Be a Customer or Be a Product? That is the Question.

It's been a long time since I last posted an article in this blog. Things like Big Data Analytics, Real-time Detection of customer behaviour, M2M communication, smart-home, VoIP, and so forth, have been thoroughly analyzed, discussed and presented by experts all over the word. I felt like I had no value to add in all these.

What I'd really like to share, though, is an idea a very good friend of mine talked about few weeks ago. We were discussing about all large information companies (like Google, Facebook, Twitter, LinkedIn, Instagram) and the services they provide, and trying to work out the value chain and the business model behind their strategy. Naturally, I do not claim that what I intend to hereby quote is true or valid, but still remains a challenging idea.

So what my friend shared with me, is that the driving force behind those companies strategy to offer innovative services to the mass customers for free, is the fact that me, you, all of us, we are not really the customers; on the contrary we are merely the products.

The use of the services generates enormous amounts of information. The core technology of the companies in question has to do with information processing, therefore based upon this information those companies actually profit.

It's a scary thought to realize that you are just a product; It's even scarier to think that all your data exist in the cloud and that you don't actually have the total control over it.

Yet, these pioneers empower us with the use of high-tech services such as cloud storage, Navigation Maps, Translation services, Web Stores, Document management, email, etc. Services, that eventually we cannot imagine living without, which is equally scary.

Finally, it is also spooky to realize that our imagination is just not enough for us to foresee what will happen and how things will evolve in the next few years, whatsoever.

 

F2M: What's the fuss about?

Allow me to share with you my thoughts about Fixed to Mobile convergence and its impact to billing systems and processes.

It’s true that F2M is a trend being imposed by both cost reduction and customer experience dictate.

Cost, under these tough economic circumstances, is a key factor for the survival of all telecommunication operators; a convergent system such as the billing or a technology platform like the IMS is surely a step towards the right direction, since a single convergent system means lower maintenance and operational costs.

On the other hand, end user’s device convergence constitutes a must that all operators owe to respect and comply with. Nowadays, the customer wants to experience all services through a single device; fixed or mobile, voice or data all provided through his tablet, laptop or cellphone. Furthermore, customer wants to get a single convergent invoice for all his services irrespectively to the devices used.

Consequently, there are apparent reasons for the telecom operators to seek for F2M implementations; especially for F2M billing solutions.

But, the thing is, that billing systems are already prepared for F2M convergence. They already support multiple services rating, multiple services billing, multiple services invoicing, and of course discounting schemes that share common buckets across multiple services; even the Prepaid to Postpaid convergence is currently fully supported.

So, what’s all this fuss about? If the systems are ready, the devices already offered and the customer experience constantly showing the way, what is the underlying force behind these admittedly very interesting discussions and debates regarding F2M?

Well, to my opinion, the issue is (as it always was) the customer himself. A F2M implementation usually implies the merge of two typically different companies: The cumbersome incumbent fixed telephony operator and the lean and agile mobile operator. Both operators usually have large (and dirty) customer bases with multiple services. Hence, the problem is to identify the customer: his fixed as well as his mobile instance. And then, to carefully clean and successfully migrate all his relevant data into a single unified instance. Last but not least, to generate the convergent invoice.

Bottom-line, customer identification and customer data migration is the critical factor for the F2M venture to successfully complete. It is neither the technology nor the system capabilities that would make the difference, whatsoever.

Billing: From the End-Customer to the Partner

• Retail Billing:
  Retail Billing is the process of collecting usage, aggregating it (for charging purposes), applying required usage charges and service rental fees and potentially discounts and interests and finally generating invoices for the customers. This process may also include receiving and recording payments from customers and allocate those payments against open invoices according to specific allocation rules.
• Interconnect/ Wholesale Billing:
  Whilst Retail billing deals with end customer rating, billing & invoicing, wholesale billing deals with the billing process of the following entities depending on the situation and the nature of business:
• Resellers associated with telecom operators, such as Content Providers, Broadband Resellers etc.
• Interconnect partners for providing interconnection in order to enable end customers make calls to OLOs (Other Licensed Operator) customers.
• Roaming partners for providing services to their customers when they roamed in OLO’s coverage area.
• In case when many partners are actually involved (multilateral agreements) in the value chain of a service provision, the revenue sharing model may also be used.
• Partner Relationship Management:
  PRM constitutes a broader concept than billing itself. It’s a platform that actually supports service providers in complex relationships with partners/suppliers and provides core features such as agreements management (SLAs), regulated services support (LLU, WLR), dispute management, routing optimization (LRC, ASR), reconciliations etc. Apparently, such a platform is extensively integrated with the selected billing system.

Minimum Level of Itemization: The Basics for Fixed Telephony

According to the Regulatory Authorities, there are two levels of information of charges provided with an itemized bill; the minimum level of itemization and the enriched minimum one. Both are offered for free by the Telecommunication Operators.

The Minimum Level of Itemization (MLI)

As far as the fixed telephony is concerned, the minimum level of the itemization includes the following mandatory information:

• The Outstanding Balance (i.e. the balance of the account stemming from the previous invoices) 
• The Recurring Charges (i.e. standard fees being paid on a monthly basis) 
• Aggregated information for the prepaid usage within a recurring charge, i.e. information about the calls included into a recurring fee paid in advance, such as: 
• Total number of calls 
• Total actual duration 
• Total billed duration 
• Call Category (on-net local, on-net long-distance, international, mobile, off-net fixed, incoming & outgoing roaming calls, short-digit calls etc)
• Total number of calls per Multimedia Content Provider for providers being served by the Telecommunication Operator’s network, or per Network Provider for calls towards providers being served by Other Licensed Operators (network providers).
• On the same page, there must be a footnote indicating the fact that the total billed duration is often different from the actual one, due to several tariff characteristics like the minimum charge or the charge step; for example 20 second minimum charge even if the call duration is 5 seconds or charge per minute even if the call duration is less or greater than integer minutes. In the case of a modification of any of the aforementioned tariff characteristics, the changes must be explicitly depicted upon the invoice, i.e. the unit prices before and after as well as the exact date of the change in question. 

• Aggregated information for usage outside the prepaid usage, i.e. information about calls not included into a recurring fee paid in advanced, such as: 
• Total number of calls 
• Total actual duration 
• Total billed duration 
• Call Category (on-net local, on-net long-distance, international, mobile, off-net fixed, incoming & outgoing roaming calls, short-digit calls etc) 
• Total number of calls per Multimedia Content Provider for providers being served by the Telecommunication Operator’s network, or per Network Provider for calls towards providers being served by Other Licensed Operators (network providers). 

• Detailed information regarding any financial discounts or penalties applied, such as the service activation fee, the service disconnection fee, the outgoing call barring fee, the Call Line Identification Presentation fee and other debit or credit adjustments.

The Enriched Minimum Level of Itemization (EMLI)

As far as the fixed telephony is concerned, the minimum level of the itemization includes all the previously mentioned information and on top of that the following mandatory details:

• Detailed  information for the prepaid usage within a recurring charge, i.e. information about the calls included into a recurring fee paid in advance, such as: 
• The itemization of the calls, the duration of which exceeds the 2 minutes time. This itemization includes the following information per call:

• The called number
• The date & time stamp of the call
• The exact time when the call started
• The actual duration of the call, referring to the footnote with respect to the billed duration
• Call Category (as previously defined)

• Aggregated information for chargeable calls with billed duration less than 2 minutes time (total number of calls, total actual & total billed duration.) 
• Detailed  information for the prepaid usage outside a recurring charge, i.e. information about the calls not included into a recurring fee paid in advance, such as: 
• The itemization of the calls, the charge of which exceeds the 10 eurocents VAT excluded. This itemization includes the following information per call:
• The called number
• The date & time stamp of the call
• The exact time when the call started
• The actual duration of the call, referring to the footnote with respect to the billed duration
• The charge of the call
• Call Category (as previously defined)
• Aggregated information for chargeable calls with charge less than 10 eurocents (total number of calls, total actual & total billed duration, total charge.) 
• Itemization of calls towards Multimedia Content Providers irrespectively of charge. In this case, the name of the Multimedia Content Provider for providers being served by the Telecommunication Operator’s network, or the name of the Network Provider for calls towards providers being served by Other Licensed Operators (network providers), must be clearly specified.

Other Additional Information

• All subscribers will receive the MLI, unless they explicitly state otherwise
• The provision of the EMLI will take place only upon subscriber’s request
• Primarily, both MLI and EMLI will be provided in a paper form along with the subscriber’s invoice. The subscriber is allowed to ask for their provision in an electronic form; for example the subscriber may very well wish to get the information through his/her e-mail or by accessing Operator’s site using the appropriate credentials (user_id & pin).

Who owns the customer?

Whom does the customer belong to? Where should the customer information reside to? Which is the primary IT system wherein the customer details are kept? Is the CRM the customer master? Is it the Billing? Is it the AR? Or is there the need for an independent IT system, exlusively oriented towards the customer details management? What about the so-called Customer Hub?
Imagine the case where a billing system must execute a billing cycle and produce invoices that will be sent to the customers. There is definately the need for a customer base to lie within the billing system.
For large Telcos with diversity in their activities there are customers that do not fall into the traditional telco customer category. For example, there are customers that may proceed with an one-off transaction with the Telco and for that transaction they should get an one-off invoice typically generated by an AR system.
Consider a consumer belonging to some other licenced operator (OLO) taking advantage of a merchandise offer that your telco launches (e.g. a cellphone or a fixed-line phone or even a modem/router). This is an one-off transaction that doesn't constitute a relationship. Therefore, a typical CRM should not be aware of this potential customer, not until it becomes one. But again, in order to build a relationship you most probably need an IT system to manage leads and opportunities, so bottomline you will need to keep the customer details in order to incorporate them into a lead & opportunities list. This is clearly a CRM task. And as such, it definately makes one think that CRM should be the customer master.
Now, consider for a moment that you are a financial telco guy. You don't give a penny for sales leads, offers and other commercial jargon. The only thing you want to know is the account balance of the customer, his debt, his credit worthiness. You most probably think that the world would be a better place to be, if there was a Financial hub that would maintain all customer financial transactions. And again, such a hub will have to somehow host and manage the customer entity.
Now, imagine that your telcos data are old; very old. They are initially born at those ancient times, where IT systems & business processes where subscription-oriented and the concept of customer was totally unknown; multiple unconsolidated customer instances spanning across multiple IT silos; poor data quality; insufficient customer feedback; synchronization problems; business analgesia; In this nightmarish case, you most likely need a customer hub that will consolidate all those sparse customer instances & keep this consolidation alive when a new customer instance is entered by the user, clean the customer data & keep them clean, apply rule-based modifications and propagate the changes towards the necessary IT systems according to pre-defined, business-originated criteria.
To conclude, traditionally, CRM is considered to be the customer master; and frankly it must be, this way or another. But legacy systems & processes impose the need for a customer hub. Such a hub, architecture-wise, is part of the CRM system. Or at least it should be.

Billing In Focus: Should Receivables Management be part of a Convergent Billing Solution?

Once upon a time, I took part in a very interesting conversation about next generation trends regarding billing and ERP solutions. During this discussion, the billing expert interlocutor claimed that both prepaid to postpaid and fixed to mobile convergence are and will continue to be the major issue for the near future. He also foresaw the expansion of IT in order to incorporate the capabilities of the Intelligent Network, as well as the opportunities that will arise for the Telecommunication industry from the micropayments and the cloud services.
On the other hand, the ERP expert alleged that the major issue for the years to come will be the extended implementation of the RFID technology in the Supply Chain ecosystem, and the consolidation of all ERP platforms accross the multiple business entities of the large european groups of telecommunication companies.
Well, although I found all these hot topics very interesting at the moment, I had the idea of asking a really common question: What would actually be the future for the Accounts Receivable area? What would they really think about the future trends of the Collection management, Bad Debt administration, Price Plans capabilities, Overdue Interest Management, Credit Scoring and so forth.
I was suprised when the billing expert said that the AR capabilities were not actually part of a convergent billing solution, whereas the ERP expert insisted that for the telecommunication industry AR is commonly part of the billing solution.
It seems that AR is a grey zone, although receivables are one of key elements of revenues, and IT systems capabilities are supposed to enhance revenue management and bottomline EBITDA.
To me, Convergent Billing Solutions offer  Revenue Management capabilities which go beyond the traditional billing field.
Furthemore, Revenue Management makes use of rich, detailed billing data to support Revenue and Credit management business processes.
Also, increased Customer insight can be leveraged to personalize Credit/Revenue Management processes.
Nevetheless, for large Telcommunication Operators with diversity in their activities (such as incumbent operators), a seperate distinct AR outside the billing could be the financial hub, as there are customers that do not fall into the traditional telecommunication customer category.
Moreover, Convergent Billing additional AR modules often need serious customization in order to meet Telcos specific needs.
And just to be on the right side: according to some IT strategies, Best-of-Breed & Best-in-Class applications are not always part of a Convergent Billing Solution.

Intelligent Network Services

The purpose and the philosophy of an Intelligent Network System (IN) is to add more intelligence and control over the telecommunications network in a centralized manner. In other words, IN is the central system that:

• accommodates the logic of the various IN services being provided through the network
• controls the provision of those services

Consequently, IN offers centralized intelligent telecommunications services minimizing at the same time the cost of ownership, implementation and changes of those services.

Some of the main IN services are listed below:

• Freephone
  Through the use of this service, a fixed-line user can call a non-geographic number (typically 800xxx) without being charged. He or she can call this number from anywhere within his/her country limits for free, whilst the actual cost of the call is charged to the number owner (i.e. a company).
• Onephone
  Through the use of this service, a fixed-line user can call a non-geographic number (typically 801xxx), that belongs to a company. The user is always charged with the cost of a local call, whereas the number owner is charged with the difference of the cost between the long-distance and the local call, if applicable.
• Premium Rate
  By calling a non-geographic number (typically 901xxx, 909xxx), a fixed-line user obtains access to content-based or other premium rate services.
• Televoting
  A fixed-line user calls a non-geographic number in order to participate in a voting process.
• Short Digit Menus
  The user calls a non-geographic number (typically 1xxx) and follows IVR instructions in order to get help or information (something like the white pages, or the trouble ticketing service)
• Prepaid Card
  The user uses a prepaid card to make a call from a fixed or mobile device.
• Virtual Card
  The fixed-line user through the use of his account credentials can make a phone call from practically any fixed-line device and receive his charge in his postpaid bill.