magnus lindgren, vice president business development, sergel/teliasonera convergent experiences from...
TRANSCRIPT
Magnus Lindgren, Vice President Business Development, Sergel/TeliaSonera
Convergent Experiences from Outsourcing –
A viable alternative to in-house billing?
Agenda
Introduction Background - Convergence
Implications on the billing environment The service bureau perspective
Transition strategy Augmentation Two alternative models
Case 1 – Downstream model Case one: TeliaSonera
Case 2 – Upstream model Case two: Fortum
Conclusions
Sergel – TeliaSonera Sweden A billing service bureau (€39M / €9,5M) Wholly owned subsidiary of TeliaSonera 215 employees, headquartered in Stockholm Target customers are Operators, SP:s,
MVNOS and utilities Currently doing rating and billing services
for Telcos and SP:s like Chess, BT, Vodafone,
Eniro and TeliaSonera Vast experience of migrations from most of the
major systems on the market
””Outsourcing isn’t your ordinary Outsourcing isn’t your ordinary marriage. If anything, it’s like a marriage. If anything, it’s like a
marriage between two parties who marriage between two parties who both have been married before and both have been married before and both have kids from their previous both have kids from their previous
marriages! ”marriages! ”
Free translation of Swedish quotation
Magdalena AugustssonViveca Bergstedt Sten
“Outsourcing av IT-tjänster”
Agenda
Introduction Background - Convergence
Implications on the billing environment The service bureau perspective
Transition strategy Augmentation Two alternative models
Case 1 – Downstream model Case one: TeliaSonera
Case 2 – Upstream model Case two: Fortum
Conclusions
Modularity – The key for transition to convergence
In replacing the “parallel monoliths” – Don’t replace them with a new monolith
Instead, replace them with a modular environment consisting of best of bread
Often, people think that convergence means doing all billing in one billing system – True, But….
From Multiple Monoliths to Modularity
Mediation
Rating Billing A/R
Mediation
Rating Billing A/R
Mediation
Rating Billing A/R
Fixed
Mobile
Internet
PriceLists
Prod.Catal.
Cust.Data.
PriceLists
Prod.Catal.
Cust.Data.
PriceLists
Prod.Catal.
Cust.Data.
Mediation
Rating Billing A/R
PriceLists
Prod.Catal.
Cust.Data.
FixedMobileInternet
FixedMobileInternet
FixedMobileInternet
FixedMobileInternet
Why is modularity important for convergence?+ Best of breed+ Stand alone systems are built from the ground up to work in any environment+ Easier to achieve convergence+ Easier to integrate+ Easier to upgrade and replace modules What car would you chose?
ALT 1
A car from Skoda
Tires from Skoda
A CD-player from Skoda
Fuel from Skoda
- Several technical platforms may be required- Not many products are real stand- alone products that supports this idea
ALT 2
A car from Ferrari
Tires from Michelin
A CD-player from Pioneer
Fuel from Shell
Business requirements on the billing services
Outsourced (The Service
Bureau)
Modular design Customers entering and leaving the
process where they want to
Convergence Limit the number of systems
Ease of change to rules Multiple customers with different
requirements and new services
Enable short-term and ad-hoc
relationships
New data sources New customers – different formats
New customers – New data types
In-house (The IT-department)
Modular design Ability to change and replace systems
without replacing the whole
infrastructure
Convergence Ability to benefit from offering the
customer different services
Ease of change to rules Ability to launch new products, services,
discounts and price plans
constant stream of change requests for
the BSS systems
New data sources New product lines – New businesses
The billing requirements on the Service Bureau
Outsourcing – Short Summary
You can Put your efforts on the parts of the value chain where you’ve got your
competitive advantages
A good service bureau offer of today does not mean a lot of hidden development costs
Lower investment costs and tied capital
Increased control over costs
Service Level Agreement
Access to expertise
The outsourcing paradox… Are you outsourcing the right functions? Loss of core competence Invisible costs
Does the partner REALLY listen to you Decision may influence your company culture Sometimes it’s as difficult to be a competent buyer as it is to perform
the tasks in-house…
The Pros
The Cons
Agenda
Introduction Background - Convergence
Implications on the billing environment The service bureau perspective
Transition strategy Augmentation Two alternative models
Case 1 – Downstream model Case one: TeliaSonera
Case 2 – Upstream model Case two: Fortum
Conclusions
Transition through Augmentation
Q What’s the definition of a “legacy” system?
Q How do you leverage all the invested money and thousands of man-months invested in the legacy systems?
A With Adjunct Solution Components.
A A system that is: Installed Working Paid-for Fully Interfaced Users Trained IT Trained
Mediation Rating Billing Accounts Receivable
FACT: We won’t get rid of the legacy systems in the blink of an eye
What is Augmentation with an ‘Adjunct’ Solution? Allows the operator to leverage a significant portion of its existing infrastructure. Adjunct solutions are also known as ‘legacy transformation’ solutions.
Rather than replacing the whole infrastructure, an adjunct solution uses this infrastructure to better support existing processes on the road to convergence
UnbilledUsage
NetworkElements
UsageRecords
Mediation Rating
RatedRecords Bill
Preparationand
Generation
Billing System
CustomerAccounts
TariffsOther
BusinessData
RatedRecords
stand-aloneRater
Example:Augmentation with adjunct rater
Augmentation as a convergence transition strategy
Very Long
Very High
High
High
High
Very High
Long
Medium
Low
Low
Very High
Medium
Short
Low
Low
Low
Low
Low
Option 1Forklift
Replacement
Option 2IncrementalModification
Option 3Augment with Adjunct solut.
Area of Impact
Duration
Cost
User/IT retraining
Disruption to proven business processes
Risk to current revenue stream
Overall Risk
Strategic Buyer Business Benefit
Chief Financial Officer
VP of Marketing / Pricing / Strategy
VP of Operations
VP of Development
Good for Whom? – The Strategic Buyers
Leverage Existing OSS Infrastructure Low impl.cost / Improved Cash Flow Future Reduced Operational Costs
Enabled Rapid New Product Creation Create Products That Can Not Immediately be Replicated by Competitors Reduce Time to Market for New Products Reduce Competitive Response Time Sensible way to renew the environment Future Reduced Operational Costs
Better Support of Internal Customers Time to Market for New Products
Two cases…
2. The upstream model:Implementing convergent billing
through a bypass
1. The downstream model: Implementing convergent billing through a billing distribution
layer
Agenda
Introduction Background - Convergence
Implications on the billing environment The service bureau perspective
Transition strategy Augmentation Two alternative models
Case 1 – Downstream model Case one: TeliaSonera
Case 2 – Upstream model Case two: Fortum
Conclusions
Case one – The downstream model To keep up with the smaller and faster competitors, TeliaSonera
needed a fast solution for convergent billing New Geneva convergent billing system expected to be
implemented no earlier than within 24 months Sergel introduced the Billing Distribution Layer (BDL)
One invoice to thecustomer
New Print-file
Print-file
Print-file
Print-file
Med. BillingRating
Consolidation of print-streams
Fixed
Internet
Mobile BDL
The downstream model - ChallengesCreating one invoice from three print-files
Different formats (said to be impossible)! Mobile print-files in line-data
Fixed- and Internet print-files in AFP-format
File Converter proved the opposite!
Read and Interpret the formats
Normalize the formats A/R Data will be wrong!
Unable to match customer payments and A/R data
Create A/R file based on the
convergent invoice Suppress the old A/R-files
Self Care and Customer Care will se the
wrong invoice and the wrong data! Send convergent invoice to viewer
Suppress the old invoices
Customer identifier different in different
product lines Hard to know what subscription belongs to the
customer in the mobile-, fixed and Internet world
A common identifier must be
selected In this case, the social security- or
organization number
The technical solution
OrderSystems
BillingSystems
TeliaSonera
A/R
TeliaSonera
G/L
View Direct(view
invoice)
BILLIONAIREBilling
INOBIZFile
ConverterInterpreter
Acc
ount
ing
Acc
ount
ing
Acc
ount
ing
Fix
ed P
rint-
file
Mob
ile P
rint-
file
Inte
rnet
Prin
t-fil
e
Convergent Print-file
A/R
-file
A/R
-file
A/R
-file
RecalculationF
ixed
Bill
ing
Mob
ileB
illin
g
Inte
rnet
Bill
ing
Reassembling
Reassembling
Recalculation
Inter-pretation
Enhanced downstream model
The invoice specification file contains an out print of rated CDR’s A modern rater working regardless of transaction type can
recreate the transactions from the specification file, enabling: re-rating according to a new pricelist creation of new discounting balances as a basis for new offers cross product discounting and bundling
Applying business logic to the Billing Distribution Layer
The downstream model - Pros and Cons
No changes to the existing BSS environment Can be implemented immediately (3-6 months)
Extremely fast and simple way to convergence and still…
…Some long term benefits With a more flexible distribution interface you can expose your
printing partners to competition
No new interfaces to Reference Data sources All you need is in the print-files!
No major investment costs
Also allows for several accounts on one invoice
It’s more of a “stapler-solution” than actual convergence Bringing three invoices together is just administration Doesn’t necessarily support bundling, Cross Product Discounting etc
The invoice isn’t the only output from billing… A/R – files, G/L – files, Accounting and CRM interfaces need to be handled
The downstream model - Pros and Cons
The only cost saving Is going from many invoices to one
Some limitations: Preferably all convergence clients in the same bill groups (3 monthly
and one quarterly)
Customer need to be marked in all Customer Databases
Difficult if one invoice is incl. VAT and one is excl. VAT
Agenda
Introduction Background - Convergence
Implications on the billing environment The service bureau perspective
Transition strategy Augmentation Two alternative models
Case 1 – Downstream model Case one: TeliaSonera
Case 2 – Upstream model Case two: Fortum
Conclusions
Case two - The upstream model
None of the Fortum rating and pricing engines were able to
rate all the transactions from the new product lines Fortum were therefore unable to derive the competitive
advantages from it’s broad range of telecom and utility products Sergel introduced the adjunct rater as a service bureau
One invoice to thecustomerPrint-file
Mediation BillingRating
Fixed
Other
Internet
AdjunctRater
The technical solution
Self Care
BILLIONAIREBilling & CRM
Rating
Fix
edM
edia
tion
Inte
rnet
Bill
ing
Mob
ileM
edia
tion
Rated CDR’s
Internet
CustomerDatabase
Price Db
Fix
ed
CD
R’s
Inte
rnet
C
DR
’sAggregation
FileConversion
MobileCDR’s
FortumRating
Fortum Billing
Prod. cat
Convergent Print-file
Invo
ice
Line
s
Alternative upstream model
CDR’s from all product lines can be filtered out by giving them a
virtual Service Provider marking Separate rating and billing for all convergent customers
Creating a convergent invoice instead of delivering
invoice lines
Unable to achieve convergence with legacy systems
Internet
The upstream model - Pros and Cons
Allows for all the business benefits of convergence Creating offers based on Cross Product Discounting, bundled products
and volume discounts
Few or no changes to existing billing infrastructure Fast and simple way to convergence
Can be used for more than convergence With more flexible rating and billing systems, you can create more
pinpointed offers and
A sensible path to upgrading the billing environment
The upstream model - Pros and Cons
Billing system need to be able to receive
imported invoice lines
Separate solution for customer wanting
convergence
More useful when adding new product lines When applied on existing product lines, the CDR’s for the convergence
customers needs to be filtered out Interfaces needed to several reference data sources
Slave version of necessary customer data and price data
Agenda
Introduction Background - Convergence
Implications on the billing environment The service bureau perspective
Transition strategy Augmentation Two alternative models
Case 1 – Downstream model Case one: TeliaSonera
Case 2 – Upstream model Case two: Fortum
Conclusions
Summary – and some conclusions Modularity is key
For outsourcing as well as for convergence Another monolith will just create the same problem again
Transition strategies While struggling to replace the old legacy systems, service bureau
outsourcing might help over bridge the transition period There are fast ways to achieve convergence without major investments
The End!
The upstream model+ Enables launch of cross product discounts- More reference data needed
The downstream model+ Extremely fast way to convergence+ “Stapler” without enabling business logic