Billing For Hosted Services
The
ASP model is making a huge splash in the communications market, and many
companies in this space are already supporting next-generation networks
with new and enhanced services. In fact, Technology Marketing Corporation
sees so much promise in this space that we have decided to launch a new
publication to keep up with all the news, and it will be called Communications
ASP (look for our premiere issue in January of 2001).
I recently got to question Oren Glanz, president and CEO of
communications ASP TeleKnowledge, Inc., about this booming area and how it
will impact Internet telephony. His responses appear below.
-- Laura Guevin
LG: Why did you decide to embrace an ASP model for your
billing and customer care solution?
OG: Like any emerging market, the ASP arena requires business
infrastructure solutions that enable new players to get into business
quickly with minimal capital investment. TeleKnowledge offers Total-e --
our revolutionary billing, customer care, and e-partner revenue management
solution to ASPs through a variety of pricing and delivery options,
including a "pay-as-you-grow" pricing model. We expect to expand
our ASP solution set by delivering Total-e to clients via the ASP model by
the end of the year. Our main edge over our competitors using the ASP
delivery model is our flexible "plug-and-play" architecture that
allows us to rapidly introduce any service and to customize the systems to
fit the needs of specific customers.
LG: As a member of the ASP Industry Consortium, where do you
see this business model heading for the communications industry? How does
Internet telephony fit into this picture?
OG: We see a trend of telecommunications service providers
moving toward the "portal" model. A good example is a
TeleKnowledge customer -- a rich communications provider that offers
streaming TV, video conferencing, voice over IP, and video-on-demand
through a single browser-based user interface. This trend has not escaped
major communication players like WinStar, Qwest, Allegiance, and KPMG that
are also offering applications and value-added services over their network
infrastructures. These companies all see portal-based services increasing
their "share of customer wallet."
We also see new players surfacing that can be broadly classified as
business communications ASPs. The introduction of new technologies like
softswitches makes it possible today to offer customers direct access to
hosted communication networks and a set of value-added applications --
like interactive voice response (IVR), enhanced call routing, and CTI
integration -- that allow the customer to remotely configure, personalize,
and provision a variety of telecommunications services. This notion is
exciting not only as an alternative to investing in local PBX
infrastructure, but also because of the scalability it provides the
customer and the rich browser-enabled functionality that it brings to the
end user (like identifying missed, inbound, or outbound calls with
click-to-call functionality) -- this applies both to traditional and IP
telephony.
From another angle, we see a growing trend of companies offering
integrated Operating Support Systems (OSS) suites to communications
providers through the ASP model. OSS solutions, similar to ERP and CRM
applications that are already offered via ASPs, require a lot of
integration and customization work. I think it's still early to determine
how successful this model is going to be.
LG: Do you think more companies are going to switch over to a
converged service/solution model for offering VoIP services?
OG: Yes. Although the majority of communications industry
revenues still come from voice services, voice service providers are
facing shrinking revenues. Service providers are therefore looking to
broaden their portfolios with broadband/IP technologies. Service providers
of all forms are rapidly upgrading their infrastructure to deliver a new
generation of services -- multimedia over IP will play a major role in
that.
For a network service provider, the revenue increases from supporting
portal operations can be quite dramatic. It is estimated that for every
one dollar in hosting revenue, the network provider gets from four dollars
to seven dollars in network revenue. That is one reason why many firms
will attempt to operate at multiple levels of the value chain.
TeleKnowledge works very closely with our OEM partner, Unisphere
Solutions, to enable service providers to offer next-generation services.
Unisphere Solutions offers a platform for converged broadband networks and
traditional voice that allows providers to maximize their revenue
opportunities. Our billing technology is embedded into their OSS,
providing service initiation, billing, and customer care functionality.
Convergence is, however, just the beginning. Unisphere Solutions also
offers "service selection portal" technology that allows
customers to select and activate a wide range of broadband services
directly through a browser-enabled interface.
LG: How is the role of billing and customer care changing as
networks evolve to offer converged services?
OG: We see changes in three main areas:
- The need to quickly introduce and create the necessary support for
new services. At TeleKnowledge we created Total-e with this kind of
multi-service environment in mind. Using a "plug-and-play"
design based on object-oriented methodologies, we are able to build
business support for new types of services in a matter of days, and
eventually allow the customer to create any new service offerings
through a user-friendly interface in a matter of minutes. Traditional
telecommunications/-ISP billing systems today cannot compete with such
flexibility.
- The need to support unlimited numbers and types of e-partnerships.
We see a major trend today of providers forming strategic partnerships
for the purpose of delivering a service to end customers, to broaden
the service portfolio and reach new markets with channel partners. The
challenge is to manage the number and diversity of these agreements.
- The move towards value-based billing methods. In a converged world,
there is a need to support a variety of service-specific pricing
parameters. Moreover, the richness of value-added content-based
services offered today (such as video on demand and stock quotes to
WAP-based devices) require a new approach -- value-based billing --
which takes into account customers' definitions of value, measured in
terms such as quality of service (QoS), timeliness (when and how the
service is provided), and the relevance to a specific customer.
LG: What kinds of benefits will this bring to business
customers? End users?
OG: Consolidation brings to the customer the ease of managing
billing and customer care services through one point of contact. Moreover,
in the race to retain customers and build customer loyalty, service
providers must offer multi-service packages that cut the total cost for
the customer.
LG: What new challenges do ASPs and next-gen service
providers face in billing and customer care?
OG: The ASP market is still in a relatively young stage where
supply might be affected more by Web-readiness of applications, rather
than end customers' demands. With ASPs debating best-of-breed delivery
versus integrated models, finding the right set of applications and right
mix of OSS infrastructure is a major challenge -- it requires a flexible
and dynamic billing and customer care solution that can accommodate
changes across every aspect of the business: Addition of new services,
modification of existing ones, application of new pricing strategies,
creation of revenue sharing models, monitoring and evaluating QoS, and
more.
In the ASP arena, alongside billing, there is a real need for a
comprehensive infrastructure to support partner relationships. Such
relationships include: Private and co-branding services for resellers,
virtual/multi-provider operations, supporting revenue sharing/commission
agreements, and enabling value-added services for partners (bill
production, virtual CSR, and the like).
With the move toward mission-critical applications, the challenge turns
to addressing service level agreements (SLAs), which becomes crucial to
delivering services at the levels customers are willing and able to pay.
Billing systems must interface with QoS monitoring systems in order to
determine whether or not the SLA has been violated, allowing service
providers to issue refunds to customers if and when required.
LG: How will solutions like TeleKnowledge's help bring VoIP
to the forefront as a next-gen service offering?
OG: TeleKnowledge develops and markets billing infrastructure
solutions -- we enable providers to price different levels of VoIP
offerings based on customer definitions of value, thus making these
services more accessible and attractive.
TeleKnowledge was the first to introduce the notion of value-based
billing to the market. With the addition of qualitative measures, such as
timeliness, relevance, and quality, value-based pricing is a step forward
compared to the quantitative, cost-recovery approach of usage-based
billing. Using value-based metrics, a provider may charge customers less
for a private IP call than for a business IP call with higher guaranteed
QoS, or charge video-on-demand customers more for viewing current releases
versus titles available for rental in video stores. Another recent example
is pricing a WAP-user stock quote service differently based on a set of
preferences defined daily by the customer -- such as number of sources
(quantity), transmission frequency (timeliness), and personalized content
(relevance).
Moreover, as the market grows more complex, service providers are
teaming up to deliver joint offerings. Total-e empowers IP telephony
providers to create and manage unlimited numbers of new e-partnerships
with ISPs, VARs, and portals, and enables the creation of private and
co-branding agreements. It also supports revenue-based terms based on
commissions and other revenue-driven concepts.
LG: What kind of challenges does VoIP face in this regard?
OG: VoIP should be able to deliver differentiated services such
as call center and PABX over the Net, QoS for VoIP, and other diverse
applications. Simple VoIP is no longer a differentiator.
The billing challenge is how to incorporate the qualitative measures
into the equation. The billing system may receive a large number of
quantitative measures from QoS monitoring solutions, but still has to be
able to determine the business meaning of these numbers -- from a pricing
standpoint. For example, a single instance of decline in QoS may or may
not constitute a break of phone conversation and may or may not be
considered a violation of service level agreement. The billing system
needs to be designed to figure that out accurately and quickly. Another
challenge is the ability to collect and consolidate network usage
information with customer database information.
On the partner side, the challenge is how to capture and settle a large
number of partnerships each with different business rules, combined with
customer billing requirements.
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