How About a Better Answer than “Overhaul Your Billing Infrastructure”…?

Written by on May 15, 2012 in BillingViews, Opinion with 0 Comments

I want to dig into an interesting article from IT Web that breaks down research from Accenture on billing. It also follows up with CSP execs for direct feedback on the conclusions. (This is nice work by Bonnie Tubbs, an ITWeb journalist filing from Johannesburg.)

This article is compelling because it’s so rare that anyone follows up on these kinds of surveys to gain validation or counterpoints. As I read through it, some distinct thoughts and reactions came to mind, so I thought I’d share them.

According to Accenture, 92% of executives who participated in the survey said their billing systems impede the launch of new offers, while almost half (46%) said their current billing capability is a major barrier to delivering new products and services to customers.

I have trouble accepting this analysis for several reasons.

First, Accenture isn’t a neutral source for this kind of data. The company wants to sell services – big, expensive projects that involve lots of solution implementation and integration. Even if the data were objectively analyzed, it is difficult to rely on the source.

Second, mobile operators roll out new services all the time. NetCracker’s Sanjay Mewada made a great point in a recent conversation. For all of the criticism operators seem to take for not out-innovating the OTT players, it seems like everyone takes for granted how rapidly they’ve been able to migrate from 2G, through 3G, and into 4G/LTE services.

Many mobile operators are among the most profitable companies in the world, so how exactly is billing holding them back? Maybe their billing isn’t geared optimally for OTT types of services. Or maybe it lacks some of the flexibility we see in the eCommerce world. But impeding the launch of new offers? That’s a gross generalization that’s tough to swallow.

Vodacom spokesperson Richard Boorman says the survey may in fact have been misinterpreted. “The reality is that implementing even a simple idea [in terms of products] is a monumental effort if it requires changes to the billing system. That doesn’t mean there is a deficiency in the billing system – it’s just the nature of something that has a massively complex task to do.”

Boorman makes a critical point here. Billing changes are dangerous. They almost always result in expensive spikes in inbound contact center inquiries. There’s a risk of business disruption that can result in an inability to collect millions, or billions, in revenue.

If you’re a big CSP, you don’t want to mess with your billing infrastructure too much. Just because someone in marketing or IT has some idea they think is the next big trend in mobile doesn’t mean it’s worth introducing to billing environments that are responsible for millions of highly profitable, market-tested transactions.

Further, large billing environments are highly complex – as Boorman says. It makes sense to go a little slow and make sure the law of unintended consequences doesn’t jump up and bite anyone in a rush to market.

Senior managing executive of Telkom’s mobile arm, 8ta, Amith Maharaj says …“Normally billing systems are the slowest component to implement new features, mainly due to the amount of testing that is required to ensure data integrity.”

This is really the bottom line; even with extensive testing and phased roll outs, there are just too many horror stories about CSPs rolling out some new service or plan only to be bombarded with customer complaints, social media outcry, defections, contact center overload, and the like because something went wrong.

Now, it would be reasonable to conclude that in a market that’s changing quickly, many good and innovative ideas have to end up on the cutting room floor because they go beyond what billing can do today. Cutting edge ideas will do that; the US hadn’t even put a person in space when Jack Kennedy said it was time to go to the Moon.

The sensible way for operators to look at this problem, however, is to cut it into two separate issues.

The first issue asks the question, “What can our current billing infrastructure enable us to do that we’re not doing today?” A focus on how to make the best use of existing billing resources is ultimately more productive and less risky than focusing on what billing cannot do.

The second issue would be to conduct gap analyses on every good idea that is dropped due to billing’s inability to support it. Any common issues in those gap analyses can be evaluated and addressed as part of an ongoing strategic plan to enhance billing. The one-offs, which introduce significant risks without spreading the benefits around to a broad group, would be unfortunate casualties of the reality of running a large, risk-intensive business.

But here’s a third, and perhaps radical, idea. Take some of that cash sitting on the balance sheet and invest it in an independent skunk works. Give it development resources and autonomy. Feed it good ideas from the cutting room floor. Give it access to sales, marketing, and customer channels. And let it leverage things like cloud-based, multi-tenant billing and eCommerce services (especially those that implement a range of payment options including credit and debit cards; gift cards; loyalty points; and even direct-to-bill charging). If billing is a hindrance, the skunk works won’t be held back. And if the skunk works doesn’t work, you haven’t risked your core billing infrastructure.

The kind of ideas CSPs really need are those that give them positive and productive ways to answer big market questions. Rarely is the answer to those questions “overhaul your billing infrastructure…you know, the one that’s raking in billions in revenue and safeguarding your massive profits today.”

About the Author

About the Author: Ed Finegold is CSO for Validas, a company that specializes in personalized user experiences that leverage analytics-as-a-service to simplify mobile buying, selling, pricing & billing. Ed has been a regular contributor to BillingViews. .

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