Back-office permutations are afoot in mobile. Data content and applications are a new source of revenue and profit as device and network technology maturity have continued to broaden the scope of services available to mobile handsets. At the same time, carrier processes and infrastructure are struggling with increased complexity, particularly since the business processes often include a long supply chain and a variety of partners. The result? New partner relationship management (PRM) challenges for mobile operators that are developing, launching and delivering data services and applications.
The partners required to meet end-user demand for applications and content include licensees, aggregators and sponsors (as when Pepsi printed keys to free iTunes downloads on their bottle tops). With so many stakeholders in any one transaction, each partner may receive only a few cents per transaction, depending on the service and pricing particularly in entertainment services. Accordingly, mobile carriers must learn how to ensure profit from such services, especially those with modest revenue. When small transactional profits are at play, the systems need as little human interaction as possible.
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Service providers can organize business processes, including PRM, around the customer.
Partner management in the new business model is changing as transactions are becoming larger, but the revenue of each is smaller. In the past it has been a flat rate, so batch or manual processing was feasible, says Curt Champion, Convergys Corp., whose Infinys billing and rating platform has a PRM module that can provide partner settlement in real time. Now, with the possibility of hundreds of thousands of content options, each with a different price point and packages and types of providers, the only way to make money is through automation.
Partner settlement platforms can manage the partner process from acquisition to building data, volume and pricing thresholds, and all the information necessary to take a 99-cent transaction and share the revenue across the supply chain.
The number of partners any wireless carrier has is escalating. Right now, theres a limited variety of data services to choose from, says Thomas Pedersen, a director in the Solutions Group at Intec Telecom Systems plc, which brokers transactions and settlement between carriers and partners, providing a PRM portal for content and applications providers to log in and monitor activity. But that is changing mobile TV is going to be interesting, for example.
As data and applications become important market differentiators for wireless service providers, a PRM system becomes central to managing the increasing number of partners.
Thus, scalability in partner onboarding has become another area of concern driving PRM automation. We recently met with a mobile operator that has 50 or 60 content providers and sees 100,000 transactions a day, says Pedersen. The revenue share on each is across five or six parties. Theyre settling these manually, and say theyre barely breaking even. At some point they will need an infrastructure to scale, because they cannot continue to manually harvest these providers at volume.
Many service providers are crafting automated PRM infrastructures to allow applications providers to sign up online, auto-processing the partnership parameters. Using business rules, cellcos can set revenue-sharing agreements flexibly, decide on branding arrangements, determine volume commitments and define settlement terms.
Going forward, thinking about thousands of content providers out there, how much time do you want to spend on partner ramp-up, especially if its niche content that wont have a high volume? Its important for segmenting, but you dont want to spend a lot of time on it when profits not as high as it is on other things. This is measured in cents rather than dollars, Champion says.
Once partner deals are hammered out, aligning PRM with billing becomes the next hurdle. In mobile, partnerships create challenges in offering one-bill services because the CRM, PRM, billing and rating and provisioning need to be aligned to do that, says Rene Sotola, vice president of Solutions Portfolio Management at CGI Group Inc., whose Tapestry service manager is an ordermanagement solution that can interact with legacy and new OSS systems, and can provision converged orders on partner networks.
But at the end of the day, you have to bill for it, with a mix of pre- and postpaid. You also have to provide two balances one for the end user, and one for your content partner. Location-based services are particularly complex because youre billing events based on several criterialocation, megabytes, minutes, class of service and more, says Keith Pigue, executive consultant at CGI.
The carrier also could be on the hook for revenue leakage at any point in the chain, which means that cross-supply chain visibility for all parties is an increasing requirement. Also, in a volume business, discounts go straight to the bottom line. Content aggregators want to allow content providers to see revenue in real time, because there are volume discounts that kick in at the end of the month. Partner management has to address this, says Pedersen.
Driving efficiency and profitability also means finding a suitable way to process refunds across the partnership line. It costs service providers $25 to $40 to take a phone call, any phone call, says Pedersen. Imagine with an MP3 download, where your profit to begin with is about 5 cents. It would take thousands of transactions to make up for that one service call.
Thus, carriers could implement efficient refund processes, for processing requests any time on unbilled usage and billed usage, he says. In the case of the latter, a solution could be giving the partner access to the PRM system to issue refunds that will show up on the next bill. Auto-refunding is another fix, where a credit is granted automatically within certain parameters.
Another PRM-related OSS concern is minimizing provisioning time for partner-delivered services. The orderto- activation processes need to be streamlined and you must automate the key processes in that flow. This area is plagued by issues thanks to the traditional buildup of legacy systems and silos, and manual processes, says Paul Struthers, director of solutions marketing at Amdocs. The Amdocs Order-to- Activation Solution tackles the issues with a combination of strategic consulting services, the Amdocs 6 OSS platform, PRM and integration services. The Amdocs partner manager has security, partner selfcare, authorizations to distribute content and provisioning, templates for agreements and event processing.
The carrier needs a streamlined view of what they have out there and which customers are using which service, from which partner, which means PRM is critical, Struthers says.
Wireless evolution will continue to drive PRM requirements. Service providers, industry players say, need to start addressing complexity now, before it becomes disruptive to their business models.
AOL in Britain is going head-tohead with BT, offering new services, new features, for less money, says CGI Groups Sotola. Plus there are new entrants like MVNOs. And how soon will Vonage start competing? The walls are falling between wired and wireless, and we have yet to see how far the shakeup goes.
From customer care to the back end to settlement, this is all driving new requirements in partner management.
CGI Group Inc. www.cgi.com
Convergys Corp. www.convergys.com
Intec Telecom Systems plc www.intec-telecom-systems.com