Billing systems are often considered the lifeblood of a telecommunications operator, but are sometimes its biggest weakness.
Many GSM operators would like strategic billing and customer care systems (BACCS) but actually implement tactical billing solutions for a variety of good business reasons.
With growing deregulation across the world, and expanding competition, the strategic demands on GSM operators are great and the consequent demands on BACCS are enormous. As competition gets fiercer, billing systems:
- must be agile to support marketing innovation
- must encompass diversifying services in a converging market
- must enable excellent customer service
- must survive shifting markets
A survey of delegates at IIR's Billing Systems '96 conference found that less than 25% of operators recently implementing a new billing system claimed the result matched their expectation. Can billing systems ever fit the bill ?
In summer 1992, when the first GSM networks were brought into operation, operators were already looking for capabilities that went beyond those provided by traditional billing systems. Phase 1 GSM specifications included additional features such as call forwarding and call barring on top of the basic wireless service while Phase 2 offered a multitude of new features and services.
However, many early GSM operators were off-shoots of state owned monopolies and were not too concerned with competition. As long as they could meet their licence requirements, they could run their business with little concern for service time-to-market or customer satisfaction. As a result, the first billing systems developed for GSM tended to be monolithic and inflexible with little attention to customer care and still less provision for innovative marketing campaigns.
With the Telecommunications market on the verge of massive deregulation, competition quickly became a key concern for new and existing operators all over the world. The billing system, previously considered an overhead, started to be recognised as a valuable business tool and a means of potential differentiation.
Billing systems needed to evolve rapidly in order to effectively support all the new GSM services in the competitive market ¾ particularly those developed from existing fixed line products. Phase 2 services such as data transfer, fax and three-party calling added new complexities to the rating and billing process as well as new opportunities for marketing through cross-product promotions.
The whole perspective of the billing system had to change. For example, where previously customers were identified by their telephone number, the fact that customers could have multiple numbers for voice, data and fax services required the billing system to recognise the customer as the primary entity.
Because of these market drivers, new systems started to develop with modular designs, potentially allowing new functionality and services to be integrated more easily and providing more flexibility for designing new tariffs and product packages. Amdocs, for example, claims its billing product 'provides the comprehensive functionality, inherent adaptability and intrinsic flexibility required to manage and exploit dynamically changing business realities'.
But the changes and demands are not slowing down. Operators are becoming more and more innovative in their service offerings. MCI led in the US with the introduction of their 'Friends and Family'. Vodafone have adopted Air Miles as rewards for customer usage. Orange led the UK market with it's innovative bundled ('free') minutes promotion, which led to the dominant enquiry on the billing system: 'How many minutes left?'.
Many other marketing initiatives are placing increasing demands on billing systems and competition can only increase, with new dimensions appearing in the form of satellite mobile communications with their associated multinational implications, and many new players offering a spectrum of services in addition to the GSM palette.
GSM itself no longer has to support just a mobile phone service. With the development of new technologies and the Internet, GSM is becoming the ultimate vehicle for 'lifestyle' applications such as electronic commerce, multimedia and information services. The Mobile Data Initiative predicts that data transfer via GSM is expected to exceed 20% of traffic by the year 2000. Novel use of the GSM chip sets is opening the market to a new service and product possibilities.
Personal Digital Assistants which include the GSM chip set, such as the Nokia 9000i Communicator, are already widely known, offering mobile telephony, messaging, Internet services, PC connectivity and more.
Toshiba's GENIO pocket mobile communicator has recently been launched in Japan for the PHS market, providing users with a 'self-contained computer communications centre' including telephone, pager, fax, high speed modem and a range of Personal Information Manager functions.
Motorola, Alcatel and Siemens all plan to bring out large-screen mobile 'phones in 1998 which will provide pocket sized Internet access.
Vending machine
It has been predicted that the GSM chip set might appear in as many applications as the microprocessor. One example suggested is a vending machine, which communicates when new supplies are required, and can be interrogated to check operational status.
In addition to all the new GSM offerings, it is becoming more common for 'united utility' operators to supply their customers with a range of diverse services, from multiple mobile systems and fixed line telephony to utilities such as electricity. Dual-mode or multi-mode mobile telephone handsets could allow operators to supply, for example, GSM, DECT and satellite services.
In the UK, deregulation is already happening and Scottish Power has established Scottish Telecom as a subsidiary which could allow the organisation to develop a converged system for the supply of power and telephone services to their customers.
The operator must find an efficient way to manage and bill all these services. Historically, as new services are brought to market, separate billing systems have been developed to support them. Operators have been faced with co-ordinating multiple sources of customer data, often on several different platforms.
The natural progression is to integrate all the disparate systems into one convergent billing system, which provides the operator with easy access to all the consolidated customer data and facilitates cross-sector promotions. The customer can then be given a choice of receiving one combined bill or separate bills for each service.
However, the convergent system must address a whole range of new challenges, such as rationalising customer information and handling multiple types of usage records.
Billing system vendors are already starting to offer convergent billing products, such as Kenan's Arbor/BP which 'has the ability today to deliver wireline and wireless telephony, Internet electronic commerce and cable TV charges on one consolidated bill'.
It is, however, important to remember that a high standard of customer is now expected. Modern society is increasingly customer-focused. Almost all organisations are recognising their main differentiator as the level of service they offer their customers, rather than simply the product they sell. Customers have come to expect a high standard of customer care and are ready to look elsewhere if they are not satisfied.
In a market where GSM services are fast becoming a commodity, high quality customer service is both expected and demanded. For GSM operators, the challenge is for the billing systems to enable rather than constrain the delivery of excellent service.
Range of queries
As a key part of the customer care function, the billing system must be responsive to the needs of the customer. Customers expect immediate satisfaction when they contact a Call Centre ¾ even if they have a range of queries, such as
- can you explain my bill
- how can I get my handset repaired?
- why have I received a reminder letter?
- can I use my phone in a particular area?
- why has my fixed line service been disconnected?
- how to understand their bill
The list gets longer as more diverse services are offered. Customers want to make one call, speak to one Customer Service Representative (CSR) and get all their problems and queries resolved immediately while they are making their call. To achieve this, the CSR must be empowered by having all the necessary data easily accessible via the call centre software. The challenge for the billing system is to provide data efficiently and allow rapid integration of new service modules as they are brought into service.
However, it is not enough just to have an efficient Call Centre. Many operators aim to offer world-class customer care, and they focus all their efforts on the customer care function. But customers make judgements about a company at their every exposure to it: in advertising, sales, service, invoicing, customer care, payments, bill follow up. It is the total customer experience that determines whether the customer will stay with one operator or churn to another.
It has been said that it takes weeks to find a new customer, but only a second to lose one. The billing system should help in predicting customers who are likely to churn by providing analysis of past experience and it must contribute positively to the total customer experience through it's impact on the business as a whole .
A further consideration is that billing systems must survive shifting markets. The mass market is undoubtedly on its way.
As the mobile communications market matures world-wide, operators are seeing tremendous growth rates. Market penetration is predicted to average 30% by 2000. Norway and Sweden are already achieving market penetrations over 20%. Figures of 50-70% are believed possible within 10 years in some countries.
The mass market ¾ low cost, basic service consumers ¾ is fuelling this growth and brings new customers with different needs and expectations. Operators, and specifically their billing systems, must adapt to these changes in order to remain competitive.
Greater risks
Mass market consumers represent greater risks to operators; it is even more important for operators to protect themselves from exposure to fraud and defaulting customers. Adept operators will be able to leverage risk control techniques such as automated usage monitoring and pre-paid SIMs to take on customers who previously represented too much of a risk. Billing systems must support and facilitate these risk reduction activities.
Mass market growth brings other challenges too. A PA Consulting Group survey at the end of 1995 found that 78% of operators questioned expected a strong reduction in average revenue per customer as a result of growth in the mass market.
Mass market customers tend to have lower usage and lower tariffs than business users. Although total revenue rises with the customer base, the average revenue and profit per customer decreases in the mass market taking longer to break even with the mass market customers. Additionally, the cost of acquisition is invariably greater than the cost of retention, so the challenge for the billing system is to help to retain these low revenue customers for as long as possible whilst minimising their costs.
In order to combat escalating customer care costs, operators must recognise that service should be aligned with customer value. To this end, billing systems need to support customer lifetime value analysis and the associated requirement for customer segmentation so that all customers can receive effective service appropriate to their value.
To manage costs in a mass market, it is important to minimise the number of enquiries that a call centre receives. This however, becomes harder as the subscriber base expands. Mass market customers are more likely to query their bill. Billing systems must produce bills that are clear, easily understandable and accurate. This might involve customisation of bills to suit each customer or customer type and to include explanatory information in the first bill sent to a customer.
Mass customer care must, in addition, be automated. As the subscriber base grows, the pressure on the call centre will increase and automated enquiry handling will be essential. Giving customers the option to query or settle their bills using automated access will reduce the load on call centre staff. Billing systems will have to support a range of automated techniques such as direct customer enquiries over the Internet, more sophisticated use of voice response units and further advances in computer-telephony integration (CTI). Some billing system vendors, including LHS with BSCS, are already developing such an Internet access feature.
The answer
What, then is the way ahead? If it's too much to expect a single billing and customer care system to meet all these needs, then the answer has to be an integrated layered solution in which different layers address different demands, but together meet the full requirements of the operator.
In the diagram, the top layer represents the customer or the customer service agent accessing the customer care components of the Billing and Customer Care solution. The business process layer is the customer service representative's desktop application or the customer's automated access software. The business logic layer is the middleware which insulates the business process layer from changes in the business data layer and vice versa. The business data and systems layer represents all the batch processes and information and systems from mediation through rating and billing to data warehouse and more specialist derivative software.
Billing problems? Try the integrated layered solution
This layered approach addresses the rapidly changing requirements for Billing and Customer Care systems and allows relatively fast changes to be made to individual components without the previously associated risks to the entire business. The whole solution, which could attract the best of breed across the layers, could still be single-sourced using a systems integrator.
Those billing systems which are truly open, allowing rapid configuration and integration will survive. Those that are based on inaccessible proprietary implementations will lose. The market will decide.
