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Service provider billing system fundamentals

Billing systems for service providers vary considerably in their focus and complexity. This tip looks at the fundamentals of working with billing systems.

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Billing systems for service providers vary considerably in their focus and complexity, and this is due to the variety of service/business models in place. At one end of the complexity range, providers may find that billing system products for standard enterprise use are completely suitable; at the other extreme, they may find that only highly specialized provider billing packages will suit their needs. The two primary issue areas for billing systems are those of integration into the operations system support and business processes, and support for the proper billing paradigm set required for the service mix.

Read about the fundamentals of working with OSS
Billing systems have to be integrated into the overall context of service provider operations. Service provider billing systems may address any or all of the following issues, depending on the business model and service set of the provider:
  1. Journal integration. Most service providers offer at least some services whose billing requires the collection of journaled data from call recording systems or other service event generation systems. This data can be broadly classified as "call event data" or "usage data," where the former collects information on service relationships created, and the latter, on the usage of resources (bandwidth, packet counts, etc.). There is a general industry trend away from usage pricing, but in many cases this level of detail may still be required for regulatory/compliance reasons.

  2. Customer management integration. Obviously, billing systems will have to integrate with customer relationship management systems (OSS elements) at a higher level to obtain information such as customer name and address. It will also normally be necessary to use customer data for information on pricing, service plans, and the applicability of certain specialized charges, such as taxes. Customer-care activities will normally require billing application access, since many inquiries will concern billing issues.

  3. Service management and activation integration. Providers typically demand that service orders and, more specifically, the activation, deactivation and change to service conditions be directly integrated with billing systems, even when the events may not change actual charging. Many jurisdictions require that operators list service features and service plan data on bills.

These integration requirements are normally in the scope of operations support systems (OSS), where such systems include a billing module/process. And where an integrated package or a standard operations system support framework is followed -- the TeleManagement Forum's enhanced Telecommunications Operations Map (eTOM), for instance -- this integration will fall out of the OSS activity.

Of the three issue areas for billing integration, the linkage to customer relationship management is the most critical. Billing questions generate a significant amount of customer interaction, and billing systems can both reduce the chances of a customer billing inquiry and improve the response to one that occurs.

The format of a bill must accommodate the need of the provider to communicate the charges and amount due, the needs of the regulatory processes for disclosures, the ability of the customer to understand the information, and the opportunity a bill presents for communication with the customer, even on non-billing issues.

Most leading-edge billing products are based on a separation of the processing of billing items and the presentation of those items. This accommodates not only the need to create flexible bill formats in the printed bills but also the desire by most providers to encourage online bill review and payment. The same capabilities can be used to give customers and customer service representatives different views of the same account data. The most desirable structure allows bills to be composed in a flexible language like XML, based on variables exposed during bill data collection and calculation. This capability will normally provide considerable flexibility, but some service providers may require additional features, such as the ability to support multiple languages to accommodate ethnic groups within the customer population.

Service provider billing packages will normally accommodate a wide variety of billing paradigms, which can be broadly grouped as billing calculation paradigms and billing integration paradigms.

Billing calculation paradigms embrace the choices in fixed-plan billing, multi-service discounts, incident (call or usage) billing, and so on. Most billing systems will support all of these options providing that they support the input of the proper journaling information, but you should verify that the incident billing calculations available will support your specific needs there, since this is the area where the greatest variability in product capability exists.

At the highest level, the products support business unit billing integration to accommodate the so-called "triple-play" multiple-service packages, where each service may have its own operations processes and may even be provided by different business units. Within this high-level structure, the normal hierarchy would be to include services, which are individual retail offers, and features, which are optional additional capabilities, and within these to provide for both package/feature prices and incident/usage prices.

Taxes and fees are not normally applied uniformly across all business units, services, and sometimes even features. Thus, it is important that the products accommodate these for each business/service combination and not just at the total-bill level. Basic telecommunications services are often not subject to local taxes, for example, but some advanced services may be. Similarly, universal service charges may be applicable to some services on a bill and not to others.

Any changes to billing systems should be tested and verified with great care because errors that generate customer inquiries will be very costly to resolve, and failure to accommodate all the applicable regulations may subject your service provider to fines and penalties.

About the author: Tom Nolle is president of CIMI Corporation, a strategic consulting firm specializing in telecommunications and data communications since 1982. He is a member of the IEEE, ACM and the IPsphere Forum, and publisher of Netwatcher, a journal in advanced telecommunications strategy issues. Tom is actively involved in LAN, MAN and WAN issues for both enterprises and service providers and also provides technical consultation to equipment vendors on standards, markets and emerging technologies.

This was last published in July 2007

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