The document discusses whether a telecom operator should deploy a Software-as-a-Service (SaaS) billing solution. It notes that telecom services and technologies have increased in complexity, creating challenges for outdated legacy billing systems. Some mid-size and small operators have already adopted SaaS billing solutions to reduce costs and quickly launch new services. The document argues that SaaS billing adoption will likely increase over time for large operators as well, as the solutions provide benefits around flexibility, scalability and total cost of ownership. It concludes that telecom operators should evaluate their existing infrastructure, finances and needs to determine if a transition to SaaS billing is appropriate for their situation.
1. Business Case – Should A Telecom Operator
Deploy SaaS Billing Solution?
Prepared by: Atul
Gulrajani
2. Guide to Navigate Through the Presentation
• Slides 1 and 2 demonstrate understanding of the Telecom market and the
importance of an optimum billing solution for operators in the evolved high-
tech world
• Slide 3 lists and discusses examples of operators who have deployed SaaS
billing solutions
• Slide 4 analyzes the potential/ future of Telecom SaaS billing solutions
market by explaining key trigger points
• Slide 5 discusses analyzing client’s “as-is” solution to prescribe a suitable
solution
• Slide 6 discusses next steps such as seeking an appointment with the key
decision-makers and IT heads at client office to discuss next steps: evaluate
“as-is” model and understand requirements for the “to-be” design
3. Number of New Telecom Services Lead to Billing
Complexities – Which Billing Solution is the Best?
…Technology Enables
Wider Services
Consumer Needs
Increase…
Operators Face
Challenges …
…Scout for Billing
Solutions
Outdated Software:
• Legacy architectures
and processes
• Silos
High Volume:
• Large number and
volume of data sets
Increased
Regulation
Competition:
• Privatization
• Margin pressures
• Number portability
Strong Suppliers
• Content providers
• Content aggregators
Commercial off-
the-shelf (COTS)
Custom-built
Hosted
solutions
?
?
?
Call Experience:
• Uninterrupted service
• Cheap calls and SMS
Real-time access to:
• Information via internet
• Usage/Bill details
• Value-added services
Wider choice:
• Services and
• Packages
Flexibility:
• Payment channels
• Plans
Interactive
communication
• Two-way information
and cash flow
SERVICES
Voice and text:
• Inward/Outgoing calls
• SMS
Internet:
• Mobile, computer, tabl
et
Value-add services:
• Chat
Call management:
• Call forward/ wait/
voice box/ blocking
• Do-not-disturb
Interactive:
• Tele-voting
• IVR
TECHNOLOGY
• Smart phones
• 3G/4G network
4. Cloud-based Billing Software Offer a Number of
Benefits – Are These Compelling Enough?
1. Cloud solutions enable 15-40% savings through reduced infrastructure requirements and administrative overheads
Parameters Sub-parameters Solution Capability
Security and
Control
Security
Control
Customization
Deploy and
Run
Time to deployment
Ease of running and
maintenance
Functionality,
Agility, and
Compatibility
Upgrade new features
Compatibility with other
systems
Ease in adding new
products/services
Real-time data
Ability to scale up/-down
Cost
Total cost in long-term1
Upfront investments
Revenue: $10 billion plus
Operations: Multi-
national
Employee Size: 100,000
plus
Revenue: $1-$10 billion
Operations: MNC
/Domestic
Employee Size: 10,000-
100,000
Revenue: Less than $1
billion
Operations: Domestic
Employee Size: <10,000
Large Operators
Mid-size Operators
Small Operators
Comparison of SaaS vs. COTS/ Custom Solutions
Solid bracket indicate most important parameters for the
operators and dotted brackets relatively less important
Low High
Low High
Low High
Low High
Operator Priorities
COTS/ Custom SaaS
5. Already Compelling Enough for Some – Small and Mid
Size Operators Deploy SaaS Billing Software
Operator SaaS VendorThe Connect: What was sourced and why?
Solution: Billing and reporting solution
Problem: KPN’s legacy BSS system required a lot of manual
work, longer time to introduce improvements, and higher and
mounting maintenance costs
Benefits:
• End users benefited from significant reduction in costs of mobile
communications within the company
• One contract in every country instead of many providers in various
nations. Self-service, mobile phone cost reporting functions
Solution: Converged billing and customer care solution
Problem: Legacy billing system limited Smart Telecom’s (ST) ability
to quickly scale-up operations and launch new services
Benefits:
• ST quickly launched new services, innovative pricing plans and
an advanced customer experience in the Nepalese market
• ST launched new interactive consumer offerings, new
music, news and entertainment services to interactive health
services
6. SaaS Billing Software to See Broad Adoption – Has the
Countdown Begun?
11%
penetration
Large COTS/ Custom Vendors
3. Watch out for increase in SaaS
market penetration
2. Consider independent/ partnership
SaaS solution
1. Enter market and/ or acquire
specialist vendor/s
Large Telecom Firms
SaaS Market
3. Interesting solutions, not for me though
2. May be I could seriously start considering
1. Test SaaS
15-20%
penetration
25-30%
penetration
3
2
1
2. Deliver consistently on
consumer needs
1. Work with large
vendors to overcome
real/ perceived
challenges
7. Existing Infrastructure, Finances, and Needs of the
Firm to Determine Adoption of SaaS Billing Solution
COTS
INFRASTRUCTURE & SYSTEMS
• Integrated/ Silos, in/compatible
• Age of the systems and vendor
• Functionality and features
• Network capabilities
FINANCES
• Revenue/ Profitability
• Investors appetite
• Cash flow
• Debt leverage
FIRM NEEDS
• Management vision
• Firm strategy
• Market strategy
• IT strategy
8. NEXT STEPS AND OPPORTUNITIES
1. Seek an appointment with the key decision-makers and IT heads at
client office to discuss next steps: evaluate “as-is” model and
understand requirements for the “to-be” design
2. Evaluate SaaS or COTS solutions
3. Short-list SaaS or COTS vendor
4. Implement if COTS solution and ensure smooth transition to new
system
5. Transition operations to SaaS model
9. REFERENCES
• KPN Overhauls BSS for Multinational Mobile with Comarch, Billing World
• Telecommunications billing in the competitive wireline arena
• Consuming BSS/OSS from the cloud – fiction or reality?
• SaaS Appeals Now, More Than Ever
• Magic Quadrant for Integrated Revenue and Customer Management for CSPs
• Pipeline: The Birth of BSSaaS
• Evolution or Revolution? Strategies for Telecom Billing Transformation, Booz & Co.
• Billing Systems - From Service to Bill
• It’s a new world:
• Three Tectonic Shifts are reshaping our industry and driving convergence
• Revenue Management And The Future Of The Telecommunications And Content Industries
• Upping the Ante in the OSS Game, Billing World
• Telco billing and cloud services: a multi-faceted business challenge
• Telcos in the cloud
• Telcos advance in cloud computing, KPMG
Notes de l'éditeur
Advancement in technology enabled operators to launch a variety of new services that meet the needs of tech-savvy consumersGradually most operators offered wide-range of services and early movers lost differentiation even as suppliers (content providers) gained a lot of bargaining powerHigher competition and limited scope for differentiation in services, operators began competing on services (responsiveness) and flexibility (wider choice in plans/ tariffs and ability to subscribe/ unsubscribe at will)To enable optimum services and flexibility for a large number of customers, operators scouted for Operations Service Solutions and Business Service Solutions (OSS/BSS) softwareBilling is a critical part of BSS and it is critical for enhancing customer satisfactionThe question here is the choice of billing software – which one is the best suitable for my business?
Advancement in technology enabled operators to launch a variety of new services that meet the needs of tech-savvy consumersGradually most operators offered wide-range of services and early movers lost differentiation even as suppliers (content providers) gained a lot of bargaining powerHigher competition and limited scope for differentiation in services, operators began competing on services (responsiveness) and flexibility (wider choice in plans/ tariffs and ability to subscribe/ unsubscribe at will)To enable optimum services and flexibility for a large number of customers, operators scouted for Operations Support Systems and Business Support Systems (OSS/BSS) softwareBilling is a critical part of BSS and it is critical for enhancing customer satisfactionThe question here is the choice of billing software – which one is the best suitable for my business?
Advancement in technology enabled operators to launch a variety of new services that meet the needs of tech-savvy consumersGradually most operators offered wide-range of services and early movers lost differentiation even as suppliers (content providers) gained a lot of bargaining powerHigher competition and limited scope for differentiation in services, operators began competing on services (responsiveness) and flexibility (wider choice in plans/ tariffs and ability to subscribe/ unsubscribe at will)To enable optimum services and flexibility for a large number of customers, operators scouted for Operations Service Solutions and Business Service Solutions (OSS/BSS) softwareBilling is a critical part of BSS and it is critical for enhancing customer satisfactionThe question here is the choice of billing software – which one is the best suitable for my business?
Operators can be classified by their size of operations in to three categories, small, medium, and largeLarge vendors are typically more demanding as they have the bargaining power derived from their scale of operations. Also, they have the financial power to deploy/upgrade sophisticated and modern but relatively expensive solutions at regular intervalsThey do not want to compromise on any parameter and want a solution that offers everything despite the cost. These operators tend deploy COTS and in some cases even custom-built solutions. Trend of custom-built solutions is declining as even COTS vendors offer some amount of customization and such solutions can be deployed much more quickly vs. custom-builtMid-size operators may or may not compromise on all parameters, depending on their financial strength and management vision. Some would opt for relatively low-cost COTS solutions, while others may strongly consider SaaS solutions and ultimately deploy oneFor small operators, it is mostly about survival and cost is the most important parameter, even if it means letting go off control and security to an extent. For these operators SaaS option looks very attractive, esp. given the low upfront investments that do not create stretch their working capital requirementThe question is are the SaaS billing solutions offered in the market compelling enough for the small operators to test deployment?
A telecom expert:The obvious benefits in terms of reducing hardware and maintenance costs as well as delivery time and risk is extremely compelling, especially for Tier 3 carriers, MVNO/Es and Tier 1 second brand operators. We see these as the segments that will look to the cloud over the next few years. For Tier 1 and 2 CSPs, we believe that they will continue to opt for on-premise solutions as they will want to maintaincontrol and have the ability to customize their solution.”FACTORS WORKING IN FAVOR OF SaaS SOLUTIONS in TELECOM INDUSTRYAdvantage Telecom:In SaaS model, the application and data are hosted, the SaaS model cannot succeed without a network. Telcos have a strategic asset that is a fundamental enabler of the SaaS architecture. Win-win for Telecom and SaaS vendors: SaaS vendors can leverage years of Telecom operators experience and expertise in billing small units and time of data usage. SaaS vendors need to get their customer service right and need customer management infrastructure. Telcos have been doing this for decades, which can be leveraged by SaaS vendors.Statistics and facts from broader SaaS market (2006):Salesforce.com has more than 500,000 users SAP has released its own hosted CRM solution Google hosts more than 85 applications, and Microsoft has a range of announcements covering Office, Xbox and others
A considerable number of small operators as well as a few mid-size vendors and even fewer large vendors (esp. those that have taken significant hit on their margins and revenue) have deployed SaaS billing solutions. Further growth in market would depend on the capabilities of the small specialist SaaS vendors to deliver on evolving (product and service) needs of their existing customersGrowing number of small and mid-size operators will continue to deploy SaaS billing solutions if the SaaS vendors can consistently deliver their services and build trust across the market. This will propel market penetration from the existing 11 percent in to the 15-20 percent market share rangeSignificant market penetration by these vendors will compel large COTS/ custom vendors to enter the SaaS arena offering a SaaS variant of their exiting solutions or acquire some of the strong specialist SaaS vendorsEntry of large vendors in the SaaS market will further propel advancements in SaaS solutions, which may enable these solutions to overcome real/ perceived security, control and customization challenges. This will see SaaS market penetration increase up to 25-30%At this juncture, many larger operators would not mind testing the SaaS billing solutions. The SaaS billing market will start expanding exponentially at this stage and will continue if vendors can deliver to satisfy vendor needs