Current communications providers will need to revamp their system to handle billing processes for wireless services. Thomas Tunstall, Ph.D., at KPMG Consulting LLC , explains that the revenue streams that have come from voice will increasingly shift to data. Traffic from applications data traveling through the Internet will be usage based, rather than minutes based. But telecom carriers are dealing with legacy architecture that is optimized for voice (minutes) usage and are thus, fairly inflexible. They will need new systems to be able to bill customers for downloading a video or email and other data-intensive items via wireless devices. "The old legacy systems are not geared toward that type of billing, so it's likely that there will be some pretty dramatic architecture changes for telecom companies to support the new business models," predicts Tunstall.
Time to market is a big issue for new technologies, so a lot of carriers are turning to outsourcers to provide cost-effective solutions. Tunstall reports that he has heard of multiple-year, millions-of-dollars estimates for rewriting systems -- with no guarantee of success. "So it's a fairly dicey proposition," he adds. "When you look at the older telecom carriers (like AT&T), they have been in business since the turn of the century. You can imagine what sort of legacy systems they have managed to accumulate. And although companies like Sprint or MCI Worldcom are relative newcomers, they have been in business over 20 years." Outsourcing enables the functionality the carriers are seeking and implementation is much faster than trying to redesign or rewrite legacy systems.
KPMG Consulting employs a Configure-to-Fit -- methodology, which allows companies to use newer systems by enabling individual components to be plugged into a bus messaging architecture. "One of the problems you tend to have with legacy systems," Tunstall points out, "is if you change one component in an overall architecture, it affects most or all of the others. So a change to the billing system, for example, might also impact the order entry system or interact with the work flow system or post-sale trouble ticketing system, as well as the customer relationship management (CRM) processes." The KPMG strategy creates a much more flexible architecture, allowing faster adoption of new technologies.
David Stein, director of marketing strategy at Convergys, which has already captured 41% of the outsourced billing processes for the current market of subscriber lines, believes some large carriers will "selectively buy modular software components to quickly bring in new functionality that they can integrate into their legacy environment." Emerging wireless providers, without legacy systems investment and IT staff, will find it easier to outsource the total process.
"With wireless, a very complex set of information needs to be mediated," says Stein. People will use wireless devices in different ways and several entities will be involved in providing the information traveling in the air to the devices. Companies will need to be consistent in their responses to a customer who uses a PC and a PDA and a phone call at different times in a day to access the same company.
Wireless billing outsourcers are a critical component to success in the wireless world. In an era of intense competition and deregulation of this industry, effective customer service must be delivered, but Stein believes that most companies lack the in-house expertise or infrastructure to capture and respond effectively to such complex events. Handling the complex events of user contacts through wireless, a company will need to have relationships with the companies providing wireless access to their customers, with the wireless companies and also with the Internet companies and content providers. Convergys' combination billing and CRM solution provides that necessary coalescence.
The Convergys offering integrates customer care with billing. "We think that there is a compelling value proposition where we do an integrated back office and front office solution for customer management," explains Stein. "We can bring that integrated solution to market faster for the carrier, so they don't have to go through the effort of finding a vendor for billing and finding a vendor for customer care and finding one to integrate the two. We have already linked our environment, shortening the customer delivery cycle."
Lessons from the Outsourcing Primer:
- Most companies lack the in-house expertise or infrastructure to capture and respond effectively to the complex "events" (user contacts) of wireless.
- Telecom legacy systems are not geared toward wireless billing, and time to market is a big issue for new technologies; so a lot of carriers are turning to outsourcers to provide cost-effective solutions.