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Telecom SaaS Billing Solutions Case Study

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Telecom SaaS Billing Solutions Case Study

  1. 1. Business Case – Should A Telecom Operator Deploy SaaS Billing Solution? Prepared by: Atul Gulrajani
  2. 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. 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 …Technology Enables Wider Services Consumer Needs Increase… Operators Face Challenges … …Scout for Billing Solutions Outdated Software: • Legacy architectures and processes • Silos High Volume: • Large number and volume of data sets Increased Regulation Competition: • Privatization •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. 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. 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. 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. 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. 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. 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

Editor's Notes

  • 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
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