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Billing in the Service Provider World

By: Richard “Zippy” Grigonis

Call them carriers, service providers or network operators, today’s new age telco still seems to forget that they’re really in the billing business, and that the hum-drum activity of invoicing customers and collecting payments is basically what keeps them financially afloat. The seemingly simple activity of billing has become a major challenge in recent years, as the world’s networks have evolved into a complex pastiche of packet-based and TDM infrastructures running various “standard” protocols

In such an environment, reinventing the wheel is not uncommon. Colin Orviss, Senior Vice President of Patni Computer Systems (News - Alert)’ Telecoms Consulting Division, says, “In the past, members of the industry used to know everything about what was going on and they could specify exactly what they wanted, because they knew what they wanted, and could either create what they needed themselves or else they could hire someone to come and build it for them. Now, however, with all of the changes going on with technologies, the unique demands of customers and so forth, as an industry we don’t know what we want anymore. Everyone needs partners who can work with them to adapt their needs with their experiences to come up with an optimized solution, as opposed to just, ‘You’re the customer. You know what you want. Tell me what to do and I’ll go do it.’ One needs a more subtle approach these days. There was also a misconception in the industry, which touched the billing space in particular, involving the need and use of those ‘secret sauce’ solutions which can be extremely complex, especially in the fixed-line world, and extremely challenging in terms of getting stuff that works. In reality there’s a high percentage of what I would call ‘billing failures’ around the world, which are programs that just don’t deliver what’s expected of them. Much of this occurs because if every operator perceives that they are unique, and what they’re doing is really ultra special, then their way of doing things is what needs to be interpreted into the billing or CRM system or the way they go and decompose offerings and get them delivered. This is why billing per se has become an extremely complex, expensive and challenging subject area for most operators.”

Orviss’ company, Patni Computer Systems Ltd. is a major global provider of Information Technology services and business solutions in selected horizontal and vertical segments. Patni doesn’t really come to customers with a rigid platform that is plugged in and cannot be changed. What they do provide is a replicable model that is taken to each customer (or partner, as they call them) and is finished depending on its unique needs. With its expertise in implementing and enhancing billing systems, Patni enables its customers to reclaim accountability via tighter integration across applications and to lower the cost of bill presentment.

Taking It All in Stride

One company sufficiently nimble to handle today’s wide range of billing challenges is Profitec (News - Alert) Billing Solutions. Profitec provides sophisticated billing services to local telephone companies, long distance carriers, cable providers, utilities, ISPs, wireless providers and many others. Aside from conventional service bureau processing, in-house customer service, and database administration, they also offer network provisioning, credit and collections, inbound sales and order entry, and telemarketing. they can also use components of these service to devise a custom turnkey solution if a telco so chooses.

Profitec's OmniSuite is one of the most advanced billing systems that can deal with a huge assortment of resale products. In particular, Profitec’s sophisticated OMNIBILL module takes an expansive approach to resale billing, as it is imbued with Profitec’s experience in supporting resellers in local and long distance, cellular and paging, multiple dwelling unit, CATV, IP telephony, broadband, campus resale and other ICPs. Overall, OmniSuite is a potent combination of web and server-based applications. Centered on the core OmniBill OSS billing system front end, the OmniSuite components all interact with a single SQL database, enabling central administration of all elements. Profitec conducts all engineering and development activities in -house so their resulting product is a truly single system rather than a disjointed collection of best of breed solutions that would require expensive system integration. The development of Profitec’s software has been informed by the extensive work they’ve done with hundreds of clients, many of which happen to attend Profitec’s semi-annual users group. OmniBill is available as a hosted or on-site OSS.

Jack of All Trades

Openet (News - Alert) provides network-edge solutions include the FusionWorks event-processing and transaction-management software platform, which enables service providers to both rapidly introduce new services and cost-effectively manage existing ones. Openet’s solutions span multiple service provider offerings and can deliver transactional intelligence to Tier 1 customers across across complex, converged network environments.

Mike Manzo, Chief Marketing Officer at Openet, says, “Our play in the billing market is that we build an OCS [Online Charging System] – a charging, rating and balance management combined system, loosely specified in the IMS [IP Multimedia Subsystem (News - Alert)] charging standards, but our product is broader than the standards themselves in terms of supported use cases and the fact that is supports voice as well as data, which is not specifically part of the standard itself. In any case, we see those control components’ real-time billing aspects becoming more strategic to operators in the future because we see them deploying a myriad of usage scenarios that involve realtime billing transactions versus back office. So I guess perhaps the first trend I clearly see is a recognition that aspects of billing need to move closer to the network and need to be come more real-time or dynamic in nature. That’s because the function being performed by billing, whether it’s the management of an account structure or the management of a bundle or any type of balance for a user or even the simple process of rating and determining authorization or access to services based on subscriber profile information, those are all very much real-time functions which historically, in one capacity or another, would have been billing-related.”

“So, our view of the world is that billing systems five years from now will be radically different than they are today,” says Manzo. “Many of the critical functions of billing, not the least of which is rating, are moving closer to the network such that the traditional billing system will lose much of its functionality to an OCS-like function, a combined charging/rating/balance management function that will be exceedingly flexible and high-scale. It will be able to do everything from managing the account structures to managing subscriber balances of any type. That could be a prepaid balance, but it could also be bundles they acquire. It could be loyalty programs or loyalty-related balances that acquire ‘points’ or usage tracked, or any type of mechanism for rewarding loyalty right down to the simple charging and rating functions themselves for everything from prepaid transactions to imposing spending limits, to dealing with tier grading plans. The trend is that billing becomes invoicing, payment and presentment. Most other billing functions move closer to the network and become transactional in nature. Insomuch as deploying what I just described enables operators to create new business models – which it tends to do – there is a clearer recognition of payback in the form of new revenue streams or increased profitability. So it’s partly about cost reduction, but it’s also partly about enabling the generation of revenue that didn’t necessarily exist previously.”

“That brings me to the other trend that we see,” says Manzo, “which is that the OCS capabilities are being deployed as a tightly integrated solution in conjunction with policy management. I should qualify what I mean by policy management, because it’s a term that has had many meanings over the years. Today’s policy management is a transactional element in the network that controls subscriber access to network resources. There are dynamic allocation of four aspects of network resources: First, the speed of the network; second, the ‘fair usage’ or volume of usage allowed by a subscriber over a period of time; third, the ability to use certain or protocols or traffic types; and fourth, the Quality of Service [QoS] and prioritization of that traffic for that user relative to other people’s traffic.

“Stepping back for a moment,” says Manzo, “one of the big trends that’s happening with the operators right now is an increasing recognition that there’s a place they fit in the value chain in that, as they look to avoid disintermediation and grow revenue, rather than looking to expand to segments of the value chain where they are unlikely to be a leader – which is building applications and content or even serving them beyond basic access services and Voice – there’s recognition that the real issue here is that when you make the statement that the operators are worried about being a ‘dumb pipe’, it’s not the word ‘pipe’ that’s the problem. It’s the word ‘dumb’. So what they’re trying to do is to increase the ‘intelligence’ of the network which becomes a billable asset. You can take aspects of control on the network and monetize them. Can a subscriber get access to certain network resources in certain ways? How are those network resources packaged either in service tiers and service passes, time-based access or an ‘a la carte monthly recurring charge or even consumption-based billing such that the user is paying for the amount of access or network resource that they’re actually using in a fair way. That means having these real-time billing capabilities, but it also means being able to actually control on a subscriber-by-subscriber basis how those resources get allocated. The tight integration of those two capabilities – the OCS that has charging, rating and billing put together, combined with the policy manager, is where the really ‘secret sauce’ lies.”

“So there are two trends running in tandem,” says Manzo. “One is that billing is becoming more real-time and moving closer to the network and that billing is getting tightly coupled with an ability to control what’s happening on the network and be able to bill for that control in the form of new pricing models or pricing plans, or business models for the operator.”

Mind Your 4 P’s

Highdeal (News - Alert) is a well-known provider of service pricing and rating solutions. Their Highdeal Transactive, a modular software solution that monetizes business transactions in real-time. Highdeal solutions have dealt with billing problems in service industries such as telecom, media and entertainment, technology, transportation and logistics, and financial services.

Highdeal’s David McNierney (News - Alert), Vice President of Market Development, says, “Our perspective on the field is based on our offering, a pricing and rating engine. We do address the broader billing capabilities, but we’re very specific about one well-defined problem which concerns billing as getting invoices out the door – very much an operational problem. But the problem service providers have today is that it’s not only an operational problem, it’s also a front office problem involving marketing, harking back to the 4 P’s of marketing [1) What is the Product? 2) What is the Price? 3) How is it Packaged? and 4) How is it Promoted?]. Historically, billing systems have done well on the operational side but have done little to nothing to support the challenge associated with next-gen networks, which relate to the definition of service, how to monetize the service, what pricing mechanisms to use, what business models to put in place and how to partner with third parties, whether it’s on the supply side or distribution side. So specifically with IP communications and NGNs we see a transformation taking place around the billing topic. People understand that there are some operational things that need to be put in place, but there’s also another set of challenges that broadly flow under the billing banner. I’ll give you an example: in the old way of looking at things, people talked up more of a process-centric approach, which is order-to-cash, a widely used term in the industry regarding how a service is provisioned and billed correctly from the time an order is taken, to ensure that the revenue stream is accurate, given all the new capabilities put in place, through IP and the NGNs. And IMS is changing the process from order-to-cash to much more of a concept-to-cash model, which again derives from the notion of, say, a marketing person has an idea for a new service and now must figure out how to monetize it. So it’s not purely an operational problem. The billing process is drawn all the way into the service definition and is drawn into proof-of-concepts and market trials that may be performed. It also must answer questions such as, ‘Here’s a new service offer; what is the cannibalization effect on other services and other offers?’ Which again is not so much an operational problem as it is a marketing and front-office issue’.”

“Services are expanding from things such as SIP trunking and conferencing services,” says McNierney. “They’re evolving into more cloud-like services. We’ve heard the discussion about software and communications as a service, and other ways of expanding offerings into the cloud. This accentuates the need to figure out, now that you can move the services to the cloud, how are customers going to pay for them, or will they even want to pay for them. Are they pure subscription in nature or pay-per-use? Are there allowances? Are there overage conditions? So, again, it leads to this new set of problems.”

Here Comes Integrated Revenue Management

ECtel provides Integrated Revenue Management (IRM™ ) solutions for wireline, wireless, converged and next-gen network operators. ECtel has pioneered fraud prevention and revenue assurance for over 20 years. Their line of carrier-grade IRM solutions includes BillView, a rating and billing-verification solution. BillView can do a comprehensive rating and billing audit of all revenue-bearing telco events, reducing revenue leakage and financial exposure. BillView makes possible the successful independent charging and billing verification of large usage samples of all existing and future service types: voice, data, content, 3G, 3.5G, etc. BillView addresses both invoice-level and call-level charges, and it can protect revenues and has hasten ROI. (ECtel also offers FraudView, a fraud management solution that enables real-time detection and prevention of fraud losses, and RAP, an end-to-end Revenue Assurance solution that slashes a telco’s Total Cost of Ownership.)

ECtel’s Executive Vice President of Worldwide Marketing and Sales, Benny Yehezkel, says, “ECtel is not a billing vendor, but we are player in the field we call IRM, or Integrated Revenue Management. Basically, we monitor revenue-generating processes. We monitor everything in which billing is involved, including verifying the billing itself in a set of modules of what we call billing verification. IRM is all about operational efficiency and making sure that an operator is making its revenues and margins and is on top of everything that is supposed to be generating revenue, even if it’s a transaction that occurs well before it gets into the billing. Still, if you don’t monitor these things then data may not make it to billing anyway. In the world of convergent systems you now have VoIP and IP and all kinds of data transactions, so billing is becoming a very sophisticated issue. You’re either forced to take all of your billing systems and integrate them into one platform that is capable of handling all of these sources and all of the networks and all of the technologies, or you may want to continue to use several billing systems, one for VoIP, another conventional voice, and so forth, and then try to reconcile the invoices or send several invoices, and so forth. The actual situation in the market is not defined, because people are taking different paths. But one thing is certain: you need to verify that you will collect payment on every service you actually provide. If you don’t bill correctly then you’re losing a lot of money. In this world of complexity, the potential for error and therefore losing money, is huge.”

“Even in the traditional world of voice, what we call revenue assurance, we know that in certain countries there is a 1 to 10 percent of loss on the topline,” says Yehezkel. “So, in the complex world, billing is very important. We know from our biggest customer, AT&T in North America, that they’ve seen a return of 5 times their investment when they put in place a system to verify their revenue-generating processes.”

“We verify the billing process on several levels,” says Yehezkel. “One of them is the traditional switch-to-bill. We ensure that all of the inputs from the billing system is getting from the switches through the mediation systems are corrected and paid in full. It’s not just that they see all the records, but also that they see all of the correct details of the records, such as the time, call duration, and so forth. The second aspect is specifically validating the bill process. You have many rate plans based on various customer segmentation groups, and these need to be verified. Sometimes you introduce many changes in the rating plan or have instituted a new competitive rating plan and you’re not really implementing those in time in the billing system or your don’t have time to verify what you’ve implemented in the billing system. You may end up with many errors. What we do is to get a data sample of each of the rating plans and we can verify for each billing cycle the billing of the customers according to the rate plans that you have changed or have launched into the market. The third aspect involves making sure that there is a reconciliation between order management, what service you actually provisioned for a customer in perhaps a softswitch, and with the actual item that you billed. In so many system, you find that you gave a customer a 3-week or 3-month trial, and you actually provisioned the equipment to give him, a wider bandwidth if it’s an ADSL service, and at the end you aren’t actually billing him because your system still ‘thinks’ he’s still in the trial period. Those are the places where we scrutinize and adjust information. Remember, each dollar of unbilled CDR or transaction that you find goes straight to the bottom line. You’ve already provisioned the service and now we just need to bill it correctly.”

“Then there’s the marketing aspect,” says Yehezkel. “The industry is very mature and the name of the game is making sure that you are actually on plan, that you are generating the revenue that you want to – or plan to – generate, such as a new service launch that believe will garner 100,000 customers using the service every day. You want to make sure you’re on top of that. Our system gives you the ability to know on a very short period of time – it could be daily, or even less than a day, what’s happening with your service. If you don’t appear to have as many customers for the service as you thought, then possibly you’re not providing a quality service, or there’s a marketing problem, or maybe your competition is providing a better deal. It could be something simple, such as a network operating seeing that 20 percent of the international traffic is going to the U.K. and the traffic is much less than expected, or what is was yesterday or a week prior. Perhaps a competitor is doing something and you must react to that. It’s not all just a matter of, ‘Yes, I want to make sure that I am billing correctly’. It’s also a matter of ensuring that you actually have something to bill.”

Billing Advertisers for Free Voice Calls

Boston-based MetraTech (News - Alert) Corp. offers MetraNet, an advanced approach to four main functional areas: charging, billing, settlement and customer care that can automate business processes and business models, taking in stride rapidly changing, complex or radical business strategies across any industry for an unlimited number of services. MetraTech’s many delivery options range from licensing to outsourcing (customers are evenly divided on the preference). Recently they released MetraNet 6, that has Dynamic Workflow Modeling (Dynamically models user interfaces to match business needs, such as capturing customer data and product/service activation via intuitive GUIs. Customer care interactions can be captured and translated into workflow, also dynamically.) It integrates well with third-party applications and has financial and auditing capabilities – it’s capable of PCI-Level 1 (the payment card industry standard) compliance and can automate manual processes. No development or coding is required.

MetroTech’s founder and CEO, Scott Swartz (News - Alert), says, “We often help customers do business model transformations or help them roll out new services. We really excel in cases where someone is looking to so something ‘different’, and they end up buying solutions from us. Our technology and focus is completely industry model and industry agnostic. About half our customers are non-telco-based and we’re doing a fair number of deals bridging models that are transitioning into telcos as well as telco concepts that are pushed into non-telco markets. Our customers range from startups that just got VC funding up to the likes of Verizon Business (News - Alert), BT, Telus and Bell Canada in the telco space, and pretty much everything in between. On the non-telco side we’ve sold to up to the likes of Microsoft and put them in production to run all of their online services. Cisco (News - Alert) is a customer, and we just closed our first big deal in financial services, the Depository Trust Clearing Corporation. So we cover the full gamut in terms of company size and type.”

“Inevitably, every company wants to do something different,” says Swartz. “It’s pretty unusual to have a billing company close large deals in so many diverse segments. Interestingly, we walk into these deals where we probably don’t have any references and by typical thinking don’t have the credibility to win a deal, and yet we’ll walk out of the first set of meetings and what we hear is that MetraTech is, ‘The only company that understands what we’re trying to do’. In the case of telcos that have built billing solutions for 10, 15 or 20 years, the reality is that their experience can get in the way if they want to innovate.”

“One of the biggest changes since the mid-to-late 1990s or early 2000s is that the market was really what I would call a ‘replicator market’,” says Swartz. “If you were to look at things like CLECs in the U.S., they were springing up left and right, and they’d say, ‘That other billing company was able to get that CLEC put into production, but all I want to do is copy his or her business, and I need a system to put me in that business’. That reasoning was great during the heyday of some of these markets, but in today’s world and economy, these markets become commoditized very quickly, and things become more a matter of how you go about selling and differentiating than what you sell. Companies are increasingly pushed to find their angle on how they want to differentiate what often constitutes a lot of commodity services. A good example of how we might help a company is Blic, a wireless provider in the U.K. and I believe you need to be between the ages of 18 to 27 or they won’t let you on their network. Domestic calls on the network are free, in that the service is 100 percent advertising-based. They’ve been quite successful and are growing. MetroTech’s system helped them with everything from SIMcard management to the activation. But where’s the billing? They have to make money somehow, and they do it via their advertisers. They needed to implement a business model where they could correlate their network delivery costs and infrastructure costs with what they needed to charge their advertisers. We were able to do that for them very quickly.”

Open Source Billing

Transverse infused open source ideas into Billing Support Systems (BSS) and Operational Support Systems (OSS). Their Business Logic Execution Environment, or blee(p) is a fully integrated set of business management services that are grouped into business domain structures that can be easily extended via a plug-in framework, which allows a limitless number of business solutions to be assembled in days, not weeks or months. Their solution is offered via an open source GPL license, with no license fees. Users wanting advanced functionality, professional support, documentation, training and product extensions, can contact Transverse when they are ready for a commercial relationship.

Transverse CEO Jim Messer, says, “We wanted make sure that the Total Cost of Ownership [TCO] reflected a model that operators could support and would be agile in response to the marketplace, particularly regarding the advent of Web 2.0 offerings where business plans may change on the fly. They might not always succeed, but that’s acceptable in the space as long as the failure occurs quickly and the operator has the ability to grab onto another business model that makes them more competitive. That wasn’t possible in the current BSS infrastructure – indeed, it was implausible without an operator changing its fundamental architecture. In terms of being able to take these risks with new business models, it really boils down to two things: The cost of being agile in the marketplace, and the time associated with that. We focused on those. We found you really couldn’t handle the cost or technology aspects without doing things on an open source foundation. And the TCO then really becomes compelling when going to the marketplace.”

“We started by looking at best-of-breed open source projects such as well-established CRM/contact center packages such as Asterisk (News - Alert), business intelligence packages such as Pentaho, MySQL for the database, and so forth, where there was a very large R&D investment, on which we could capitalize without having to start that effort completely on our own. We take those best-of-breed open source projects and overlay our own open source and domain expertise to optimize them for telecom environments. When we go to market with such a reduced cost of development for ourselves and TCO for our clients, it’s quite difficult for legacy providers to compete with this business model. It’s not a question of ‘if’ but ‘when’ the carrier community embraces open source.” IT

Richard Grigonis (News - Alert) is Executive Editor of TMC’s IP Communications Group.


The following companies were mentioned in this article:

ECtel - (

Highdeal - (

MetraTech Corp. - (

Openet - (

Patni Computer Systems - (

Profitec Billing Solutions - (

Transverse - (

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