Billing Platforms Soar

The exchange of money for services is a fairly simple idea that has been around almost as long as mankind itself. But if the first merchants selling grain in ancient markets were to see what has become of this concept today, they would probably be overwhelmed.

In every corner of the telecommunications industry, billing systems are going through a great metamorphosis, emerging from the operational innards of the network to take flight as streamlined tools of efficiency and competition. "Billing has to be the hottest topic on the planet right now," says Dale Raaen, worldwide managing partner for customer contact at Andersen Consulting's telecommunications industry practice, which has helped design many network operator billing and customer care systems. "It is becoming an increasingly strategic element for carriers," adds Janet Constantin, analyst for wireless mobile communications at The Yankee Group, Boston. "There has been a big change over the last one to two years as carriers have started pushing multiple pricing plans."

Recent industry events and network operator announcements offer further proof of the changing nature of billing systems. Earlier this month, for example, MCI launched perhaps the first real one-stop shopping strategy of the deregulation era, pledging to deliver long-distance, Internet access, cellular, e-mail and eventually local services under a single-contact, single-bill, single-brand plan, MCI One.

Just two weeks ago, at the National Cable Television Association convention, Time Warner announced it will install the CableMaster 2000 cable billing and management system from Cincinnati Bell Information Systems. Earlier, at Wireless '96, AirTouch Cellular discussed its joint effort with American Management Systems to co-develop a simplified customer service interface for its billing system (Telephony, April 1, page 14). In addition, LHS Communications talked about its work for Pacific Bell Mobile Services. And Jones Intercable recently said it would begin deployment of Kenan Systems' Arbor/BP platform (Telephony, April 22, page 10).

Operators of all types of networks are discovering that billing is an important piece of the competitive puzzle as either a factor of success or a hurdle to it. They're finding that fast responses to customer inquiries and quick remedies for billing problems will earn long-term customer respect.

However, as carriers begin to realize the importance of efficient billing in the newly competitive environment, they are also discovering that the billing systems many of them have counted on for 10 years or longer are in no shape to handle the requirements of multiservice delivery, service packaging and creative discounting that are inherent to this competitive era.

Billing for Bundling Perhaps the biggest problem with many legacy billing systems is that they were not built for the age of service bundling.

"The architectures that were set in place seven or 10 years ago were predicated on a market that didn't know about bundling services," says Walt Schortmann, vice president of telecommunications services at EDS.

"Many billing systems were on huge mainframes and were built in one frame of reference many years ago. They're just too slow for today's requirements," says Jim Holtman, vice president of systems architecture at CBIS.

Opening new revenue streams may be the top reason why network operators want to get into new markets so badly, but they would not be making the jump into a new age of service complexity if they didn't think they could package these new services for their existing and prospective customers.

Cross-promoting and cross-discounting can be formidable weapons. Service providers could win over customers for local service with the promise of a discount if those customers spend a certain amount on long-distance each month. Other service providers could cut the connection charge for cable TV service in half if the providers already supply customers with local phone service.

"MCI Friends and Family was a classic example of using billing competitively. The invoice can be a marketing tool," says Mark Nielsen, president and chief executive officer of Subscriber Computing Inc.

To juggle different services and rate plans, billing systems need to create more real-time data on calls, call patterns and the customers themselves. "It is hard to incorporate this [concept] into legacy systems," says Holtman.

Because so many new services and competitive requirements are coming to the foreground, carriers also need to consolidate what has become, at least for some, an unwieldy web of billing systems handling different services or geographies. Some carriers with limited commercial rollouts of a variety of services could have as many as 150 systems.

They should bring this number down to something more manageable such as four or five large regional systems, or eventually one system with ties to all databases, says Norman Rafalowitz, senior vice president of international marketing at Amdocs. "You don't want to have a billing system for each new service you develop."

The growth of service subscribership, especially for fast-growing Internet and wireless services, presents another problem. Most legacy billing systems do not scale well. "The scalability issue has really emerged in the last two years with some of the startups. Some of these carriers will buy throwaway systems for now and think about scalability later," says Raaen.

In different parts of the industry, new technology advancements are also changing the requirements of billing platforms. With GSM-based wireless networks growing overseas and gaining a foothold in the U.S., some new wireless platforms must accommodate SIM card use, says Nielsen.

To handle all of these new needs successfully, billing is moving out of the mainframe world to become more of a client-server art. In the new paradigm, symmetric multiprocessor architectures or massively parallel servers are configured with application servers and client machines with Windows NT or Windows 95 formats. Some systems still use mainframes for operational aspects of the billing process. "Network operators want open systems. They want to be able to rapidly enhance or customize their systems," says CBIS' Holtman.

The nature of the client-server architecture is such that many different billing cycles can run simultaneously, actively communicating with a cluster of database servers to supply information to customer service representatives on demand.

In addition, some newer systems are using object-oriented technology to increase system flexibility. "Object-oriented technology will allow you to do things like producing a new price plan on the fly," says The Yankee Group's Constantin. Some carriers have as many as 250 different price plans, she says. An advanced billing system not only makes these plans easier to track, but also easier to create.

Building Better Billing Billing systems are not what you would call "off-the-shelf" products. You might say a billing system is what you make of it. In fact, many of today's newest billing systems are the result of tightly collaborative efforts between carriers and vendors to design systems specifically addressing carriers' singular needs. For example, Andersen Consulting recently worked with Pacific Bell to design a billing system for the carrier's Internet access service that provides customers with a do-it-yourself approach for buying service. Also, Savile Systems helped AT&T engineer a special billing system for small business customers. Nearly 1000 AT&T customer service representatives now use the system to process 30,000 customer inquiries each week.

In some cases, these special systems-Andersen Consulting's development or American Management Systems' effort, for example-are being resold to other carriers. Establishing a new billing system can cost a major carrier as much as $50 million and can take anywhere from one to three years to design, implement and customize, depending on the number of subscribers a network has, says John Trombino, wireless solutions executive at IBM's telecommunications and media group.

IBM supplies its own billing system but also supports other billing platforms on its modular, Unix-based RS6000 SP2 processor. The company is currently developing partnerships with billing system developers such as CBIS, LHS, Amdocs and Infocellular. "Someone will always come along with a better mousetrap," says Trombino.

Indeed, the billing system market is teeming with software developers, hardware vendors, consultancies, global systems integrators and niche providers, all ready to sell network operators some piece or many pieces of a complete billing solution. The list of providers includes EDS, CBIS, IBM, Amdocs, American Management Systems, LHS Communications, Savile Systems, Kenan Systems, Andersen Consulting, Carnegie Systems, Unisys and Subscriber Computing Inc., among others.

In terms of core components, not many differences exist between most billing systems. The client-server architectures built on Unix machines with a Windows format on the front end are most common, although some still use mainframes for some traditional billing functions, says Constantin.

Despite the attention being given to new technology enhancements such as the use of object-oriented technology and development of new interfaces, Subscriber Computing's Nielsen says it is important to remember that functionality is the true driver of billing system enhancement. "It is like looking for a new car. Technology should be secondary to functionality," he says.

Handling with Care If you had entered the telecommunications industry only within the last two years, you might think all anyone ever talks about is customer care and that the industry is built on it. Those who have been around longer know the truth: The ongoing customer care craze is part of the buzz created by competition. It's an example of what happens when an industry built largely on monopolistic principles suddenly finds its foundation disintegrating.

Customer care can be viewed as one element of the billing process, but conversely, a flexible, reliable billing system can be viewed as one step toward the goal of efficient customer service. In any event, billing engines often are integrated with sophisticated customer care systems in the back office scenario.

For example, Kenan's platform for Jones Intercable interfaces with a customer care system devised by Jones Cyber Solutions. Databases containing customer profiles, rate plans and other information can also interface with such a system, giving customer service representatives access to a wealth of information quickly as they process customer inquiries.

Customer care was once more rudimentary in nature. Network operators did not have the tools nor the inclination to classify and analyze customer data in a proactive fashion.

"Legacy customer care had to do with entering trouble tickets. There was no analysis of needs or problems involved," says Rick Kehoe, line of business manager for decision support systems at GTE Telecommunications Services Inc. Carriers, however, are beginning to realize that they are spending far more money acquiring customers than they are on retaining customers, says Kehoe. "Billing and customer care are really part of a total network management process," says IBM's Trombino. Will Anyone Notice?

In deploying new, multitalented, scalable billing systems, network operators are acting under the assumption that their customers want one bill.

Although this assumption is probably correct, it might take some time for customers to realize it. The Yankee Group recently released a report that found that, while 51% of customers surveyed said they were very interested or somewhat interested in receiving a single bill for all communications services, 44% said they were not very interested or not at all interested.

Does this mean that service providers are jumping the gun on overhauling their billing systems? Probably not-for several reasons. First, the age of multiservice providers has barely begun. It is still pretty hard for some people to understand that AT&T has not been their local service carrier for the last decade. In most cases, it will take carriers several years to make dents in their new markets, but when customers realize the advantages of going with one service provider, you can throw all the old surveys out the window.

In addition, creating a more efficient billing system is not only about lessening paper waste. It is driven by a need to provide better overall customer service and response to engender customer loyalty. It is about allowing service providers to address specific customer needs more proactively and accurately by letting them create a variety of special discounts and packaging plans. It is about removing complications from the billing process.

But better billing does not end with the installation of a new system or the reprogramming of an old one. The new competitive environment also puts new demands on the people interfacing with the systems, and, in turn, with customers.

"Carriers need to hire the right [customer service representatives] and train them correctly. If you don't have quality, capable people, the best billing solution in the world will fail," says IBM's Trombino.

Also, carriers need to understand that establishing an efficient billing process is not an end in itself. Assembling the right platforms, the right supporting architectures and the right people are all steps to establishing a better billing process. Billing will always be about exchanging payment for services, but the ways in which network operators do this and the efficiency with which they do it may have a direct effect on whether they fly with the competition or become history.

"Carriers need to constantly be looking at their systems," says Subscriber Computing's Nielson. "You'll never have a completed product. If you don't understand that, you don't understand the nature of the business."