at www.vertek.com.
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