Legacy systems stifle business options

Siobhan Ryley, Intec Telecom Systems
25 Feb 2008

As technical and regulatory environments become more complex, relying on outdated transactional systems offers little assurance of success. New marketing ideas or strategic initiatives will remain on - 'wish lists' if a service provider isn't equipped with the systems to match business growth plans. Despite these issues, concerns over system implementation risk, capital expenditure controls and disruption to existing billing processes are still regarded by many as significant barriers to new technology adoption.

Hidden costs

At first glance it may appear that legacy billing and customer care systems and the core business processes they support still meet the needs of many service providers. In reality, legacy systems carry hidden costs and risks that offer a compelling reason to consider replacement. These include:

  • Rising maintenance and support costs
  • Fragmented software applications performing discrete tasks for individual lines of business
  • Inability to react rapidly to market demands for new and innovative services
  • High degree of reliance on in-house IT departments
  • Increasing number of bill queries and error rates; and rising bad debt and collection costs
  • Lack of transparency of complex billing data
  • Multiple points of data entry and repositories for customer information
  • Significant manual intervention to process and manage enquiries
  • Inability to readily produce meaningful management information
  • Difficulty in enabling third party access to billing and charging domains

Service providers look to reduce investment in separate voice and data networks by delivering voice, data, e-commerce and content over a hybrid network infrastructure. But frequently the question of how these services will be managed and billed is not addressed until it's too late: next-generation services bring more pricing options and additional business model complexity. A flexible and open billing environment supports business objectives and ensures billing quality, helping to capitalize on opportunities.

Acknowledging that your billing and/or customer care system needs an overhaul is just the first step. Identifying the system that will best support an organization and its business processes is more difficult. Leading service providers are purchasing billing systems as critical platforms to support marketing, revenue generation and customer management objectives. The replacement process must address a number of strategic issues: systems and enterprise consolidation; integration with CRM and ERP systems; service and subscriber convergence options; addressing new digital content business models; impact of network and technology evolution; 'pros' and 'cons' of a custom vs packaged solution; software licensing vs hosted solutions,
It is imperative that telecom executives resist thinking of information systems purely as a cost and seek to identify the impact that legacy systems and fragmented business processes have on the entire organization. Here are four examples.

Inefficient front-office management. The ability to support convergent services and complex content and bundling strategies requires billing to be an integral part of the sales, marketing and service delivery process. Service providers want the ability to offer customers a variety of ways to pay and control their spending or transfer charges between prepaid and postm-paid accounts. They also want the ability to consolidate multiple services onto a single bill, and need to offer real-time cross-product, cross-account and cross-customer discounts or promotions based on usage patterns.

Difficulty in managing sophisticated offerings. In a multi-service environment, service providers face significant challenges when implementing service packages. When managing these services they want the ability to rapidly model product, pricing and service options.

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