Another nail in billing's coffin

As featured in TM Forum's Inside Revenue Management newsletter
The news that Convergys has divested itself of its billing and client support services is another in a long chain of similar divestments that send mixed signals on the future of billing as we know it.
Japan’s NEC is reported to have spent $450 million to buy the business support operations of Convergys, including Geneva, which it previously paid $650 million for.
Convergys competes at the top end of the billing market and had been viewed as an acquisition target after the company mentioned the possible sale of itself, or of certain assets, in a strategic review conducted in 2010. NEC will absorb the customer care and billing parts for companies in the United States and Europe into its subsidiary and other acquisition, NetCracker Technology.
This follows the acquisition of other billing entities – Intec by CSG Systems; Kenan firstly to CSG then to Comverse; LHS to Ericsson, HighDeal to SAP; Portal and eServe Global to Oracle, plus a slew of other smaller deals over the last 10 years. One common feature is that values for big billing systems are dropping and their purchase appears to more about customer acquisition rather than technology advancement. Those same systems that replaced legacy billing systems years ago, during the height of the convergent billing boom, appear to have become legacy systems themselves.
All these acquisitions have one thing in common – billing is being rolled into much broader platform offering rather than being sold as the standalone, center of the universe, set of crown jewels it once was. We don’t seem to be hearing about big investments in billing software development either and it begs the question, yet again, that billing as we know it may be dying.
Attendees at TM Forum's recent Middle East Summit were left in no doubt when QTel Group CIO, Eugen Schulz, outlined his views on the future of billing. He called it convergent real-time billing which he defined as the harmonization, standardization, consolidation and optimization of charging and billing functions. These he saw as powerful, highly scalable rating and charging engines but not necessarily catering for complex billing functions.
His NextGen billing platforms consisted of content-based charging able to price products and service bundles (including unlimited and tiered data) that require simple “bean counting,” as he put it. He felt that there would be a focus on few key events to handle in the billing domain and that many billing functions would move into the CRM and ERP domains. He even gave it a catchy title, the “dis-integration” of billing.
Eugen happens to be at the helm of the fastest growing telecommunications group in the world, and comes there with a lifetime of experience from previous iterations with European telcos, so he should know what he’s talking about. But what does it actually mean and where are we headed with this ‘dis-integration’?
It can’t be denied that the concept of customer master data repository is under threat. Unwieldy CRM projects that were designed to store everything a customer was subscribed to or had purchased are no longer in vogue. Their cost, maintenance and sheer bulk have made them unattractive. The concept of a billing system storing non-financial customer data or being used as a centralized collection and storage point for multiple billing and charging systems is also losing support, as Eugen rightly pointed out.
The fact that customer data is now spread over multiple app servers, delivery platforms, pre-paid and online charging systems is not an issue when you can theoretically access any of those systems, on the fly, and extract the customer data for presentation via a web browser in milliseconds. Policy management systems now store the ‘rules’ and they can do so from a system-wide perspective for rating and routing, through to customer level for personal billing preferences.
So, what do we need those big billing systems for anyway? Well, enterprise billing for a start. The unique presentment requirements for corporate reporting and complex discount structures are still best handled on them today – but for how long?
As another delegate quaintly put it when discussing retail customers, “they fall into one of two categories – pre-paid and unpaid!” The latter presumably makes no sense to keep, so how long before the inevitable OCS/prepaid/policy combination takes over to cater for all customers?
Tony Poulos is a market strategist at TM Forum