Should Telcos replace, enhance, upgrade or outsource their billing requirements?
Technological advances, new marketing trends, growing customer expectations and changing operational methodologies is the new face of the telecom industry. However the recent global recession has compelled the service providers to cut short their budget on billing projects.. While some smaller Telcos cancelled the projects, some tier 1 operators either postponed the projects or found stop gap arrangements by bolting existing solutions. This short term vision kept the Telcos floating but resulting in huge losses. Can this be neglected? The answer is no? Why?
With ever evolving technology like increasing shift to packet based technologies, innovative prepaid services, near real time rating services, hybrid services (post paid and prepaid services combined), increased value added services (VAS) etc resulting in a significant increase in the data volumes. This move of Telcos to business models based around revenue sharing within the value chain means they need billing systems which can handle revenue sharing billing more effectively. The interconnect billing between Telcos has become increasingly important and, in some cases, can now represent up to 60 per cent or more of an operator's costs. Telcos cannot merely rely on data coming from partners' billing systems and their invoices. A small miscalculation by the billing party can make a difference of millions of dollars. Operators must look to implement their own interconnect billing systems to get control over the inter-operator settlements.
To cope with these requirements, I can think of the following strategies that the service providers can adopt:
Upgrade existing billing systems to handle future requirements - Since this strategy implies building on old concepts and foundation, it won't offer the flexibility required for new age billing requirements. The small or medium operators who do not plan to launch frequent new products/services can adopt this approach.
Replace existing billing system with new system - This would build the path for functions needed to run the business in future and reduce operational costs. However, this can be a costly, risky and lengthy process as the benefits will be reaped in the future. Operators having aggressive growth plans, risk taking capabilities and dream to roll out innovative products/services can adopt this approach.
Integrate add-on functions or new modules on existing system - This requires either in-house development or engaging third party vendors. While this approach provides some flexibility and relatively quick results, it will increase the complexity of the system - particularly the integration challenge - and can add considerable processing overhead. Medium or large operators having existing plethora of home grown bespoke systems and posses technical expertise for in-house development or ready to outsource the new development to external vendor can adopt this approach.
Outsourcing some or all billing functions or processes is a strategy adopted by start-ups who need to get systems in place quickly and for virtual Telcos, who do not have their own network but concentrate on customer relationships and who frequently lack the in house technical expertise to run billing systems themselves.
