"The ability to respond effectively to market change - to continually establish and re-establish temporary competitive advantage - is becoming the single most critical competence for enterprises," says Frank Gens, senior vice president of research at IDC. "[It's] is about maximizing IT flexibility and responsiveness, while minimizing cost, so IT can really accelerate, rather than impede, the pace of business innovation."
Outsourcing lets small players level the playing field in this respect, because it allows carriers and resellers to pay a monthly fee (often thousands less than it would cost to buy a system) for shared access to the same kinds of flexible platforms and capabilities owned by the big carriers. Aside from licensing fees, staffing is a major billing cost hurdle for service providers trying to gain a market niche; an outsourced approach eliminates this concern too, because the platform is hosted by a billing provider rather than implemented and administered in-house.
"They need all the bells and whistles that the bigger carriers need, but they don't always have all of the capital and the funding behind them," says Karen Mitchell, vice president of sales and marketing at EUR Systems. "They may not have the internal staff today, they may not be able to have an administrator for the billing platform, and they don't want to have to go through the expense of hiring someone. So they can take advantage of our staff."
Indeed, outsourced options mean that smaller market players can simply hand over their back office and focus their energies on selling services and keeping customers. "We're getting contacted by a lot of smaller startups," says Mitchell. "They can come to us for a one-stop OSS shop and have us do it all - and they get a cost-effective model up front for getting started and getting their business running."
Managed, outsourced billing also gives smaller providers access to advanced tools like Web portal interfaces for data analysis and ondemand reports, which can prove important in market positioning.
Analyst firm Atlantic-ACM says carriers can improve service delivery by providing modernized service and management interfaces. "All carriers should be taking steps to deploy and enhance e-tools to improve flexibility in bill analyses," says Taher Bouzayen, Atlantic- ACM's vice president and analyst for the wholesale sector. "This is perhaps the most important development area at this time, and may prove to be competitive advantage for carriers that get it right."
Daleen Technologies Inc. for instance offers BillingCentral.com, which is a go-to location for billing cycle administration and status. "So they can interactively use this site to participate in the reviewing and the approval of billing cycles and data," explains Bill McCausland, senior vice president of operations at Daleen. "So from anywhere, they can go in there and look at the data and review it and approve it - and if they make changes, we're immediately notified through an automated process."
EUR Systems also offers Web access and the ability to run reports on-demand. "If you want big reports pulled and it's going to affect the platform and you possibly have other companies on the same platform, then a lot of times your vendor does that for you," says Mitchell. "But we let customers go in via the Web and do their own set-up of their customers and order entry, they can go in and look at customers' accounts, and run many reports themselves."
Outsourcing places high-end features within the reach of small operators as well. Convergys Corp. for instance offers Infinys on a hosted basis, a convergent business support system that does end-toend product and customer management, from fulfillment to revenue management. Convergys's Keith Wolters, senior director of IP solutions, says smaller providers can be more competitive with it because they have the ability to create new bundled service offerings with usage rating metrics.
"Bundling is the ticket every operator - wireless, wireline or cable - is moving forward on," he notes. "Two-service bundled offers can reduce churn by 25 percent, [and with] three or more, it's up to 50 percent. So everyone's in everyone else's business. And when you have that, you have to figure out a way to keep the customers that you've got. Bundling has been seen as the savior and key to survival." Feature sets in the OSS thus become important, he notes. "They want to make sure it can do bundling, cross-product discounting," says Wolters. "They want to offer content, and use content partners as part of the value chain to help deliver those services. But you have to make sure the BSS can deliver those services and can mediate and bill usage from those services. So all those different components are features an operator should be looking at."
As services proliferate and new service providers enter the market, another way for a fledgling provider to get ahead of the competition is being nimble in the marketplace, adjusting to changing trends on the fly. "Competitive advantage is 50 percent price and 50 percent flexibility, or the ability to roll out new products very quickly," explains Todd Benjamin, president and CEO at Rodopi Software. "In Web hosting, people are rolling out products daily sometimes. In the telco world, one of the biggest inhibitors was always the systems to support rolling something out in 12 months." To cure that ill, Rodopi has released a hosted application for automating provisioning, billing and customer management called EasyOSS, targeted to small and medium-sized and "greenfield" IP service providers.
EasyOSS offers pre-defined service templates, default service bundles and branded user portals, along with prepackaged vertical application templates, off-the-shelf third-party software and hardware integration modules. No hardware or software implementation is required. The solution contains a customer data import utility, and can be turned up in about a matter of hours. EasyOSS also is configurable to fit the business models of users that don't fall within the predefined parameters.
The average cost for an ASP is $300 to $500 per month, Benjamin says. Pricing is flexible and based on usage, number of customers and other business model considerations of the customer. "This works with them instead of the customer having to fit a third-party-determined model," he says. For instance, one EasyOSS customer was doing a broadband-over-power line trial, but then lost the personnel who were going to run it. "So we did it here and within a week we had configured all their services, the third-party integration and handed them the keys," says Benjamin. "So they were able to run the trial out of our data center until they got up to staff, so they didn't miss a beat."
EasyOSS supports all wireline access methods, and Rodopi has joined the Motorola Canopy wireless broadband Affiliate Solutions Program, so EasyOSS will be applicable to wireless ISPs wanting to use Canopy infrastructure for broadband access.
"And as the pace of the IP-centric industry increases, it becomes more and more important to move quickly, with quicker integration and quicker time to market," says Benjamin. "The ROI here is based on removing manual processes from customer lifecycle management."
To that end, Daleen offers a tool called Task Manager, which is an automated scheduler and workflow engine for billing. As it executes the procedures at every step of the billing cycle, it alerts Daleen on failure or success of the step. "By doing so it really minimizes the downtime between jobs that were previously waiting on manual intervention," says McCausland. "So it accelerates the delivery of billing - it really compresses the time it takes to do billing.
Outsourcing brings more than cost reduction and business flexibility and efficiency. It's also about peace of mind. "What an operator essentially buys when he outsources are service level agreements," says Wolters. "In reality, the operator should care less what system they're running on. They're buying bill accuracy at 99.9 percent, response time of less than 1.5 seconds, billing cycles to be within two hours of completion time by the agreed-upon schedule, that sort of thing. When he puts a rate change in, he wants that rate change to be effective within two days or whatever metric he feels is warranted for his marketplace."
Managed services offer a business model that allows the customer to manage risk, in other words, especially "while significant change is being made to the business in the form of consolidation and migration to new platforms as well as the improvement of business [processes]," says Mark Farmer, marketing director for outsourcing services at Amdocs, which offers preintegrated CRM, billing and mediation. "Time to market often drives a need to modernize the overall business processes and infrastructure of the service provider."
With any luck, outsourcing just may be what the doctor ordered for smaller operators and startups looking to find a niche in the competitive telecom marketplace.
| Links |
|
Amdocs www.amdocs.com |
