BILLING WITH A FUTURE

WHAT AUGIE WANTS, AUGIE GETS.

A list, then, of what Augie wants:

* Scalability. "Any new start-up will tell you that."

* System flexibility

* Easy support for new services and features. Augie likes "plug-ins."

* Quick installation to meet time-to-market goals

* As little dependency as possible on his vendor. "We don't want to have to go back to them every time we want to change something."

Augie Lindsay, VP of information systems at PaeTec Communications, and talisman of the future of billing system implementation. PaeTec, founded in Fairport, N.Y., just last May, is one of the dozens of new integrated communications providers (ICPs) that went shopping for billing systems last year.

Within a month after forming the company, Lindsay and his cohorts attended the Billing World conference in mid-June with express purpose of creating a short list of billing vendors and getting details about system functionality. It invited about four or five into its new offices to put on their dog-and-pony show, considered each system, checked references, requested more details and eventually awarded a contract to Daleen Technologies last September.

PaeTec currently offers long-distance service but also is looking to offer local service, data services and Web hosting. As an ICP that isn't quite an ICP yet, having a billing system that can grow and evolve with the company's customer base and services is very important.

"Almost no new carriers start out with a wide base of services," says James Daleen, chairman and CEO of the eponymous vendor. "A lot of them do long-distance first."

Lindsay: "While waiting for our first switch to be installed, we wanted to start billing for long-distance." Starting simple, but it gets much more ambitious. This year alone, PaeTec will install switches in New York City, Rochester and Albany, N.Y., and in Boston, Philadelphia, Miami, Los Angeles and Washington, D.C.

"We're setting up in regions with separate P&L for each region-our information systems have to be placed to track that," Lindsay adds.

This not only positions PaeTec for fast subscriber growth-requiring high billing system scalability-but also calls for a system flexible enough to easily integrate with other operations support systems and functions.

Of course, as the customer base grows, that ICP strategy will kick into high gear. At that point, PaeTec will quickly need to add billing support for the new services. It will accomplish this through a series of Daleen plug-in modules that require little time and complexity to install. "How does system adaptability translate competitively?" is an important question to pose to vendors, says Daleen.

The simplicity of the plug-ins gives PaeTec one part of the recipe it needs to adapt the billing system on its own without ongoing vendor support.

The other half of the recipe is training, delivered by Daleen early on to the PaeTec people who will manage the billing system.

"Training is increasingly important," says Dave Corey, prez and COO of Daleen. "These carriers want to take control rather than outsource to other people."

PaeTec's story is a standard example of the chief billing considerations of CLECs, ICPs and other new carriers. While the billing deployments of these companies have brought names of different new carriers into the headlines week after week, the needs fit a common pattern.

Variations on a theme:

Allegiance Telecom has moved beyond the early operational phase that now busies Paetec. The company already serves as an ICP in several markets. Its service plate includes local, long-distance, Internet access, private-line and enhanced calling services.

Time to market was critical to Allegiance because it wanted to offer at least one service to local exchange customers who were most predisposed to switch carriers.

"At a minimum, a new carrier will have to launch the service that the local RBOC already offers," says Mark McCormack, executive VP at Intertech, Allegiance's billing vendor.

However: As a carrier that has moved beyond first base, Allegiance is now putting billing system scalability to the test and is even testing the very definition of scalability. "You can measure carrier growth in the customer base and also in the number of markets. One is transactional scalability, the other is system scalability," says McCormack.

To address entrance into new markets, the system has to catalog different variables: different product packages, different regulatory/taxation requirements by state and other factors.

The billing system also must be ready to handle strategic shifts that require sudden support for new services. "Some carriers may not really define their service strategy until halfway through their market roll-outs," says McCormack.

Sometimes, the service list and the market plans vary greatly by carrier business model. For instance, resale is simple to bill. It usually involves only one or two services, and carriers only do it for a short time to get some experience-and make some money. The complexity increases with a facilities-based carrier because the billing system must interface with other systems, as well as support operator services and other functions. The wholesale business can be very different, says McCormack. "A smaller number of much larger customers is complex in a different way than the other models."

Billing systems have to manage the complexity to make it look simple.

In some ways, RCN is a much more complex and mature ICP than either Allegiance or PaeTec. "RCN is like a collection of companies with all different kinds of services, but they want to go to market offering a uniform, converged picture to their clients," says Bob Fritz, VP of AMS.

In a project announced last month, AMS undertook management of the project to integrate applications encompassing: billing, ordering, provisioning, usage collection, mediation, customer care (including Web-based customer self-service functions).

In addition, AMS subcontracted Beechwood to integrate trouble management, workforce management, interconnection and service activation. In all, as many as seven to nine different companies will be involved in the project on various levels.

Fritz underplays the challenges: "These are standard project management challenges." Still, it's a lot to bring together, especially when you consider the previous observation about vendor dependence.

"RCN doesn't want a lot of customized development going on. It doesn't have time for that," says Fritz. That means broad use of off-the-shelf solutions with limited customization to tie everything together and create scalability, which OTS solutions aren't exactly known for by themselves.

Still sounds complex, but the Web-based self-care aspect is where the simple part comes in. The customer doesn't see the complexity. In many ways, the best articulation of where billing is going. New service support, high scalability, tied into the simplest of front ends.

The result is a simple bill.

Ultimately, that is what all new carriers must remember: When they've beaten the odds and the competition and have begun to offer multiple services in multiple markets, the bill they issue to all those different customers must be no more complex than the first bill they issued to their first customer for their first service in their first market.

A billing system built with regard for the future will facilitate that dream. Intertech's McCormack: "You can be a service provider without a network, but you can't be a service provider without a billing system."