Blame Game

Posted: 07/2002

Blame Game
Billing Department Frequent Scapegoat
for Process Problems

By Linda Gimnich and Cathy

PROBLEMS TOP THE FCC’s quarterly consumer reports listing of the top complaints
regarding telecommunications services. No doubt telco executives are calling
their managers of billing operations on the carpet for the failure of their
billing systems.

On behalf of billing managers
everywhere, we say: "Enough! These are not necessarily billing problems,
but symptoms of problems that may originate elsewhere in the company."

In fact, disease usually is hidden
in the operational inefficiencies of an organization and simply culminates with
customers calling in to complain about their bills. However, most telecom
service providers don’t take the time to diagnose the problem. Instead, they
treat the symptom.

How many times has a customer
service representative given credit to a customer for a bill that is wrong
without anyone in the organization following up to find out why the bill was
wrong in the first place? Hence, the problem is attributed to billing while the
true origin of the error goes undetected — and untreated.

The potential sources of the
so-called "billing problems" that might exist within a service
provider’s organization are many. The most efficient way to determine such root
causes is to look at the service provider’s processes from end-to-end — from
customer acquisition to cash. This means reviewing every step in the process
required to bill customer ultimately for services they receive. The process
extends from initial order entry, through provisioning, through posting of
service rates, accumulation and rating of any call or message detail, to
production of the invoice.

This exercise reveals several
critical junctions that can lead to downstream billing problems, including:

Initial Sales Process. Many
times what the salesperson sells customers and what customers think they are
getting are two different things. Customers might hear one rate and are
surprised when their first bill shows another. Providing a summary of the
initial bill to at the time of the order (especially for complex orders) is an
effective way to eliminate or reduce the potential for misunderstanding. This
simple step can reduce customer service calls down the road and improve overall
customer satisfaction.

On complex orders requiring
equipment engineering, installation of CPE, multiple facilities, etc., it is
beneficial to have a quality review step early in the order process. This
ensures that a second pair of eyes has reviewed the order and increases the
likelihood that potential pricing or implementation errors will be caught before
the order is processed. In industry surveys, as many as 50 percent of orders
provisioned are out of synch with the billing data required to bill customers

Order Entry. Order entry is
the source of most problems that result in customer billing complaints. Some of
the potential problem areas are:

  • The current order-entry system
    does not support new products, requiring the manual input and tracking of
    orders, which often results in errors.

  • Product catalogs are not up to
    date with new product information or correct pricing. Product/service codes
    are, therefore, entered incorrectly or left out.

  • Services/products cannot be
    validated for a particular customer so they are ordered but not "provisionable."
    Many times, they appear on the bill even though they never were provisioned.

  • There are never enough edits in
    the system to prevent human errors. Some systems are better; others are
    worse. This often includes simple things like address validation and correct
    state abbreviations.

Service Provisioning. Too
many times what the customer ordered and what was provisioned on the network do
not match. Some typical errors that can occur include:

  • Service/feature setup in the
    switch or other network elements

  • The PIC selection is not
    configured correctly

  • Installers onsite do not
    configure CPE correctly or add CPE that may be required but fail to add it
    to the order for billing.

Collection of Billing Data.
At this point, the customer has some type of service, whether it is what was
sold or not. Each day, or at some scheduled frequency, all events are collected
from the network to use in the billing of customers for actual usage. This area
often escapes careful scrutiny. Common errors include:

  • Errors in the formulas and
    methods to separate "billable vs. nonbillable events" results in
    incomplete calls;

  • Duplicate records generated
    because of a variety of reasons in the actual network device or
    call-collection practices results in complaints about being billed twice;

  • Missing time periods or
    "gaps" not identified results in lost revenue;

  • Resetting or rebooting of switch
    or network devices that creates erroneous dates or times on records;

  • Unexpected values in specific

  • Incomplete "trash"
    records that never can be billed.

Processing/Rating of Billing
The events are collected and separated into a "billable
events" file, where the system(s) must determine who made the call, what
product or service the customer has, which features may have been used on the
call and then rate the call and append all necessary data to the record for
subsequent processing at the time of billing.

For this to work well, the customer
database, the product catalog/rate tables, industry tables, Time Point Master (TPM
) and all other input data must be accurate. Additionally, all the input data
must match what the customers were sold and what they think the costs will be.
Typical problems encountered here include:

  • Inability to match information
    in the call record to anything in the customer file so that the record can
    be billed.

  • The product indicated, when
    matched to the customer file, does not exist in the rate tables.

  • Business rules prevent the
    assignment of any usage to a customer if X days before the order-entry date
    or X days after the cancellation date (every company has a different formula
    for this).

  • No rates exist in the rate table
    for specific features used on the event (i.e., three-way calling).

  • Given all of the inputs, the
    possibilities for error are endless.

Billing Calculation and Invoice
Again, this process is fraught with the possibility of errors
given the input required to be in sync. Input includes: customer database
information, tax tables for each jurisdiction, product tables, A/R tables and
the actual call records of good, rated calls.

The types of errors that can
originate in this process include:

  • Invalid, incomplete or
    nonexistent customer records. (Yes, they can disappear from the database
    between the time you rate and the time you bill);

  • Incorrect designation of
    recurring charge features in the customer database such as call waiting,
    call holding, caller ID, etc;

  • Old or incomplete tax tables and
    incomplete identification of jurisdictions;

  • Incorrect/incomplete recurring
    charge product tables for all features, by product;

  • Payments not applied in a timely
    manner, resulting in incorrect outstanding balances and payments received.
    (This accounts for the greatest number of customer complaints);

  • Error files that are not worked
    in a timely manner that result in old calls on the invoice when they are
    finally recycled and billed out.

These are just the primary functions
and a short list of the types of problems that can occur. The good and bad news
about billing systems is that they relentlessly execute exactly what they see.
If the input is good, the output is good. Anything incorrect or missing along
the way results in erroneous information or charges on the bill. Are these all
"billing problems?" The answer is "no!" In most reviews of
items classified as "billing problems," 70 percent or more can be
attributed to bad data that goes into the billing process as opposed to billing
application malfunctions.

Just because an error appears on a
bill does not necessarily mean that the "billing system caused it." To
conquer this challenge, telecom service providers must review each billing error
conscientiously to find the root cause. Once the cause is determined, fixes —
additional edits or changes in processes, procedures or business rules — can be
put into place. This is the only way to attain "irreversible corrective
action" to eliminate continuous "billing" complaints and rework.

Revenue Assurance Challenges Everywhere

Source: TMNG

Linda Gimnich is the co-general
manager of Revenue Assurance Practice for TMNG. She can be reached at Cathy McDonald is a senior consultant with TMNG and can
be reached at



Communications Commission

Management Network Group (TMNG)


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