Posted: 10/2000

Diagnosis: Advanced Billing Disease
By Chris Garifo

The good news is your company has runaway subscriber growth, and it’s days away from rolling out a suite of advanced services. The bad news is its billing system is on the verge of reaching its maximum capacity and lacks functionality to accommodate the atypical billing parameters the marketing team has planned.

What to do? As with any disease, you must get rid of what ails you. But the cure is not a miracle.

Following a systems checkup and needs assessment, carriers must select the right billing solution and engage in a painstaking and complex implementation and integration period.

Like a bitter pill, many carriers are finding that this is exactly what the doctor ordered, enabling them to remain in today’s competitive market.

Making Decisions

A billing system can be viewed as a telecom’s heart, pumping the much-needed revenue that is its lifeblood.

With that in mind, says Rich
Aroian, vice president of marketing for ADC Telecommunications Inc.’s (www.adc.com) Software Systems Division (formerly Saville Systems
plc), changing the billing system is somewhat like a heart transplant, in that “you need to keep the patient alive while you move from one heart to the other. You need to connect all the arteries as well. It can be a complicated undertaking.”

Any telecom considering changing its billing system needs to know why they’re doing it, Aroian says, adding there are a macro view and a micro view that need to be considered.

“The macro view is you’re changing your billing system for a couple of potential reasons,” Aroian says. “One is you’ve outgrown it; it simply doesn’t have the horsepower to support your business. The second reason could be your business has changed so much, and you expect it to change even more, that regardless of how big you can grow your existing system, it simply doesn’t have the functionality to support your business and keep it competitive in the future.”

The micro view, Aroian explains, is the point where the devil is in the details, with discussions about issues such as training of personnel, data conversion, integration points and system documentation.

It’s really a full-blown project-plan approach that helps you identify all the variables,” Aroian says.

BTI Telecom Corp.
(www.btitele.com), a facilities-based ICP headquartered in Raleigh, N.C., changed its billing system this year, a process that was launched around November and included the implementation of electronic bill presentment and payment
(EBPP).

Pam Schaard, BTI’s director of MIS, says that among the reasons driving the change were the desire to take advantage of the benefits offered by the web in the areas of customer care and service.

“What we did is we embarked on an analysis whereby we created a business requirement definition document listing all of the functionality that we would like to see in a web-based [EBPP] process,” Schaard says. “We went out to about six companies who we had been following … and we invited them each in for a discussion and talked to them about our business requirements definition document, asking them what part of the document could they fulfill in their standard product and what would be customized.”

Schaard says they also queried the companies not only about their implementation process, but also about their corporate plans and vision for the future, and what other elements besides EBPP they planned to offer.

BTI executives eventually chose Massachusetts-based edocs Inc.
(www.edocs.com). Schaard says the decision came down to a variety of considerations, including edocs appearing to be a company much in the same entrepreneurial vein as
BTI, its track record with its customers, its product having a lot of functionality as standard, and the quickness with which edocs responded to BTI requests.

“We gave each company a sample bill and said, ‘How quick could you get this up on the web?'” Schaard recalls. “Edocs over the weekend did it, and on Monday … asked if we’d like to see a demo of our bill on the web.”

That was impressive to BTI because time to market was an important consideration, Schaard says, adding that BTI had set a 90-day time frame for implementation.

Schaard downplays the cost factor.

We certainly looked at cost,” she says. “But the benefits were so enormous, the payback was so quick, that cost was not an issue.”

Cost can be an issue with some carriers, however.

A lot of our customers … may not have the budget … to do anything but create really what is a phased-in approach to a holistic billing operation in the back office,” says Derrick Van
Grol, vice president of marketing and sales for Info Directions Inc. (www.infodirections.com), a Victor, N.Y.-based developer of rating, billing and customer care software.

Van Grol says some budget-constrained customers will prioritize their plans, trying to build more revenues so they can justify spending more money on a better, and costlier, billing system in the future.

“So they get creative,” Van Grol says, adding that they’ll look for a best-of-breed, off-the-shelf product that allows them to work at a level that fits their budget. That product then becomes a bridge that the carrier uses until its revenues reach a point that they can bring in a better system.

Getting It Done

The degree of difficulty that goes along with a change in billing systems often comes down to the size and age of the carrier’s legacy system, with the largest systems, such as those belonging to a Verizon Communications
(www.verizon.com), usually being the most difficult, and installing a system in a startup the easiest.

“It’s a generalization that’s absolutely true,” says ADC’s Aroian. “There will be the odd situation where … you may have a startup that has a unique and very complicated business model that causes it to be an even more challenging implementation; but, in general, a conversion is more complicated, more challenging.”

A variety of technology and human factors go into the implementation process. Whereas installing the system software is generally a fairly straightforward effort, integrating the software into the other various systems within the network and OSS requires far greater work.

Aroian says the factors that will determine just how much work will go into the integration come down to the number of applications involved and how complex they are.

“For example, integrating to a very basic decision support or reporting structure system is pretty easy compared to integrating with a sophisticated order-management application where you need to reconcile product catalogs and things like that,” Aroian says. “So, it’s very much of a ‘how many angels on the head of a pin’ question.”

One of biggest challenges in the implementation is transferring the data from the old system to the new one. That data includes information about a carrier’s customers, about its services, its product catalog and how its customers use its services.

“So, you’ve got potentially a huge amount of information that’s formatted in one way, possibly on a completely different database–it may be an IBM database moving to Oracle for us, for example–in a different format because the system defines the certain format,” Aroian says. “So, you’ve got a significant data convergence effort that needs to take place.”

The new billing system also will have to interface with the general ledger system, various support and marketing systems,
customer-service systems, and will need connections to mediation devices that pull the usage information out of the networks. CLECs and data LECs
(DLECs) also will need a connection to an ILEC.

Aroian says that, in general, 85 percent of what needs to be integrated will be pretty much the same for everybody. It’s in the other 15 percent that most of the problems will fall.

“That’s where the customization work … [and] the more sophisticated integration work takes place,” Aroian says.

Aroian says the industry’s movement to “Internet time” has precipitated an evolution in the integration process itself. Rather than deploying an application and integrating it, Aroian says, carriers are shaving time off the integration process by buying bundled packages of applications that have already been integrated, allowing for a faster deployment time.

For those CLECs that can afford the extra cost, an integrator is an option. In fact, Van Grol says, Info Directions in many cases likes an integrator to be involved “because they can run that first line with the customer in helping them really scope out their needs.” An integrator also can help a customer better understand the process, usually resulting in a more reasonable implementation timetable.

Schaard says BTI’s implementation was somewhat easier because it already had a convergent biller in place. The edocs product would be used for bill presentment and payment processing.

The bill, either paper or web based, is often the primary point of contact between a carrier and its customers. That requires a carrier to think not only of its own needs when considering a new billing system, but its customers’ needs as well.

Compounding that is the heavy volume of detail within the telecoms bill. Even a small-business customer can have hundreds of calls, while calls for larger business can run into the hundreds of thousands to millions. That can be problematic for a carrier moving into e-billing because, with so many records, customers’ web browsers can run very slowly-a potential point of aggravation.

Schaard says part of the critical thinking that went into the decision making and implementation of BTI’s bill presentment system was its knowledge of who the customers were. She explains that not all customers are going to have computers with lightning-fast processors and high-speed Internet access. That required BTI, working with the edocs system, to formulate a “drilldown methodology” that allows a customer to decide what level of detail to view. The greater the detail, the slower the response time.

Time to market will always be a bugaboo in any implementation, with some carriers demanding more bang in less time. That’s going to require a bigger buck to those vendors being placed under the gun.

“We build into our commercialization strategy pain and suffering,” Van Grol says. “That really forces the customer to think, ‘Maybe I’m not going about this the right way,’ and they’ll either take a step back or they’ll sign that accelerated implementation fee and move forward.”

The Human Factor

Despite all the new technology hitting the market, people are still going to be a major consideration when it comes to any new billing system. People will need to be retrained and, in some instances, convinced that the new system is, in fact, a good thing.

Aroian says retraining is vital because of the diversity of the areas linked to the billing system: operations, support, database administrators, customer service representatives and marketing people are all going to be working with pieces of the application.

In addition, Aroian says, there’s an intellectual investment involved, especially in legacy systems that the employees have been using for years.

As a result, those employees may need not simple training, but must be given the opportunity to understand how, by doing things differently from what they’ve become accustomed to, they can work more quickly and efficiently. Oftentimes, employees are resistant to change unless they can be shown concrete benefits for themselves in terms of output and ease of operation.

Compounding that problem can be situations in which the carrier no longer has any employees who were involved in the implementation of the legacy system, or there’s no documentation of some of the customizations that have been performed over the years. In such cases, the people working with the system may know how to perform the necessary functions without any idea as to why they need to be performed that way. Part of the training, then, may include overcoming the “that’s-how-we-do-things-here” attitude.

Other Options

Carriers more interested in concentrating on their core competencies may decide they’d rather not spend the time, money and other resources on implementing a billing system. To meet those needs, carriers have a variety of outsourcing options, including ASPs and service bureaus. Carriers will have to consider what their requirements and concerns are before deciding on which outsourcing model, if any, they’ll take.

Ben Bauer, director of product marketing for Internet Utility Services at Hewlett-Packard Co.
(www.hp.com), says that in the past, telecoms shied away from outsourcing, preferring to maintain greater control of such a critically vital area as billing. As carriers look to move more and more into the packet-switched arena, however, carriers are turning to outsourcing as a quick way of making that shift.

By using a service such as Hewlett-Packard’s utility, Billing on Tap, which is akin to a service bureau, carriers can more quickly begin offering IP services, without investing in the software and infrastructure or the internal expertise necessary for a billing system capable of meeting that market’s specific needs.

“Let’s face it, they don’t want it really to be a core competency,” Bauer says. “They want to make money on their services, and billing is just a way to enable the service.”

Info Directions’ CostGuard billing platform is offered through an ASP model. Carriers can access Info Directions’ ASP data center via the web and the center’s thin-client architecture. The savings to the carriers, Van Grol says, is in their IT departments, which are freed from the responsibility of servicing the software.

Doing Your Homework

Because of the billing system’s vital importance, a carrier must practice due diligence before choosing vendors and installing a new system.

Aroian stresses that a carrier needs to know why they are making the change and how it will affect their business. They then need to develop a complete project plan that helps to identify all the variables, which include training, data conversion, how well documented the current system is, and what sort of customization will be needed for the new system.

Van Grol says it’s also important to do a customer reference check that goes beyond whatever customer list the vendor might supply.

“The billing vendors are going to give you a reference list that they’ve handpicked,” Van Grol says. “But a lot of these vendors are public companies; you can find out who their customer list is and survey them yourselves.”

Van Grol says the perfect customer is someone who has carefully studied his back office and can make proper decisions based on the technology set and his specific needs, and someone who will provide a realistic time frame for implementation. While he also adds that a good customer is one who knows the technology, “we would rather be working with people that know the industry first, and they’ll learn the technology second.”

Chris Garifo is operations systems editor for PHONE+ magazine.