NEW YORK-With at least several hundred billing and customer care systems providers out there today, wireless carriers, especially new players, are suffering an embarrassment of riches. The trick is to separate out the gold from the pyrite.
The playing field has broadened on both supply and demand sides, as open architectures on the software side race to accommodate the burgeoning number of wireless carriers that deregulation has brought to communications.
“There are a handful of major players: American Management Systems, GTE Telecommunication Services, Cincinnati Bell Information Systems,” said Peter Grambs, a principal of Booz-Allen & Hamilton Inc., New York. “There are also many more package suppliers than there were five to 10 years ago that offer more feature-rich systems; but the disadvantage is they’re newer and not as production tested, and [the systems] have less volume capability.”
The large, computer mainframe-based systems are capable of handling millions of customers and are operated using keyboard strokes. The newer, smaller systems work off of UNIX open system client servers, built to industry standards, and employ point-and-click operation. They are easier to interface with new programs and they are more adept at performing functions like flexible rate plans and convergent billing for a variety of communications services. But their capacity for handling volume is unproven, despite claims by some to the contrary, Grambs said.
There is an old joke about an airline pilot who announces to passengers that he has good news and bad news to tell them. `The good news is we’re making great time. The bad news is we’re lost.’
Making haste slowly is an essential first step for wireless carriers anxious to get on quickly with evaluating the technical specifications of different package billing and customer care systems.
“The key criterion, the make-or-break approach, is to have a clear and well crafted idea of the company’s vision and business plan,” Grambs said. “Is customer care most important or providing low-cost service? Do you expect to have high-volume growth or slower paced growth? Will you offer multiple services or have primarily a one-service focus? Do you want to be quick to market with new service configurations and rate plans, reacting quickly to competition?”
The next step is the determination of what kind of platform a carrier wants and a price range. It’s possible to purchase a very simple billing system for under $100,000. For a few million dollars, a small startup with fewer than 100,000 customers can get something reasonably complex. At the other end of the spectrum, a giant telecommunications conglomerate like Deutsche Telekom AG is spending half a billion dollars to buy a big system with many bells and whistles.
On a per-customer basis, billing and customer care systems don’t follow the rule of thumb about economies of scale and volume discounts.
“Smaller systems may actually cost less per [customer] unit because higher volume carriers have more business requirements,” Grambs said.
Amid the growth of software suppliers and wireless communications providers, Booz-Allen said it has found in recent years a market niche for itself bridging the disconnect between the availability and the understanding of information about off-the-shelf billing and customer care systems.
“The reason we’ve gotten into this evolved from two converging events two or three years ago,” Grambs said. “Having worked with services [companies], we knew that customer care would be a key differentiator, so we decided to take it on as a focus area. And a number of our telecom clients asked us to help them assess their needs and select a billing service.”
Since then, the consulting firm has built up and continues to update a data base of available providers. New vendors continually are entering the market. Existing vendors continue to update their capabilities.
“One of the interesting things about this area is that, at a high level, it isn’t difficult to understand generally,” Grambs said, “but the devil is in the details.”
Most of the package providers today offer a set of core technological capabilities: call waiting, order activation, customer care, billing, accounts receivable and collections. But each may perform one or several of these core functions better than others in its basic package.
“There are always tradeoffs and that’s where prioritizing by carriers comes in,” Grambs said. “As a rule of thumb, a carrier will need to enhance about 30 percent of a company’s core technology because every one in the telecommunications industry is unique. One of the key (selection) criteria is are they (the software providers) willing to enhance their core.”
Specialty functions like real-time rating so calls can be billed immediately as they are completed can be added as third-party packages. Key to executing the add-ons successfully is how well both the core technology and the peripheral functions interface with each other.
“That’s where the issue of open architecture comes in,” Grambs said. “Key areas of concern are whether these systems really are upgradeable, modular, scalable and open.”
A third and equally important evaluation category can be termed one of vendor risk, and it entails investigation of questions like: How long has the company been in business? What is its primary focus? Are there other lines of business it engages in that are more important to it? What level of technical support does it provide its customers? Are its cost estimates accurate or does the company have a reputation for cost overruns? Does the company’s system work well in actual use out in the real world?
These are questions that need to be answered by existing customers of the company. “It’s funny, but a lot of (carriers) miss that,” Grambs said.
