A Look at SBC’s Billing Strategy

Like most ILECs, SBC is in the midst of integrating local services with DSL, long distance, satellite television and an array of wireless solutions to offer more competitive bundles as its strategy for strong revenue growth.

The success of these complex bundles for both consumer and business divisions will rely heavily on the ability to simply and clearly represent products, services and packages on customer bills.

“We’ve carefully tracked our customer penetration and revenues associated with new service bundles, and we’ve realized that it’s important to consider how much a converged bill drives and influences customers to buy more services with SBC,” says Ihor Zyga, vice president, marketing, in SBC’s Packaging and Billing Solutions organization.

Today, the ordering, provisioning and billing of services may require coordination across various subsidiaries within SBC. “We are working on several concurrent initiatives to streamline systems and back-office operations to create a seamless environment simplifying the experience for the customer,” says Mike Paquette, assistant vice president of IT Billing Solutions.

To reach its goals, SBC examined everything from how customers order products and services to what methods they prefer for receiving and paying bills and what they experienced when they call in with questions to the call center.

Through a series of focus groups, several key drivers were identified: bill clarity, accuracy and timeliness, flexibility, usefulness, robust packaging and discounting, and prompt, courteous support. Zyga notes that within these areas there were opportunities to reduce churn and drive stronger revenues. To accomplish this, SBC created a number of projects to streamline processes and improve customer experiences.

One of the primary areas of concentration included a converged business summary bill, an electronic Billing Analysis Tool (eBAT) for business customers, as well as a new enterprise paper bill format for all customers.

eBAT is a Web-enabled business solution providing capabilities such as customer defined/managed hierarchies, from which charges are allocated/distributed, drill-down navigation across products/services, canned reports and multi-tiered security for end-user access.

Soon to be rolled out will be advanced capabilities, including dynamic configuration for filtering/reporting/totaling of products and services, online payments and customer self-care for the ordering of billing product tools such as eBAT and DVD.

The converged summary bill is a simple view of the total spend for a business customer across four main LEC regions, including long distance and any billing and collections affiliate that it processes internally (i.e., Advanced Services, CPE and Managed Services). “With this summary bill, customers have the flexibility to not only configure the hierarchy, but name the nodes of the hierarchy which will then be reflected on their bill,” says Paquette.

Data Convergence

Convergence was an overarching vision as SBC began to develop many of its services, however, the definition of convergence was elusive given the size and complexity of the organization. “There are many different ways to think about convergence, because of our size, complexity and boundaries of what we could and could not do from a legal/regulatory perspective,” says Paquette.

The first step in this initiative was to integrate data on a post-billing basis across the SBC family of companies, building additional billing products around convergent summary bills and eBAT. “Our normalized, integrated view of the billing data across the enterprise will enable SBC to more easily roll out enhanced DVD-, EDI- and XML-based enterprise solutions,” says Paquette, noting that further integration and widespread acceptance of these solutions will drive down costs for both the customer and SBC.

While the eBAT initiative was originally targeted to large and global customers, SBC is quickly moving the product capability to other markets later this year. “We already have more than 900 customers with the convergent bill/eBAT solutions, and once we have the ability to order products such as eBAT via the Web, we believe the move downmarket will happen quickly, as it will require little to no intervention from our back-office support teams,” says Paquette.

Based on customer feedback, it was also apparent that SBC needed to enhance its electronic data interchange (EDI) solutions and develop XML-based solutions for the longer term. “Today, although carriers provide EDI solutions based on industry standards, there are still different flavors of implementation,” says Paquette. “As SBC grew through acquisitions over the last few years, the EDI flavors also grew.” Consequently, SBC is moving to a standard means from which to deliver its EDI solutions across the organization. In addition, XML will become a product in SBC’s portfolio in 2005.

In addition, eBAT will be expanded next year to include IP communication services so that customers can view bills on the Web. “Our ability to provide near-real time statistics on IP-based services through the same means by which the customer receives their post-billing data will be another differentiator,” says Paquette.

Comprehensive Customer Views

Because SBC is comprised of multiple subsidiaries, with multiple views of all customers, the company needed a 360-degree view of its customers that are served by more than one subsidiary. However, that can create a variety of operational, regulatory and legal hurdles.

“Even the simplest request can be quite complex from an operational perspective, especially if it spans multiple ordering and billing systems,” says Ric Zamora, vice president, IT Billing Solutions.

To address these complexities, rather than replacing many of its legacy billing systems, SBC has decided to approach IT from a component-based perspective, “whereby we tackle high risk, high volatility areas through either the purchase of a COTS product, internally building component-based solutions, or expand the reuse of best-of-breed assets within our portfolio suite of solutions,” Zamora adds. With those components, SBC replaces legacy code across the enterprise one step at a time.

Another area of focus is centered on what SBC calls Competitive Response Infrastructure (CRI). This initiative is intended to improve the ability to quickly deliver a wider range of packages for mass market customers through one call.

“CRI was fueled by competition resulting from UNE-P and technological advances by both IP and wireless service providers,” says Paquette.

The CRI initiative set out to identify, develop and deploy various packaging capabilities across all of SBC’s affiliates. The goal is to design, develop and deploy new packages within a 30-day time period, and in some instances, a 24-hour window. Traditionally, people developed package solutions with teams across different regions to deploy the same package. “Now, they work through one channel and one core competency that will deploy the necessary table changes automatically to respective systems across the enterprise,” says Paquette.

Because CRI is being developed as a set of core competencies that are continuously integrated across its footprint and various affiliates, marketing has one place for analysis, one for entering and one for distributing capabilities. “Product offerings and channel standardization and simplification with customization as needed will be possible—regardless of location,” adds Zyga.

They contend this will enable an evolution from static to dynamic packages, where customers will buy not only pre-defined products, but also packages tailored around their unique needs. “Once customers buy a core foundation of products, we allow them to choose additional products off a separate list that is in tune with their desires,” says Zyga.

Single Price Point

“We recognize that our SBC bill—electronic or paper—can be the differentiator in instances where multiple providers are offering similar multi-affiliate bundles,” says Zyga.

Traditionally, local and long distance charges were separate components on bills. However, in regions where state commissions have given their approval, SBC now reflects a single price point for their new “All Distance” packages, which include local and long distance components.

“We want a customer to clearly see the single price point in the bill for a package offering that may include local, long distance, Dish, DSL and Cingular. That requires us to reflect the package in its entirety and not just the components split across the bill. That is the key,” according to Zamora.

To succeed, SBC has to apply discounts carefully such that they abide by all the rules that govern regulated and non-regulated product offerings. “That requires a great deal of review and coordination to ensure your accounting and taxation rules have been cared for,” says Paquette.

Another area of complexity is the first bill. “It’s standard that you pro-rate charges in new bundles and in most cases must bill for a partial month or extended month—dependent upon order and bill dates,” Zamora says Because of those rules, many customers call in to have CSRs further explain the pro-ration once they receive the first bill.

“You don’t want customers purchasing a package with a single price point at the time of ordering and then seeing multiple component charges split separately on the bill,” says Zyga. As a result, CSRs selling single price point packages will have enhanced pro-ration tools later this year. “They are being fully trained on how to explain partial charges that will occur on the first bill. We are synchronizing affiliates so that all is fully explained up front.”

Consolidation

SBC, which is exerting a great deal of energy to expand its presence as a national service provider, launched in 2003 a strategy for consolidation of systems that support SBC data product offerings.

SBC’s initial plan will focus on the consolidation of systems and back-office capabilities supporting ATM and frame relay, followed by CPE, managed services, dedicated Internet access, DSL, and all enhanced IP services, into a single suite. “Our data strategy is an all-encompassing solution including customer care, ordering, provisioning, service assurance and billing,” says Paquette. “Our parallel approach to delivering these capabilities is already beginning to have solid returns on our investments.”