Billing System Vendors in '98: Bigger Crowd, Smaller World

If life is a dance, many established carriers find themselves dancing with dinosaurs-legacy billing systems-that are cumbersome on a competitive, crowded dance floor. The new entrants have quicker, more flexible partners, and because the brontosaurs are nearly impossible to replace, the established carriers are finding it easier and more cost-effective to add ancillary billing systems for timely introduction of new services. So, even service providers not looking for a partner are closely watching the dance floor for competitive new features or functionality. What they all want to know is, which one is best for me?

The companies offering commercially available billing systems seem to be multiplying almost as rapidly as the companies in the telecom realm to which they cater. At the end of 1997, Billing World recognized about 50 providers of telecom billing systems. By the end of 1998, we were aware of nearly 80 that claimed to have developed, if not implemented, such software. All were invited to participate in a functionality study with Billing World editors and a representative from DMR consulting firm, the results of which are published in the 1999 Telecom Billing System Functionality Report. The parameters for inclusion in the report narrowed the study to 36 billing system providers offering site licenses, service bureaus, or some combination of the two. To participate in the study, a company must have had a live implementation by the end of 1998, offer the system commercially, and visit our offices to demonstrate the system’s capabilities.

System design varied from workhorses for large local exchange carriers, to systems targeted toward small, niche markets, to systems designed to bill for everything, including the kitchen sink. Some vendors dialed in to mainframe systems, others carried in Unix or Windows NT operating systems on their laptops. One vendor even hauled in an AS/400 for the demo.

Windows NT Can No Longer Be Denied

The steadily growing acceptance of Windows NT as a feasible platform for billing systems is apparent from not only the number of new vendors with Windows-based systems (see Figure 1) but also from the existing vendors scrambling to shrink their existing functionality to an NT package for smaller carriers. Jack Boyle, president of Burlington, Mass.-based Saville Systems, indicates his company’s intent to implement a Windows NT-based system late in 1999, even as the first implementation of Saville’s scaled-down, Unix-based system is underway at Cellular South, a wireless provider in Jackson, Miss. Amdocs, another billing system provider targeting larger carriers, has signed contracts to implement Express, its shrink-wrapped package based on Windows NT, with two German companies, says Amdocs’ President and CEO Avi Naor.

While these vendors have just recently begun to embrace NT, developers at Intertech have been building telecommunications billing and OSS programs on Windows NT platforms since 1994. President Dave Wilson thinks that NT is in its “teenage years” in the telecommunications industry. It is rapidly gaining acceptance, he says, not only in the smaller markets, but in some larger ones as well.

“Most of the new systems being put in the Tier 1 carriers are for ‘green field’ opportunities, that is, a new opportunity with no existing customer base,” Wilson says. “Even the most dyed-in-the-wool mainframe fan realizes that by the time the market opportunity grows to any formidable size, Intel, Microsoft and the various component manufacturers will have overcome any perceived scalability issue. With 64-bit chips and associated operating systems coming within 12 to 24 months, few IS folks feel like they’re cornering themselves.”

Internet Opportunities Abound

Vendor after vendor mentions billing for flat-rate and usage-based Internet services, electronic bill presentment and payment (EBPP) and Web-enabled customer self-care.

While a handful of billing vendors are rolling out Web-enabled self-care and EBPP, only a few have live implementations of the functionality, and service providers are slow to turn that functionality around to the end users. EDS introduced its Web-based self-care and electronic payment program, iBilling, for telecommunications in August 1998; one customer presently uses the system. Product Management Director Kelli Attonito says part of the reason for the slow implementation is that carriers have not developed their overall Web strategy yet and don’t want to begin applying functionality in a piecemeal fashion. There are still integration problems to be addressed, from both a software perspective and one of retraining customer service reps to interact with customers on the Web, she says. Amdocs has developed a module called www.self.service for Internet bill presentment and customer self-care. Deutsche Telekom implemented the product in 1998; 10 additional carriers have signed up for implementation of the software, which also provides payment fulfillment capabilities.

Market maturity for EBPP is still a few years-and a few standards issues and business practice conflicts-away. Nonetheless, billing vendors not already doing so will soon be faced with developing EBPP software or interfaces to third-party vendors, such as CheckFree, edocs, CyberCash or BlueGill Technologies. According to the interviewees, most will choose the third-party path.

Usage-Based Capabilities

One-quarter of the vendors included in our report claim to have usage-based Internet billing capabilities; only five companies indicated that they provide no Internet billing (see Figure 2). Data mediation-the acceptance and transformation of data from disparate sources into a more rating-friendly format-presents a challenge to billing systems that accept only tape, batch or real-time feeds from telephony switches. Data supplied by routers, firewalls and other data tracking devices will need to be included on a much wider scale for competitive ISPs. Several vendors, notably Amdocs, CableData, Daleen Technologies, Kenan Systems, Portal and Solect, have begun to address this issue by forming strategic alliances with a third-party data mediation vendor, Santa Clara, Calif.-based XACCT Technologies.

Other R&D Outlets

Don’t think there aren’t plenty of other places for vendors to apply their R&D budgets. (Most billing vendors reinvest 12 to 25 percent of revenues in R&D.) Our interviewees are making plans to tackle other markets-in every direction possible. U.S.-based companies will target carriers in Europe, South America or other continents, while vendors with businesses outside of the United States are moving in. This creates the need for multiple language and currency support, additional facilities (especially with service bureaus) and accommodation of all sorts of tax considerations. Almost all of the vendors we interviewed plan to offer billing capabilities for additional services, most notably including high-speed data, usage-based Internet, prepaid services and, in some cases, utilities. Integration of varied mediation and real-time rating capabilities push the top of the list for development attention.

Vendors also are diversifying the management and financing of their systems. While traditional site licenses and service bureaus are still common, many companies that sell one of them-including Ace*Comm, Amdocs, Billing Concepts, CableData, CTI, EDS, GTE, Intasys, Intelecom, Intertech, NIBI, Saville, Sema Group and Telemetrix-also are offering, or planning to offer, billing in the other environment or some hybrid of the two (see Figure 3). Billing Concepts and National Independent Billing Inc. (NIBI) report that they encourage new entrants to utilize the service bureau for a year or two and gradually migrate to an in-house department. Such contracts are common, though vendors tell us that service providers frequently leave the headaches to the service bureau instead of exercising the option to internalize the billing process.

Buyers Beware

The drivers behind selection of a billing system seem to have shifted from demand for convergent capabilities, which most vendors now claim to provide, to one for an accelerated time to market. Unfortunately for service providers in the market for a billing system, determining the approximate installation time requirements of each of the systems proves impossible. Many factors affect the implementation process, including the motivation of the service provider, the data processing environment (on-site, service bureau or facilities management), the amount of necessary data conversion, the dependence on third-party systems integrators, and the very definition of “implementation period” by the vendors. The companies with very modular systems might consider an implementation “live” when the rating engine has been successfully installed, while others count the installation time from receipt of a signed letter of intent to completion of the first bill cycle.

Customization costs and requirements should hoist another buyer-beware flag. Anything from extensive data conversion to third-party systems interfaces, client-tailored user interfaces and bill formatting can be considered “extras.” Some vendors include such options in the license fee, some perform them for an additional cost, and others require the client to outsource system adjustments to third-party systems integrators or consultants, which can be costly-up to 50 percent of the original price. Several vendors have heard the cry of the start-up to control billing system costs and are offering “out-of-the-box” billing and customer care solutions. Frequently costs of such implementations include a small number of interfaces with third-party vendors, for things such as fraud detection or control, automated service activation, OSS or switch mediation. Other vendors, especially those with modular systems, allow service providers to purchase and implement one module at a time, adding ancillary functionality such as point-of-sale, sales commissioning or data-mining capabilities as the carrier’s business plan allows.

Several companies indicate that any customizations they create are incorporated in the next release of the software and offered to all of its other clients when they upgrade their software. Other companies sell the source code and then offer any upgrades as customizations through their consulting practices. For companies that offer a site license, the annual maintenance fee seems to hover between 10 and 25 percent of the original price of the software, sometimes including the upgrade costs, sometimes not. Most of these vendors say that they provide support for two releases in arrears. As the majority of the systems we saw undergo two major functionality upgrades per year, this vendor support requires service providers to stay no more than a year behind their billing system developers.

As far as customer service representatives (CSRs) are concerned, having the carriers keep up with the software vendors’ technology swings provides eye-watering relief. The few vendors still using character-based customer care front ends are hustling to provide graphical user interfaces (GUIs) to their systems. Some vendors have even gone so far as to create programs that allow service providers to design their own customer care screens. Ace*Comm sells its optional Studio Application module to enable user-configurable GUIs. Billing Concepts and Proxima market similar functionality.

Other vendors have duplicated some of the features offered by third-party call center programs with CSR productivity support, work flow management, ticklers and scripted or video product catalogs. LHS provides fully scripted product catalogs as a customization for its customers, available to CSRs through links similar to the ones they use to access technical help and trouble ticketing.

Saville Systems recently introduced a new customer care front-end that Boyle hopes will sell as a stand-alone call center competitor to products from Vantive and Clarify. It contains videos describing the products or use of their features, which may prove particularly helpful in a Web self-care environment. CTI Data Solutions’ front end also contains video help for CSRs.

The industry’s partnerships and conglomerations, “preferred” providers and integrators, systems integrators as billing system providers, and billing system providers as consultants, make this a sticky, incestuous business market. For example, AMS, a consulting firm, provides billing system software that targets the same markets as Kenan’s Arbor BP, for which AMS also is the preferred systems integrator. Billing system provider LHS now owns InfoCellular, a point-of-sale program with which several of its competitors integrate. Lucent Technologies’ purchase of Kenan Systems throws an interesting twist into the partnership between Lucent and Saville, Kenan’s main competitor.

These relationships only brush the surface of the inter- and intra-workings of the industry, yet positive effects bloom through all of the tangles and thorns. With hardware and software manufacturers aligning themselves more closely, some credence can finally be given to benchmark results, even if many are still performed in Compaq’s, IBM’s or Hewlett-Packard’s pristine laboratory environments. More and more proven interfaces exist for ancillary functionality. Vendors also are more likely to maintain good relations with a variety of vendors of complementary products. And as the employee growth trends double again this year and billing companies keep swapping executives, service providers can rest assured that no one vendor is going to monopolize the market with any one technology for too long.

CD-ROM and print versions of our report can be obtained by calling 703-734-7050, or visiting our Web site at www.billingworld.com.

Company System evaluated

Ace*Comm NetPlus Pro*Vision

Alltel Information Services Virtuoso II

Amdocs Ensemble

American Management Systems Tapestry

Andersen Consulting FLEXCAB

Billing Concepts Modular Business Applications (MBA)

CableData Intelecable

CommSoft CommVergence

CSG Systems CCS with ACSR

CTI Data Solutions NEPTUNE

Daleen Technologies BillPlex

DMW Worldwide Entero

EDS IXPlus, CMIS, Empower

Ericsson Hewlett-Packard Telecommunications PROGRESSOR

Generic Technology Geneva

GTE Data Services UMS and CBSS

HO Systems HOCIMS

IBM Global Telecommunications ICMS

InfoDirections CostGuard

Infozech eBill

Intasys Subscriber Management Information System (SMIS)

Intelecom Systems 20/20

Intertech Management Group Network Strategies

ITDS XCEDE

Kenan Systems Arbor BP

Kingston SCL Jupiter

LHS Business Support and Control System (BSCS)

Magellan Network Systems AccessAbility

National Independent Billing Inc. WRITE2k

Portal Infranet

Proxima Systems ProMedia

Saville Systems Convergent Billing Platform (CBP)

Sema Group CABS 2000

Solect Technologies Internet Administration Framework (IAF)

Telemetrix Resource Group TRACCS

Veramark VeraBill