Article posted on February 28th, 2018
Lognet Billing CEO, Kirill Rechter discusses how to maximize value & reduce risks in billing projects and operations
Interview with Kirill Rechter
Top Operator Journal
Billing software for telecoms has been around a long time. In fact, I authored the first syndicated research reports on billing systems back in 1995 and 1996 — one report on wireline billing and the other on wireless billing.
After all these years, billing is still alive and well because a strong billing infrastructure can help a telco boost revenues and improve the customer experience. In fact, as you think about the value of telecom billing, consider this: the largest provider, Amdocs, does a whopping $3.7 billion of business each year, serving mostly Tier 1 telecoms.
Fortunately, if you’re a tier 2 or 3 telecom or utility, there are savvy alternative suppliers you can turn to for your billing needs.
One of those suppliers is LogNet Billing. And in this story I interview Kirill Rechter, LogNet Billing’s CEO: he’s one of the veteran executives of the business, having been at the helm of the company’s MaxBill product for more than 20 years.
Actually this is the third lengthy interview I’ve published with Kirill. What I always enjoy about chatting with him is his knowledge of the deeper issues that service providers need to think about well beyond the obvious. Enjoy.
Dan Baker, Editor, Top Operator: Kirill, great to talk to you again. I’m curious: as you speak to service providers seeking to improve their billing operations, what are the key worries they have about acquiring a new system or starting a new project?
Kirill Rechter: Dan, for many of them, I think the biggest fear is that the implementation will never end. Many suppliers propose lengthy, expensive and complex migration projects that quickly lose sight of the original purpose of the project.
Another big fear is that after the contract is signed, the service provider will end up constantly spending additional budget on change requests for new features.
When we first speak to a prospective client, we talk about LogNet’s history of delivering value and our method of managing a project to ensure value is delivered. Of course, we cover the functions, features and deliverables, but we primarily focus on defining the strategic goals and setting up the framework for delivering value. The result is the client achieves its objectives by improving its billing operation.
When we start a new client engagement, we often offer a proof-of-concept trial system. In these PoCs, we allow the potential client to define and test certain important operational workflows using live data. This addresses many of the major concerns and worries of not achieving the strategic objectives. For existing clients looking to do major upgrades or changes, we also provide similar PoCs and other benchmark testing.
So, is it correct to say that new features and functionality sets are not so important in the big picture?
To a certain degree, the answer to your question is “Yes”. Telcos and all other service providers need to think beyond features and functionality and focus on strategy by modernizing their processes and infrastructure.
Migration is not the goal of bringing in a new billing solution, it’s merely a step along the way. The real goal is to bring in new, modern billing processes that will enable the service provider’s business to grow.
Now the end goal and the value goes by different names today, such as the transforming to a digital experience or improving the customer journey or offering an omnichannel customer experience. These are all important goals, but simply replacing the current billing system with an alternative billing system will not get you there.
After we help our clients articulate and define their goals, we then create business processes and best practices within the billing operation to achieve these goals. Of course, we offer the key features: advanced rating and billing, CRM and order management, partner reconciliation, mobile app, and more.
However, focusing solely on new features or just the migration will not deliver any tangible value. Instead a service provider needs to think strategically and leverage best practice experiences to create a modern billing infrastructure that supports the business growth of the company.
These are lofty goals, but we know that billing operations at tier 2 and 3 operators are highly complex. So where do you start?
Yes, it’s true. Billing operations are complex. And the true objectives of a billing project can easily get lost in a long implementation cycle. We hear about “digital transformation” and “customer experience”, especially in the media. However, service providers often have more straightforward objectives, such as: entering new service markets, supporting complex bundled offers, creating scale-preventive infrastructure, or integrating with a sub-system.
We always recommend delivering maximum value as soon as possible: focus on areas of the project that will deliver the highest return on the service provider’s investment in the project.
And by “maximum value” I mean addressing the most impacting company objectives, while using our expertise as a guide.
Now to do that, you must be honest about priorities. For instance, if you’re not careful, you could waste your time doing many small (albeit safe) steps that don’t bring the client maximum value. I figure stopping the pain or delivering value quickly is worth probably 70% of the decision to buy a billing solution in the first place.
Last year we did two significant and challenging projects — one in energy and another at a telco. In both cases, it took only three months to get essential and valuable parts of billing solution and processes in production.
Now, when first put into production, the telco client did not have the full set of customers on the billing system, but they were up and running and delivering new value in the segments of the business they care about most.
This telco provides services for other operators in rural parts of its country. We started with its two major network operator customers in the first three months and then, over time, we brought onto the billing system other networks in sync with the priorities of the business.
Based on what we’ve discussed so far, what do you feel is the proper role of a system integrator in implementing a billing system change?
Systems integrators definitely have a role in billing projects, though times have changed. In years past, a service provider could justify hiring an expensive systems integrator to come in to consult and integrate the product.
But today, budgets are much tighter, especially in the competitive market segments that we are addressing. This means the billing vendor must have the knowledge to map customer requirements to the product and have the necessary tools to integrate the new processes in the overall operation. One example of this is using an enterprise product catalog as an integration layer for products/services. Another example is the use of a modern service-oriented architecture.
These are things we have been doing for a long time. This does not mean that we do not have system integrator partners. Over the years, we have successfully worked with system integrators and we are always open to such relationships. We have that expertise working in the telco space, and also in energy, gaming and other verticals.
Okay, it sounds like the role of a system integrator is changing, at least in the market segments you are addressing. How does this change impact your relationships with your customers?
My advice is: make your billing vendor your strategic partner. This applies to all service providers — in any vertical. This is something we always aim to do, even when a system integrator is involved in the project.
If they leave the billing issues to us, this will allow them to focus on better serving their customers and growing their business.
Today, many telcos are selling new services beyond traditional voice and connectivity services. For example, they offer smart home services to their retail customers for which the telco is acting as a reseller of third party hardware and software systems.
For this to be successful, a telco needs the billing infrastructure to manage the complex business agreements with its third party vendor partners, which may include dynamic thresholds or volume-based calculations, and automating the partner settlements.
The issue is not having access to the functionality, but rather having access to the knowledge and best practice experiences from a billing perspective. Today, this is an important function of the billing vendor and a role we see ourselves as fulfilling.
This same scenario also applies to the many telcos and managed service providers that are currently looking to offer their business customers virtualized network management and security services.
Modern billing infrastructure is needed to support dynamic service requests and flexible business models to profit from these new VNF services. These virtualized services also involve complex revenue sharing schemes and reconciliation scenarios with the vendors of each network function.
Your point about billing being strategic is now clear. How does this work beyond the initial project implementation?
A billing project never really ends, even after the initial deployment.
What we strive to do is provide the framework and tools for a service provider to be self-sufficient, agile and independent. This is reflected throughout our MaxBill solution by using automation, business process management and micro services. The product has been in the market for over twenty years and I am personally proud of that fact.
However, whenever the customer needs us for critical and complex points, we are always here for them.
Kirill, thank you. This is a fine list of insights and advice that can benefit nearly any service provider or network operator.
Dan, billing has become more and more strategic for service providers and network operators. In fact, it can even be considered a business driver. Billing is certainly no longer just the functional process of calculating usage and sending invoices. This probably was the case when you started covering billing twenty plus years ago.
With this in mind, modern billing processes should support the corporate objectives of a telco. Billing should give a service provider a holistic view of its business operations and provide direct control over its business processes.