Convergence with care

The recent marriage of AT&T and TCI is a clear signal that convergence is on the move. Even more critical than achieving synergies, economies and efficiencies, mergers such as AT&T/TCI and MCI/WorldCom seek to increase revenues by offering premium services to a combined customer base.

A merged AT&T and TCI will have more than 100 million customers for the combined firm's wired and wireless, cable and communications, voice, data and Internet services.

With convergence, pressure on the new organization's billing systems increases tenfold. Legacy systems are still struggling with the complexities of the pre-merger product offerings. Tens of thousands of universal service order codes-which the old Bell System used to identify services and equipment-are standing between any logical product re-packing and rapid introduction of new products.

Now the new firms are faced with combining multiple billing systems, each of which may have multiple legacy customer and billing systems of their own. The converged company essentially must re-identify its customers-who may have been formerly served by all partners-with different products, pricing plans and customer identification characteristics and codes.

Does ABC Co. and its subsidiaries appear as ABC on all invoices, or will names on bills differ? And what are the answers for post-merger consumers requesting an inventory of their current services from the combined company, requesting volume pricing for certain Internet and cable usage and wanting a combined bill in the same billing cycle for all services?

Tens of millions of dollars are spent extending the life of established systems and building or buying wholesale replacements. Many will have the goal of an integrated and highly functional customer billing system to meet the customer's apparent demand for a single bill.

Recent surveys show that 69% of consumers want a single statement from their provider. Yet the reality is that many customers may well purchase less when presented with a single demonstration of their spending on "airtime."

Further, the pace of mergers and acquisitions may well outpace the projects to revitalize or replace old systems.

In rethinking billing and customer systems, we should not confuse the end game with the solution. The end game must be a single convergent view of the customer-anintegrated seamless way to intelligently select, package, price, offer and bill for products. However, the solution may not be a single integrated system, but rather multiple systems in a single architecture, supported by standard platforms and integration tools.

New billing products geared toward convergence, which can add rich functionality as the product line expands, should be brought into the mix.

Legacy systems can be overhauled, maintaining the functions they do well-volume rating, polling, diagnostics-and removing the high overhead, inflexible components.

The first step in convergence success is to achieve a common, intelligent view of the customer from all the repositories available. Next is to enhance that repository to share the common view across the enterprise and allow customer channels to update the customer profile after every customer interaction.

Equally important is to develop a product module independent of the various billing systems that lets the company be creative and quick in defining, packaging and pricing products without being hampered by the limitations of any of the billing platforms. The pseudo bundling taking place today will not enhance revenues.

Finally, tools for data mining, integration and easy interface are fundamental if the multiple systems are to work in tandem. A sophisticated practical architecture that is not biased toward particular products is key.

The intent is to get the product to market quickly to qualified customers. This business strategy requires an intelligent invoice that is as sophisticated as the products it covers.

The bill should not be a confusing monologue that devalues the service; it should be a tool for creating an informative relationship between customer and carrier.

Jennifer Taylor is a Senior Partner in Price Waterhouse Coopers' Technology, Information, Communication and Entertainment Group. She is based in San Francisco.