As the telecom industry looks to improve the customer experience in all aspects of its business, the billing process is finally getting the attention it has long needed. Critical as it is to replace these old systems, the huge scale and daunting expense of such projects—easily approaching US$100 million and more—have made many operators reluctant to proceed. Operators must analyze their particu­lar needs and business models, and then choose one of an evolutionary or a revolutionary approach.

1. Perspective Jens Niebuhr
Andreas Späne
Dr. Germar Schröder
Dr. Florian Gröne
Evolution or Revolution?
Strategies for Telecom
Billing Transformation

2. Contact Information
Berlin Houston New York
Dr. Florian Gröne George Appling Jeff Tucker
Senior Associate Partner Partner
+49-30-88705-844 +1-713-650-4143 +1-212-551-6653
florian.groene@booz.com george.appling@booz.com jeff.tucker@booz.com
Dubai London Paris
Karim Sabbagh Michael Knott Pierre Peladeau
Partner Partner Partner
+971-4-390-0260 +44-20-7393-3527 +33-1-44-34-3074
karim.sabbagh@booz.com michael.knott@booz.com pierre.peladeau@booz.com
Düsseldorf Madrid Rio de Janeiro
Jens Niebuhr Jose Arias Paolo Pigorini
Partner Partner Partner
+49-211-3890-195 +34-91-411-5121 +55-21-2237-8409
jens.niebuhr@booz.com jose.arias@booz.com paolo.pigorini@booz.com
Frankfurt Milan Sydney
Andreas Späne Pietro Candela Peter Burns
Partner Partner Partner
+49-69-97167-408 +39-02-72-50-93-50 +61-2-9321-1974
andreas.spaene@booz.com pietro.candela@booz.com peter.burns@booz.com
Dr. Germar Schröder Moscow
Principal Dr. Steffen Leistner
+49-69-97167-426 Partner
germar.schroeder@booz.com +7-985-368-7888
steffen.leistner@booz.com
Hong Kong
Edward Tse New Delhi
Senior Partner Suvojoy Sengupta
+852-3650-6100 Partner
edward.tse@booz.com +91-124-499-8700
suvojoy.sengupta@booz.com
Andy Lesser, Sebastian Jammer, and Dany Sammour also contributed to this Perspective.
Booz & Company

3. EXECUTIVE As the telecom industry looks to improve the customer
experience in all aspects of its business, the billing process
SUMMARY
is finally getting the attention it has long needed. Too many
operators continue to struggle with billing systems that
were developed a decade or more ago and have since been
remodeled into makeshift solutions that are heavily siloed, are
expensive to operate, and can’t cope with increasing product
and pricing complexity or the need to bring new products and
pricing strategies to market quickly. Critical as it is to replace
these old systems, the huge scale and daunting expense of such
projects—easily approaching US$100 million and more—have
made many operators reluctant to proceed.
Operators must analyze their particu- On the other hand, operators looking
lar needs and business models, and to develop business strategies based
then choose one of an evolutionary on sophisticated price differentiation,
or a revolutionary approach. The rapid innovation, new business
evolutionary approach works best models, and fully convergent
for operators with relatively modest multiplay products will likely need
business requirements, such as more to take the revolutionary approach,
stable operations, a gradual reduction turning to best-of-breed systems to
in process complexity, or improve- capture as much business value as
ments in time-to-market performance. possible. Operators whose systems
Typically, this option entails either lack fundamental health will also
stabilizing their current systems, if likely take this path, turning to off-
those systems are relatively healthy, the-shelf billing systems that can meet
or taking a stepwise approach toward their modest business needs.
enhancing their billing capabilities,
starting with simple add-ons and This Perspective explores these
overlays and potentially progressing two options and provides guidance
toward a full migration to a to operators on how best to move
new system. forward.
Booz & Company 1

4. WHY BILLING In just the past few years, the global
telecom industry has changed
relationship management (CRM)
capabilities, including customer data
MATTERS dramatically. Developed markets have integration, multi-channel customer
become saturated, business models management, contact center auto-
are converging and recombining, and mation, next-generation campaign
product offerings have grown more management and customer insight,
complex as operators compete to and online marketing.1
offer customers the most attractive
bundles of services. So it is no surprise This urge to improve the customer
that operators have focused their experience, however, has not yet been
IT agendas on consolidating and extended to the process of billing
upgrading their customer-facing customers for all these new products
capabilities, both to attract new and services. The major billing
customers and to better manage and upgrades of the 1990s, primarily
leverage the ones they already have. in mature markets, left operators
with no pressing technical reasons
In some cases, operators are investing for additional major improvements,
tens and even hundreds of millions other than selective add-ons such
of dollars into boosting their trans- as the ability to bill for content.
actional and analytical customer More recently, the anticipated move
This urge among operators to improve
the customer experience has not yet
been extended to the billing process.
2 Booz & Company

5. to flat-rate billing and uncertainty that billing is quickly moving back should take in upgrading their billing
about the convergence of fixed and onto IT’s front burner at many major capabilities, however, is less clear—
mobile operations stalled the upgrade telecom operations, for a variety of cautious, incremental evolution or
of billing technologies, thanks to a reasons (see Exhibit 1). Executives aggressive, greenfield revolution? That
perceived lack of business need. are experiencing firsthand the will depend, in our experience, on
critical role of the billing process in each operator’s business requirements
A recent series of interviews supporting new products and pricing and technology realities, and a realistic
Booz & Company conducted with models, bringing them to market analysis of the economic benefits to
IT leaders at telecom operators quickly, improving revenue capture, be reaped.
around the world tells us, however, and reducing costs. The path they
Exhibit 1
Billing Rises to the Top of the Telecom IT Priorities List
CTO/CIO BILLING TRANSFORMATION VS. OTHER IT PRIORITIES BILLING TRANSFORMATION STATUS
(2010-2011) (2010-2011)
No 82%
priority
7%
Lower
priority
22% One of top
three priorities
71%
18%
Billing Strategy and Plan Billing Transformation
under Revision Already under Way
Note: Based on interviews with 55 CTOs/CIOs of fixed, mobile, and virtual operators in Europe, the U.S., Middle East/North Africa, and Asia/Pacific.
Source: Booz & Company analysis
Booz & Company 3

6. DRIVERS OF The competitive demands of the
21st-century telecom market reveal
only further complicate the billing
process. And as operators develop
CHANGE much about why billing has risen more sophisticated multibrand
to the top of the IT agenda at many strategies that target specific
telecom operators. customer segments, they will need
to develop the ability to bill for
• Increasing product complexity: multiple virtual network operators
The rise of next-generation within a single network and system
networks—everything from fiber to infrastructure.2
4G networks based on long-term
evolution (LTE) technologies—is • Increasing pricing complexity: With
driving the creation of a large the rise of ubiquitous high-speed
number of new communications networks and product bundles, the
product opportunities, including trend to flat-rate pricing appears
increasingly complex bundles to be slowing. Creative, flexible
of fixed and mobile offerings, pricing structures have become a
entertainment, applications, and strategic differentiator, especially
other value-added services. As in increasingly competitive mature
these products enter the market, markets, where tariffs with “cost-
the ability to bill efficiently for airbag” spend threshold features,
both traditional and converged try-and-buy schemes, dynamic
products will become a necessity. usage-based discounts, and social/
This capability will also need to be community-based pricing schemes
extended to third-party partners have become popular. Even flat-rate
that deliver apps, content, or value- plans are becoming more complex,
added services through revenue- with monthly flat rates being joined
sharing agreements. by flat fees per call, per day, for
specific time windows, or as value-
Product innovation is also blurring added services within a bundle.
the line between traditional Most advanced operators run
prepaid and postpaid billing dynamic discounting schemes as
models as operators begin to a means to optimize network
offer products such as hybrid load distribution and respective
bundles that integrate prepaid capital expenditure requirements,
and postpaid plans with the aim moving away from traditional
of differentiating themselves in fixed-price plans.
saturated markets. This trend will
Creative, flexible pricing structures
have become a strategic differentiator,
especially in increasingly competitive
mature markets.
4 Booz & Company

7. Increased product and pricing only problem associated with legacy data privacy and consumer rights
complexity is also making the task billing systems. Operators that protection.
of billing for commercial accounts continue to depend on legacies face
more onerous, especially given the higher costs and significant business In addition to the many reasons older
many various account levels and risks, even as such systems reach billing systems may need upgrading,
thousands of separate employee their operational limits. the technology itself has advanced
account holders. significantly in the past five years.
Planning for, building, and running Commercial off-the-shelf (COTS)
• Time-to-market: Given the billing platforms has long been one systems have become more flexible
rapidly multiplying number of of the biggest IT costs for telecom and more easily configured, greater
products, services, and pricing operators, eating up 30 percent standardization of functional segments
plans, and the shorter and shorter or more of IT budgets. Now, as (summarized, for example, in eTOM,
product cycles, it is imperative margin pressure increases, the a framework defined by the industry
for operators to be able to push need to leverage new technology to association TeleManagement Forum)
products into the market and reduce this expense is clear. Indeed, offers increased flexibility, and service-
implement pricing changes we have seen several operators that oriented architectures allow reuse of
quickly. Over time, however, focus on prepaid offerings generate numerous components. As a result,
the billing systems purchased significant cash savings by moving many customized systems have been
by operators in the 1990s have their online billing to newer, rendered obsolete. And many of the
been heavily customized, leaving more efficient systems outside the new COTS systems can support new
them with diverse sets of virtually traditional intelligent network (IN) data and multimedia services and
bespoke, often independent billing domain. complex products and product bundles
platforms for fixed and mobile, (see “The State of the Billing Solution
data and voice. Product features Moreover, legacy systems have Market,” page 6).
are frequently hard-coded in shown themselves prone to
flat-hierarchy product codes, for outages and other glitches, putting We see many operators already
instance, making it very costly operators at risk for unhappy caught up in the billing dilemma:
and time-consuming to change customers and real loss of Their current systems are no longer
billing schemes to accommodate revenue—and very bad publicity. up to the task of billing flexibly and
bundled products. Worse, some If operators can’t bill properly, efficiently for the many new complex
operators continue to depend on they tarnish their reputations and products coming to market, while
homegrown billing systems in a lose money. This extends to third- keeping customers happy. Yet the sheer
“stovepiped” architecture with no party partners, with whom many cost—upward of $100 million—and
connections between the types of operators have contractual revenue- scale of designing and implementing
communications at all. sharing agreements. Poor billing a new system are making many
practices can lead to compliance operators hesitate. The key question:
• Cost and legacy risks: The lack of risk as well, given tightened legal What’s the right strategy for resolving
flexibility and scalability isn’t the requirements surrounding customer this dilemma?
Booz & Company 5

8. The State of the Billing Solution Market
Every vendor wants to create some “buzz” in the marketplace. For some time now,
providers of telecom billing technologies have been touting “convergent billing.” No
surprise there, given the industry-wide importance of convergence and the immense
opportunity it gives vendors to push their new billing platforms.
At the same time, the supplier space has seen lively consolidation activity, as players
reposition themselves to build more comprehensive convergent billing capabilities.
Suppliers such as Amdocs, Comverse, and Convergys that in the past have had a clear
offline, postpaid billing focus are enhancing their product lines by offering compelling
convergent products that include online charging capabilities. Network equipment
suppliers such as Ericsson, which recently acquired LHS, a leading postpaid solution
provider, are complementing their IN/prepaid capabilities with offline charging. And
global IT software vendors are entering the market from their more familiar ERP CRM,
,
and business intelligence territories, aiming to develop comprehensive business support
system (BSS) solution portfolios. To this end, SAP acquired Highdeal, and Oracle bought
Portal. Yet the market remains relatively fragmented—Amdocs is the only player with a
sizable market share.
In essence, every vendor is focusing its innovation efforts on being able to offer a similar
set of capabilities:
• Unified product catalogs and convergent billing plans
• Prepaid/postpaid functionality convergence
• Rate plan flexibility (rule-based rating)
• Horizontal and vertical scalability
• Centralized subscriber management
• Comprehensive and easy-to-use tool set to design tariffs/discounts
• Application pre-integration with adjacent domains like CRM, ERP or data warehouses
,
While vendors all pursue similar roadmaps, their stance towards exposing API within the
billing stack varies significantly. For example, several vendors do not provide access to
the interfaces among service control points, balance management, and rating, essentially
creating a boxed solution. Others, in contrast, de-layer their solutions and allow more
flexibility to connect third party solutions.
Buyers should remain cautious. In our experience, too many investment decisions are
made prematurely and ultimately have to be reversed at significant cost and pain. Modern
billing systems offer significantly greater product and pricing flexibility and functionality.
Yet many vendors fail to live up to claims of being able to provide “pre-integrated
convergence.” Given the long histories of the development of these systems, including
frequent acquisition of key components, sometimes the only aspect of the system that’s
truly integrated is the solution’s brand name.
It is likely that a number of smaller, second-tier players will fall behind in the development
of innovative product components. Still, they may offer a more economical solution
for smaller, cost-conscious operators. Given the ongoing consolidation in this space,
however, committing to a single vendor for an end-to-end billing solution may not be
wise; operators that do so run the risk of depending on less innovative systems from
vendors that may disappear at any time.
A final word of warning: Convergence is unquestionably a key trend in the telecom
market. By itself, however, convergent billing may not be a sufficient reason to jump into
what, for many operators, would be the largest IT project they’ve attempted in a decade.
For most near- and middle-term business requirements, reasonable “workarounds” might
still do the job.
6 Booz & Company

9. EVOLUTION OR time-to-market performance, for
instance. Billing for basic fixed/
• Revolution: Some operators have
billing systems that are inflexible,
REVOLUTION? mobile integration that supports slow to change, costly, and unsta-
static product bundling or a single, ble, and yet they are planning to
consolidated bill for all services can follow a business strategy that relies
also be achieved by intelligently on sophisticated price differentia-
overlaying an integrated system— tion, rapid innovation, and fully
Unfortunately, there is no easy “silver through a “rebiller” approach, convergent multiplay products. As
bullet” answer to that question. It is offline data synchronization, or such, they are likely looking for sig-
tempting to see the options as black simply at the bill presentment layer, nificant increases in billing efficien-
and white—either to choose a more for instance—which may be suf- cy—and the money to pay for it. If
cautious, sensible, and adequate ficient for many operators, at least so, they may be good candidates for
evolutionary approach, or to go for in the middle term. And it doesn’t an entirely new billing system.
the revolutionary, top-to-bottom refit. require a hugely disruptive green-
The right answer, however, is more field renewal exercise. Usually, however, billing transforma-
complicated. tion plans aren’t so easily determined.
However, an evolutionary strategy We believe that billing processes must
• Evolution: As critical as conver- has its limits, especially for opera- be tailored to each operator’s prod-
gence has become in the current tors that can make the business case uct and price differentiation strat-
telecom market, not every opera- for a tightly integrated, converged, egy. There are many shades of gray
tor is in need of an entirely new, or real-time billing system that between a sophisticated, full-service
convergent billing system. This incorporates such features as strategy designed to prosper by driv-
is especially true if the operator’s real-time thresholds, integrated ing innovation through service conver-
billing system needs are relatively balance management across fixed gence and the integration of new
modest: more stable operations, and mobile subscribers, or a com- business models, and a lean and mean,
a gradual reduction in process bination of prepaid, postpaid, and “no-frills” strategy designed to benefit
complexity, or improvements in event-based services. from simplicity and low costs.
Booz & Company 7

10. STRATEGIC that are not pursuing radical,
innovative business strategies
may not find a big-bang migration
to be the best strategy. Customers
DECISIONS should be looking to stabilize who remain content with “legacy”
their platforms through a very products and prices are often the
focused set of activities aimed at most profitable, and operators are
extending the life cycle of existing rightly unwilling to sacrifice that
platforms if business demand revenue by migrating these valuable
Operators looking to devise the allows. This strategy avoids the customers into new, typically more
most suitable billing strategy must high investment cost and major economical price plans solely to
first develop a clearly thought-out, disruptions of a greenfield system, simplify their billing technology.
workable business differentiation but at the risk of falling behind
strategy, including strategies for the innovation curve. That may be Moreover, all-out billing transfor-
growth, product differentiation, perfectly acceptable, especially in mation projects are notoriously
pricing, and the like. Is the goal to certain parts of the business, such difficult to complete successfully.
be the “innovation leader” or the as PSTN, where innovation may The effort needed to complete the
“no-frills player”? These strategies not be a necessity, or for operators migration, testing, and verification
must then be matched with a realistic that must concentrate on bottom- is easily underestimated, and these
assessment of the operator’s current line efficiency (see Case Study 1: projects often lead to failure—not
billing environment—its “platform “Sweating the Assets”). only for technical reasons but also
health,” which includes architectural because of the people and change
complexity, time-to-market of • Stepwise differentiation: Operators management challenges involved.
changes, scalability, system stability, looking to pursue more ambitious Given these concerns, established
and IT costs. Exhibit 2 offers an but still “mainstream” competitive operators should carefully con-
assessment tool that operators strategies, or whose billing sider the effort, expense, and risk
can use to clarify their position platforms are less healthy, should required to shape the right “evolu-
in their markets, depending on consider a phased approach. Here, tion paths” in their billing strategy
differentiation strategy and platform the process involves integrating (see Case Study 2: “Step-by-Step
health. Operators can then position existing platforms more tightly, at Convergence”).
themselves on the grid in Exhibit 3 the bill presentment and rebilling
(page 10) to better understand which levels, for instance. The longer-term • Best-of-suite: This option is only
one of four very different strategies goal: to move to more complete for operators willing to embark on
they should consider. platform convergence. a large-scale transformation to a
Operators with complex product true greenfield billing system that
• Stabilization: Operators with and pricing offerings, and with fully integrates billing for current
generally healthy billing systems highly diverse subscriber bases, and potential convergent products
Exhibit 2
Billing Strategy Drivers
DIFFERENTIATION STRATEGY PLATFORM HEALTH
Innovation Strategic No-Frills Health
Excellent Gridlock
Leader Dimensions Player Dimensions
Base & ARPU Base & ARPU In sync with Business demand
growth Growth Strategy defense business needs Functional Fit backlog
Product Portfolio Days to deploy Functional Months to deploy
Multiplay Strategy Single play changes Flexibility changes
Product Integration Operational Stability Outages, leaks
Convergence Strategy Separation & focus Compliant & Security & errors
Personalized Service & Support On-demand
experience Strategy No frills flexibility Scalability No way to grow
Investment Constrained funds
Superior value Pricing Strategy Low cost priority Financial Base & cost cuts
Source: Booz & Company analysis
8 Booz & Company

11. Case Study 1 Case Study 2
Sweating the Assets Step-by-Step Convergence
The fixed-line billing system at a large integrated operator A medium-sized European operator had developed a
was essentially unchanged for almost a decade, and while strategy to integrate its fixed and mobile businesses to
the operator had no business need to upgrade the system, cross-sell, bundle, and eventually converge its product
the mainframe-based platform was showing end-of-life- sets. The operator had first considered a completely new
cycle symptoms that could not be ignored. Ongoing billing greenfield billing solution to support the strategy; it quickly
problems for new products had become so frequent became clear, however, that this approach would entail
that subscribers were growing dissatisfied, and negative significant slowdowns in its efforts to maintain growth,
stories had begun appearing in the media. Multiday not to mention the large cash investments required.
system outages were occurring as often as once a quarter, So the operator devised an evolutionary, step-change
causing millions of dollars of lost revenue. Every pricing transformation strategy to support business and product
change had to be “hard-coded” into the legacy platform, road maps within a relatively tight funding envelope.
increasing the possibility of human error and resulting in
Clarifying the real business need for true convergence
yet more revenue loss. And the labor costs involved in
played a major role in developing the actual step-change
synchronizing pricing changes across multiple platforms
strategy. “Tightly coupled” fixed and mobile products
were rising rapidly.
would require full transparency into call detail records
The operator’s product strategy called for the eventual across platforms to enable convergent discounts and price
phaseout of a number of legacy “copper services,” to plan options, while “loosely coupled” product bundles
be replaced by fiber-based, next-generation access would have much less complex IT requirements. And
technology—and its own billing system. So rather than since the operator was planning to offer “loosely coupled”
replace the fixed-line billing system, management decided products for the next three to five years, a greenfield
to stabilize it. To do so, the operator froze the “copper” converged system would have delivered much more
product mix, limited any further changes to the system, functionality than the business needed. At the same time,
and outsourced maintenance of the system to a third- the operator assumed that the fixed-line business would
party provider. Subscribers were given incentives to switch remain static until the switch to NGN had been completed,
to new next-generation networking (NGN) products, while the mobile business would remain more dynamic
and when they did, they were migrated to a new billing and challenging.
platform. And a new bill formatting system was introduced
Given these parameters, the operator designed a
that took the data from the legacy system, consolidated it
billing transformation strategy that consisted of several
with other product platforms such as media, and produced
development phases. In the first phase, urgent operational
a single statement for subscribers.
issues would be stabilized by replacing mainly fixed
Stabilizing the system and letting it “die in a controlled business components of the billing environment nearing
fashion” turned out to be far more economical than the end of their life cycles. This would be accompanied
replacing it. by enabling basic billing for product bundles—in part by
using the wholesale gateways on mobile and fixed billing
platforms to bill product bundles on either platform while
maintaining the current systems and investments. For
the middle term, the operator planned to work to improve
provisioning speed and time-to-market for more complex
bundles through a newly converged enterprise product
catalog and order management system, opening up a
potential path to further billing stack consolidation at a later
stage.
Interestingly enough, this strategy proved to be much less
costly on a five-year basis than any greenfield approach
envisioned. This operator’s experience thus demonstrates
that a creative, value-adding billing transformation strategy
can be significantly less costly and disruptive than a
radical migration to a new convergent system, especially if
a middle-term need for complex convergent functionality
does not exist.
Booz & Company 9

12. and services, and even completely outdated billing capabilities. They the time required to reap an adequate
new, multi-industry business models can cut costs significantly, increase return on investment in such projects
such as energy or insurance bill- billing efficiency by requiring strict is simply uneconomical, leaving
ing. Operators considering such a adherence to defined functional smaller operators in a “complexity
sweeping change should carefully standards, and even provide func- trap”—any efforts to remedy their
weigh the benefits of the new billing tional improvement. The downside: very complexity are not worth the
capabilities they are looking for a lack of product and pricing flex- effort.
against the enormous cost, busi- ibility (see Case Study 4: “Billing
ness disruption, and risk involved Outsourced”). The alternative, to “lie down and die
in such efforts. If the business slowly,” is equally unattractive, so
cases exist, they should be vali- Choosing a billing transformation smaller operators often find them-
dated with rock-solid analysis and strategy becomes significantly more selves forced to explore more radical
include appropriate risk provisions difficult for smaller operators. These strategies to remain competitive with
to avoid unpleasant surprises (see operators, especially those with fewer their larger rivals—such as entering
Case Study 3: “A Real-Time Billing than 5 million customers, face levels into international partnerships to
Revolution”). of business complexity—the variety share billing services or outsourcing
of products and pricing schemes and their billing to service providers that
• Lean COTS: A highly standard- the degree of fragmentation of the can operate at efficient scale levels.
ized, streamlined off-the-shelf customer base, for instance—that are But without a clear and compelling
package—perhaps even provisioned comparable, if not equal, to those of business-driven transformation case,
via remote hosting or following their larger brethren. So the scope of no large-scale billing project makes
a software as a service (SAAS) their transformation projects and the economic sense; only rarely have we
scheme—can be an attractive solu- effort required are similar. Yet the seen a compelling case for transforma-
tion, especially for operators work- top- and bottom-line benefits of such tion for purely IT reasons.
ing at a smaller scale, with limited projects depends largely on the scale
business complexity, or with very of the business. Below a certain scale,
Exhibit 3
Four Potential Telecom Billing Strategies
Differentiation Strategy
BILLING STRATEGY SPACE
Innovation Leader:
New Business Models &
Service Convergence Best-of-Suite
- Big-bang replacement & migration
- State-of-the-art, feature-rich, convergent suite
Innovation Follower:
Loose Cross-Service Integration
Stepwise Differentiation
- Gradual capability
enhancement against
Cash Cow: phased road map Evolution
Within-Service Differentiation
- Integration & convergence Revolution
around existing stack(s)
Stabilization
Cost Leadership: Lean COTS
Service Streamlining - Sweating the assets
- Standard
- Extended life cycle with
functionality
limited new features
- Efficient delivery
(e.g., SaaS)
Lean Telecom:
Radical Simplification
Excellent Acceptable Gridlock
Platform Health
Source: Booz & Company analysis
10 Booz & Company

13. Case Study 3 Case Study 4
A Real-Time Billing Revolution Billing Outsourced
A rapidly growing mobile operator in a large Asian market A major mobile phone operator was looking to increase
with a big proportion of prepaid subscribers was being market share by reselling network capacity through a
beaten to market by competitors that could launch portfolio of branded mobile virtual network operators. By
innovative pricing schemes much more quickly. Worse, devising a focused customer value proposition for each
the operator had outgrown its existing IN-based prepaid targeted segment, the operator succeeded in limiting both
billing architecture and had begun experiencing serious the scale and the complexity of its billing needs. As such,
operational problems that were reducing service quality. the operator determined that integrating the new billing
The existing heavily customized system could not provide systems into the systems of its incumbent business, a
either the fast time-to-market or the flexibility required to highly complex process, made no economic sense.
keep up with the competition.
So despite its mature in-house billing capabilities, the
Research showed that state-of-the-art prepaid and operator decided to take a different, more radical route.
postpaid converged billing systems were available that It outsourced all of its new BSS operations to a service
could provide the desired flexibility and time-to-market provider on a platform hosted by a mobile virtual network
while offering both scalability and cost efficiency. So enabler, which offered a multi-instance billing stack with
the operator decided to scrap the current architecture state-of-the-art but non-customizable real-time billing
and implement a complete greenfield system based on capabilities. In doing so, the operator knowingly traded
IT technology rather than the old network technology. limited flexibility constraints for faster implementation speed
By doing so, the operator succeeded in realizing cost and low ongoing operational costs.
synergies as well as richer product propositions including
hybrid prepaid and postpaid plans and real-time billing
features such as spending limits.
Without a clear and compelling
business-driven transformation
case, no large-scale billing project
makes economic sense; only rarely
have we seen a compelling case
for purely IT reasons.
Booz & Company 11

14. CONCLUSION Telecom operators around the world
are in a race to offer customers a
any easier. Executives must balance
hard-core business requirements,
multiplicity of converging products technology realities, and economic
and services, to be paid for by equally benefits, and distinguish careful analy-
complex and various pricing plans. sis from market hype. The options:
The result: greater and greater pressure Design an evolutionary road map that
on often outmoded billing systems to is tailored to deliver business stability
account for and collect payment for and capability improvements at the
all these differentiated plans. Telecom right speed and cost, step-by-step. Or
executives are becoming painfully make a well-grounded, deliberate deci-
aware of the need to make sure their sion to engage in a complete billing
billing systems can keep up with revolution. Either path will be daunt-
the fast pace of product and pricing ing, but no operator can afford to put
change. the decision off—and allow com-
petitors to reap the benefits of better
Unfortunately, finding the right billing revenue capture, faster time-to-market,
transformation strategy hasn’t gotten and more satisfied subscribers.
12 Booz & Company

15. Endnotes
1
See “Multi-Channel Customer Management” (www.booz.com/
media/uploads/Multi-Channel_Customer_Management.pdf),
“Beyond the Mass Mailing” (www.booz.com/media/uploads/
BeyondtheMassMailing.pdf), and “Online Customers, Digital
Marketing” (www.booz.com/media/uploads/Online_Customer_
Digital_Marketing.pdf).
2
See “The Rise of Mobile Marketing” (www.booz.com/media/
uploads/Rise_Mobile_Marketing.pdf).
About the Authors
Jens Niebuhr is a partner Dr. Germar Schröder is a
with Booz & Company in principal with Booz & Company
Düsseldorf. His primary focus in Frankfurt. His client focus
is on the telecommunications is telecommunications and
and utilities industries, where technology and IT service
he concentrates on business providers. His expertise
and IT architecture, large-scale includes diagnostics, design
process and IT transformation, of and migration to next-
and IT governance and strategy. generation telecommunication
architectures, large-scale
Andreas Späne is a partner IT transformations, and
with Booz & Company in IT governance, as well as
Frankfurt. He focuses primar- business steering/finance IT.
ily on telecommunications
companies and specializes in Dr. Florian Gröne is
strategic restructuring and effi- a senior associate with
ciency improvement programs, Booz & Company in Berlin.
as well as in development He works with telecommunica-
and implementation manage- tions companies on IT-enabled
ment of complex IT/technology transformation topics. His
strategies. areas of expertise include
customer-facing business
process improvement and
next-generation BSS strategy,
including CRM, billing, business
intelligence, and customer
channel technology.
Booz & Company 13

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