Strategic Drivers for Billing Modernization
In the past few years, the global telecom industry has changed dramatically. Developed markets have become saturated, business models are converging, and product offerings have grown more complex as operators compete to offer customers attractive bundles of services. So operators have focused their IT agendas on consolidating and upgrading their customer-facing capabilities, to reduce customer churn and attract new customers. CXOs are experiencing firsthand role of the billing process in supporting new products and pricing models, bringing them to market quickly, improving revenue capture, and reducing costs. In a sample, Booz & Co conducted, 71% of CTO/CTOs stated Billing Transformation is one of their top 3 priorities, where as 22% said it's of lower priority and only 7% said it's of no priority. For the year 2010-2011, 82% of these transformation programs are in strategy & planning phase where as 18% of transformations are under execution.
Drivers behind Billing moving to top of the IT agenda at many telecom operators are increased product & pricing complexities, time-to-market, and opex & business risks of legacy systems. The approach to take in billing transformation will depend on operator's business requirements, technology strategy, and economic benefits to be realized. They can either take incremental evolutionary or aggressive revolutionary approach.
Above market conditions changed supplier landscape as players repositioned themselves to build comprehensive convergent billing capabilities. Traditional Billing package vendors such as Amdocs, Comverse and Convergys enhanced their product lines to include enhanced online charging capabilities. NEMs such as Ericsson are acquiring postpaid vendors to bring convergent capabilities. And global IT software vendors like Oracle (acquired Portal), SAP (acquired Highdeal) entered from familiar CRM, ERP, and BI territories to have comprehensive BSS portfolios. However market remains fragmented with Amdocs being only player with sizable market share.
Factoring following key decision drivers, operators should position themselves for one of the four very different strategies i.e. Stabilization, Stepwise differentiation, Best of suite, Lean COTS (SAAS).
1. Growth
2. Product Portfolio
3. Product Integration
4. Service & Support
5. Pricing
6. Functional Fitment
7. Functional Flexibility
8. Operational Stability
9. Scalability
10. Financial Base
In conclusion, executives must balance hard-core business requirements, technology realities, economic benefits, and distinguish careful analysis from market hype.
