Livewire: The Communications, Media and Entertainment Blog: Why don't billing systems cross industries?

Ever since I've been involved in the billing, I've seen vendors trying to break out of their initial market into other industry verticals. I can't recall anyone managing to make themselves a dominant player in more than one domain. Why can't the same billing system be used for Telcos, banks, supermarkets, water companies, car rentals, credit card companies, publishers etc

What could be the reasons for this? At its heart, billing is a reasonably simple concept, goods or services are sold at a price, taxed and invoiced. This is the basis for all business and variations like discounts and bundling still form part of the same model. All billing systems are capable of carrying out these mathematical operations and recording the data needed, so I can't think there is any issue here.

Domain knowledge could be an inhibitor; specialist terms and requirements do exist in different industries. However, with flexible data model it should be possible to map different business models and terminology into a billing system. Indeed, many vendors claim this attribute and I can certainly vouch that this is the case in the systems I am aware of. There may be an element of a communications and credibility gap, but these can be overcome by adding domain expertise to technical excellence.

Size and complexity. Historically the ability the cross industry could be constrained by the ability to process the sheer volumes of transactions. However in 2010, vastly more powerful hardware exists and vendors have spent years optimising performance to take advantage of faster CPUs and huge increases in available RAM. It should be possible to demonstrate acceptable performance for any industry. We have run proof of concepts for customers demonstrating scalability far exceeding their industry norms.

So readers, what do you think the reasons are?

Comments

From a customer viewpoint, perhaps there's a number of reasons:

1) The effort of configuring and customising a multi-industry flexible system, rather than "minor" tailoring of a product which is already aimed at a single vertical? It's a harder sell for vendors...

2) Fear of, or actual experience of, being sold "flexible", "tailorable" products which turn out to be non-performant once customised, and expensive to bend to specific vertical requirements (professional service costs, etc).

3) Fear of the new - familiar product names preferred? Not Invented Here syndrome? "No-one ever got fired for hiring IBM" syndrome?

Commented by: Louise Tolman | September 10, 2010 2:42 PM

My take from Product perspective...

1) the requirements for a billing system differ heavily when it comes to the "other" part apart from price-tax-invoice.

2) The way transactions are logged is enormously different between industries - for eg transport and telecom

3) Integration with other systems in a stack for one industry may not be similar for other industries and poses enough challenges.

Commented by: Prasanth Kumar | September 14, 2010 10:50 AM

Louise

I think your comments are fair - perhaps it is customer reluctance to embrace different solutions that remains the glass ceiling for product vendors.

On the other hand, whilst It does seems that industry practices manage to manifest themselves into data-models so that do not easily allow cross-over to other verticals, Telco billing vendors have manage to move themselves from CDR rating engines to support quad-play pre-paid, post paid convergence within a few years. I would have expected this experience to stand them in good stead.

Commented by: Ian Williams | September 14, 2010 4:52 PM

I have observed that even packaged billing applications sometimes do not meet all the requirements specified by Customers within the same vertical. I agree to Prasanth to this "other" component, which in one way may refer to the capability to bridge process and requirements variations that exists from one Service Provider to other in same or different verticals. In various product evaluation exercise that were carried on the basis of customer requirements, we have observed that one product that fits perfectly for a customer, may not fit to that extent for another customer in same vertical. Customers have started realizing this and are very concious in doing product selection. Bridiging this gap is also hard for product vendor to sell. No one prefers to do customizations over a packaged solution because of cost, performance and upgrade issues. This is one of the reason why Billing is unable to take the common space as is taken by CRM or Financials.

Commented by: Lalit Kumar Yerpude | September 30, 2010 3:17 AM