Driven to do business differently

Karl Whitelock/Stratecast
17 Nov 2011

Over the past two years there has been increased attention directed by the media, analysts, regulators, enterprise customers and, most importantly, end-users toward service providers about billing. All want CSPs to make the billing process less complex and more accurate while providing a web 2.0+ style online experience.

The heart of the issue is that CSPs must differentiate at an unprecedented rate through organic and partner-based service innovation. This increases the need for sophisticated bundling and the ability to manage the billed revenue stream and compensation due to suppliers and channels. It also means that flat-rate bundles or even tier-based customer usage plans are no longer enough as issues with content consumption and supplier/partner management continue to mount.

Enter the world of agreements-based billing (ABB). In its simplest form, agreements-based billing recognizes that business models are relationship-driven and characterized by fluid, individualized and interrelated agreements across customers, suppliers and channels.

For example, at the beginning of a business relationship, all parties define terms and conditions, along with the associated financial definitions. In essence, "agreements are about the dance between the customer and the CSP, in which the customer is seeking customized services and discounts and the CSP is seeking financial commitments."

Relationship definitions can be between an organization and its customers (B2C), between two work teams internally, or between one organization and others in a wholesale arrangement (B2B) that will eventually play out to end-user customers. Obviously, relationships can become quite complex, especially when the agreement requirements are extensive, terms are interconnected within and across participants, and monetary measures flow in multiple directions.

Flexibility to support changing business needs is essential as technology advances, market conditions are redefined, business relationships evolve and organizational structures are transformed. On the other hand, if support for new business models and service personalization options is limited, the business typically forgoes opportunities or creates workarounds which can result in issues with accuracy, auditability and scalability. At a time when business change is needed the most, inflexible systems will cause an organization to just "get by". Such a scenario, especially as the communications industry moves to greater levels of complexity, is not an acceptable option.

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