For example, billing is certainly no longer an ugly duckling as businesses now recognize its strategic importance, both because it provides the revenue and it can deliver competitive advantage in customer service and satisfaction.
Convergence is the single-biggest driver in this transformation. Offering services such as mobile TV, quad play, interactive gaming and Web 2.0-style social networking increases the pressure on billing, customer care and other back-office functions. Billing systems should be able to charge for any type of service and in a way that is acceptable and understandable to the customer.
Traditionally, service providers have tended to set up dedicated systems for each new service: subscriber and service data have been held in disparate, closed systems.
This "˜silo' approach is no longer viable as differentiating triple- or quad-play services demands the ability to bundle services and offer cross-service discounts.
Already, there is a trend for operators to move to convergent billing and charging systems capable of handling this increasing complexity.
The pressure is on
Billing and other back-office systems must be flexible. Operators should be able to apply discounts across products and services to provide incentives to subscribers and reward particular usage patterns.
The system must also accommodate different pricing and billing structures - flat rates, pay per view and subscription services, and any mix of these - often involving the same customers. Individual customers may well pay for different features in different ways, choosing post-pay or pre-pay options. Real-time charging will be critical in managing this, minimizing risk and ensuring that usage is billed correctly.
As operators offer a greater range of third-party services, their debt exposure also increases. Subscribers should be warned in advance when their credit is running low, and access to services barred as soon as credit runs out, rather than allowing an unsupported debt to build up.
Real-time capabilities are also vital in other areas, such as authorizing services as part of the service delivery process, handling online transactions and settling payments.
There is similar pressure in the area of partner relationship management as a result of the growth in third-party content. Content providers should be seen as true partners, not merely suppliers, and having efficient systems and processes is critical to a satisfactory working arrangement. This requires the automation of tasks such as partner settlement, which will become too complex for operators to handle manually.
Automation will help ensure that advertising, commerce and content partners get their fair share of payments, while eliminating possible sources of revenue leakage. Revenue assurance is an integral element in building the mutual confidence that is central to stable, profitable partnerships.
Business support systems (BSS) should also make it easy for operators to try out new services among a group of customers without committing to a costly full-scale launch among the entire user base. If the test proves successful, the services can be rolled out and supported by the back office, quickly and easily.
Overcoming "˜silo' architectures and processes - and tightly integrating all the business systems - will be critical to this, as will be well-trained call center staff equipped with the right tools to manage complex issues.
Front- and back-office integration
Convergence not only affects billing and other back-office systems but also the associated customer service operations.
Call centers and their agents are critical to success in supporting an organization looking for long-term success, offering a growing range of services.
All too often, agents are held back by a highly fragmented picture of both the operator's business and its individual customers. Customer and product data is often held in separate systems. Agents have to switch between systems when responding to customer calls, often manually noting down information from one and entering it into another system. These different systems are actually only connected by the skill of the agent; a slow laborious process that is unsatisfactory for customers and costly for the operator.
What's needed is a complete view both of the services available and of the customers. To be effective, agents must be able to see into all systems at the same time and not have to ferret for information.
Customer data should be centrally accessible, with information such as product data, lifecycle information and product business intelligence incorporated into it.
The key is knowledge - integrated, accessible information on customer history and services subscribed to, delivered in a clear and transparent manner. This makes it possible to raise the bar in customer service and focus on strategic areas that can transform the business performance.
At the heart of this is the McKinsey-developed customer lifecycle management (CLM) approach. Part of this approach is to identify and develop customers who represent the greatest long-term value to a business, also referred to as customer lifetime value optimization (LTVO).
It builds on the opportunities created by well-integrated back- and front-office systems and the relevant targeted information provided to call center agents to increase customer value. Rather than just reacting to problems when they come up, automated systems based on LTVO can make agents more efficient and allow them to be more proactive when dealing with customer queries. The cost of care can then be reduced and revenues boosted. This also has the potential to improve the overall customer experience and so increase customer satisfaction and loyalty.
A lifetime of revenues
By implementing a lifetime value-led approach, businesses can respond proactively to their customer needs and problems - identifying those with a particular buying pattern and making appropriate early offers and providing an early warning to potential problem areas.
LTVO exploits the successful integration of BSS, drawing on a wide range of data sources, including real-time analytics, to identify the most profitable customers and target them more effectively. This helps reduce churn, raise average revenue per user and adjust care levels based on their likely lifetime values.
LTVO also enables operators to respond to issues as they occur, often heading off situations that may result in a lost customer. Rather than waiting for subscribers to call in, technologies such as real-time policy management can be used to detect and flag problems to the call center. An agent can then contact the customer to resolve the matter before it becomes a bigger issue.
The emphasis on lifetime value enables the organization to focus its best efforts on those that represent the greatest value potential. This makes it possible to make the right offers to the right customers at the right time.
Convergence creates many business opportunities for operators. However, to get the most from these, it is vital to streamline and integrate the front and back office. Not only will this support the convergent business more effectively, it will also help put the operator ahead of its peers.
Alastair Hanlon is director of innovation strategy at Convergys