How Real-Time Convergent Billing, Policy, Self-Service, and Analytics Are Changing the Future

Transcription

1 June 13, 2014 How Real-Time Convergent Billing, Policy, Self-Service, and Analytics Are Changing the Future Stratecast Analysis by Troy Morley Stratecast Perspectives & Insight for Executives (SPIE) Volume 14, Number 22

2 How Real-Time Convergent Billing, Policy, Self-Service, and Analytics Are Changing the Future Introduction 1 In the communication service provider (CSP) billing world, real-time and convergent have been marketing buzzwords for many years. Recently, as real-time solutions and convergent applications have become the norm, a new marketing buzzword has arisen: analytics, particularly when bandied about with that other buzz phrase, big data. Most readers are undoubtedly familiar with these terms. In simple language, real-time means whatever action is needed happens without delay; the action happens immediately. Real-time billing entails rating & charging and adjusting appropriate balances, along with a myriad of other activities, as the service is consumed. Convergent applications equate to one application covering multiple domains; where, in the past, separate solutions existed for each. The days of one billing solution for postpaid customers and one billing solution for prepaid customers, for example, are gone or at least their days are numbered. These two descriptors, real-time and convergent, share a history. Prepaid billing requires real-time rating & charging, or, at the very least, near-real-time rating & charging; otherwise, customers would regularly consume more than they paid for. Convergent billing solutions that cover both prepaid and postpaid customers one of many forms of convergence require real-time processing. The newer buzzword, analytics, is all about finding answers in data. The first question to ask with regard to analytics is: what data? The next query: what are the business problems to be addressed? Many approaches exist to answer these fundamental questions. The stereotypical big data analytics approach answers the first question with all of it. Gather all the data in one place; then, figure out how it ties together; and figure out what questions to ask. While this is an overly simplistic representation, big data analytics can yield important information. 2 Another approach, which Stratecast terms purpose-built analytics, narrows the data that is examined, along with the questions that can be asked. With this narrowed focus, real-time answers quickly 1 In preparing this report, Stratecast conducted interviews with representatives of the following companies: AsiaInfo Andy Tiller, Vice President Product Marketing AsiaInfo Mohammed Sha, Senior Product Marketing Manager Please note that the insights and opinions expressed in this assessment are those of Stratecast and have been developed through the Stratecast research and analysis process. These expressed insights and opinions do not necessarily reflect the views of the company executives interviewed. 2 Big Data continues to be a focal point for most industries. Suppliers are many; and the amount of money spent by CSPs and enterprises in all sectors now surpasses several billion dollars annually. The importance of this data for addressing customer and business challenges cannot be overemphasized. In fact, Stratecast has a dedicated practice tied to the evolution of the Big Data market, the addressable needs of organizations pertaining to the use of Big Data, and the business opportunities that Big Data affords to both the supplier and enterprise marketplace. For more information please contact your account representative or inquiries@stratecast.com. SPIE #22, June 2014 Stratecast Frost & Sullivan, 2014 Page 2

3 become possible. A very simple example may include looking at a stream of billable usage data and asking who is currently using Facebook on their smartphones. Regardless of their buzzword status, real-time convergence combined with analytics is changing the future for both CSPs and the customers they serve. This report discusses how CSPs globally have embraced real-time convergent billing solutions; and the impact these solutions have on the customer experience, which ultimately translates to the bottom line. This report examines how one solution supplier, AsiaInfo, has moved beyond the buzzword stage to a solution suite that combines real-time convergent billing and policy, real-time self-service, and real-time purpose-built analytics. The report also explains why Stratecast believes the AsiaInfo billing solution suite is changing the competitive landscape for the CSPs that use its solution to monetize the advanced service offerings their customers are growing to love. The CSP Billing and Policy Landscape Stratecast has taken a deep dive into the changing communications marketplace, and evaluated the role of billing and policy management within the CSP business support system (BSS) operations. The examination of over 110 global suppliers that offer a variety of billing, policy management, or combined solutions resulted in 11 reports, released over the last 16 months, along with two final reports to be released in the coming weeks. The functional relevance of these reports to each other and to end-to-end billing are summarized in Figure 1. Figure 1: Stratecast Global CSP Billing and Policy Report Series Source: Stratecast SPIE #22, June 2014 Stratecast Frost & Sullivan, 2014 Page 3

4 Key Insights into the CSP Billing and Policy Marketplace The extensive Stratecast study of the CSP billing and policy marketplace 3 includes a detailed survey and questionnaire sent to over 110 global suppliers, and countless follow-up interviews with executives from these suppliers. This information, when compiled and digested, has led to a number of important conclusions that are especially relevant to this discussion, including: Real-Time, Convergent Billing Solutions are Essential Real-time and convergent are no longer just marketing buzzwords, but rather, table stakes capabilities in the increasingly complex communications services marketplace. Many CSPs still use multiple billing systems, each for a particular silo a non-real-time, postpaid billing solution and an IN-based, realtime, prepaid billing solution, for example. While these systems were once considered bestof-breed, they are aging, nearing their end-of-life, and now limit what types of services a CSP can offer its customers. Replacing such systems with a single solution is important in order for CSPs to reduce operating costs, and to bring new complex service offerings to market. A convergent billing solution must provide realtime processing to address both prepaid and postpaid payment types and, more importantly, to allow the CSP to offer innovative, policy-driven, real-time services that customers want. In addition, a convergent billing solution must now address a range of convergence types: payment methods (prepaid, postpaid, or hybrid); network technologies (fixed, IP, wireless, and others); and service types (voice, data, messaging, and video). Best-of-Breed Gives Way to Best-of-Suite One of the advantages of regularly revisiting a topic is that it hones the ability to identify trends over time. Stratecast surveys the global supplier community, and publishes its billing and policy series every two years. In our 2009 series, best-of-breed solutions were deemed the most essential, 4 only to be supplanted by best-of-suite solutions in Stratecast s most recent survey results highlight the growing preference for best-of-suite solutions 73 percent deemed them essential, and 27 percent as somewhat important. 6 Perhaps even more illustrative: of the over one hundred suppliers Stratecast examined, 30 suppliers offer end-to-end suites that cover all major billing functions up from 20 suppliers two years earlier and when combined, these 30 suppliers account for approximately 81 percent of the total billing market by revenue. 3 Stratecast OSSCS reports published over the past year relative to end-to-end billing include a summary level report of the market with company-level market share analysis and five-year forecast. Another includes analysis of key business requirements. The detailed reports in this series examine segments of CSP billing tied to: billing mediation; rating & charging and other core billing; policy management (rules function); and interconnect & settlement and partner management. To obtain copies of these reports, or any other Stratecast or Frost & Sullivan report, please contact your account representative or to inquiries@stratecast.com. 4 See Figure 17 in Stratecast report: OSSCS 11-01, Global CSP Billing Part 6: Billing Requirements Analysis, January See Figure 12 in Stratecast report: OSSCS 12-09, Global CSP Billing Part 2: Key Market Requirements Analysis, Sept See Figure 4 in Stratecast report: OSSCS 14-06, Global CSP Billing Part 1b 2013 Edition: Business Requirements Market Survey Analysis, July SPIE #22, June 2014 Stratecast Frost & Sullivan, 2014 Page 4

5 Even with the increased importance of billing suite offerings, most suppliers also sell their solution components as stand-alone modules. Modularity has its place, as many CSP deployment architectures continue to involve a multi-supplier environment. This best-ofbreed approach was the most common path to follow in the past; however, it is plagued by an integration tax. This tax involves the cost of maintaining multiple software licenses, the processes for passing information to and from the systems that define the solution, management of the data stored in the various systems supplied by each vendor, and the professional services costs for keeping the solution operational each time a functionality change is needed e.g., new service introduction or price plan update. Figure 2 illustrates the relevance of the single solution supplier best-of-suite concept, as it applies to groupings of operations & monetization functions BSS and OSS. 7 Figure 2: Operations & Monetization (O&M) Solution Evolution Lifecycle Source: Stratecast With advances in computing and data processing capacity over the last five years, solution suppliers can now deliver significant operational and time-to-market advantages through best-of-suite billing solutions. Best-of-suite solutions have demonstrated streamlined 7 As CSPs have evolved from the silo mentality of years past, so have the OSS and BSS solutions that support their critical business processes. In recent years, the lines between OSS and BSS have blurred, with many systems now possessing a level of overlap, such as customer care systems and the customer notification function often included in today's convergent billing solutions. In addition, the roles in which OSS and BSS operate have expanded beyond traditional network-centric boundaries. As such, Stratecast presently embraces the term Operations & Monetization (O&M) to encompass both the traditional OSS and BSS functions and the new areas in which they now operate. SPIE #22, June 2014 Stratecast Frost & Sullivan, 2014 Page 5

6 operability, greater flexibility, enhanced functionality, and lower ownership costs compared with similar best-of-breed solutions. Alongside the increased industry focus on the customer, and the need for faster time to market with new service offerings, the best-of-breed approach is quickly becoming an expensive alternative from the past. Personalization Creates Desire and Stickiness Personalization is a trend that Stratecast discussed extensively in our billing and policy report series. 8 This trend became more pronounced with the introduction of smartphones and their ability to run apps, which often are either free or cost very little money. Apps tend to do one thing, and hopefully do it well. Compare this to the one-size-fits-all programs such as office suites that cost considerably more and provide more functionality than most users really need. Apps allow consumers to personalize their device(s); it is likely that no two smartphones contain the same set of apps after a few days of use. Consumers appreciate the ability to personalize their devices, as evidenced by the explosive growth of both smartphones and the millions of apps that are available for download. 9 Personalization works with telecom services, as well. Consumers want, and will pay for, services that meet their specific needs and that feel designed just for them. There is another benefit of personalized services for CSPs they tend to create stickier subscribers. Segmenting customers via analytics and then combining those segments, is one method Stratecast has discussed for creating personalization, even when each segment by itself is not very personal. For instance, imagine a package aimed at heavy users of Facebook and NetFlix, who have Samsung Galaxy S5 devices, and who regularly roam. 10 Personalization need not be limited to existing subscribers, nor to just the device offered to a new customer. Today, most postpaid mobile services are sold in a package that contains an allowance of resources for instance: 500 minutes of voice, one gigabyte of data, and 100 texts, per month. There may be different levels of packages, but they aren t flexible or personal; and customers cannot easily change their package levels, if change is needed. Why not completely personalize a package based on the specific needs of a specific customer? And why not allow them to continue to personalize, as their needs change? For example, Joe signs up and sets his personalized resources to 831 minutes of voice, 1200 megabytes of data, and 219 texts. Why such strange numbers? Perhaps this set of 8 For the most recent example, see Stratecast report OSSCS 15-06, Global CSP Billing Part 5a: Policy Management (Rules Function) Business Drivers and Market Trends, April This quick discussion only looks at the software side of personalization. A good example of a personalized look can be found in the Motorola Moto x. Made to order, its back plate can be ordered in 31 different colors, with 2 color choices on the front, and 10 accent colors. The back plate can include a personalized message or signature. See Also, Google recently announced project Ara, which will allow customers to create a smartphone with the options and peripherals that are important to them. See 10 See Stratecast report: OSSCS 15-06, Global CSP Billing Part 5a: Policy Management (Rules Function) Business Drivers and Market Trends, April 2014 in particular the discussion beginning on page 32. SPIE #22, June 2014 Stratecast Frost & Sullivan, 2014 Page 6

7 configurable resources fits Joe s personal needs. But, in one month, Joe notices that he has not talked as much, but is watching more videos on his phone. So, Joe converts some voice minutes to data. Or maybe Joe s son talked too much one month, so he transfers some of his unused resources to his son so he does not go over a defined usage limit. Joe does this all in real time, without contacting the CSP. The operator may choose how much to charge, if anything, for this control and convenience potentially unlocking new sources of revenue. Billing Analytics Enters the Mainstream One only needs to visit an industry tradeshow or any CSP billing supplier website to feel the marketing push towards analytics. Beyond the hype, purpose-built analytics using billing data unlocks a range of important real-time intelligence about the CSP s subscribers. What services and applications are they using? Have they encountered any network-related issues? What times of day or days of the week are they most active? Least active? Which device are they using, and when and how are they using it? All of this information, in context, allows the CSP the opportunity to provide more proactive customer service and a better customer experience. A better experience leads to more satisfied, longer lasting customers, who may be open to additional service offers. Marketing Versus the Real World Marketing messages focus on what is believed to be possible and not always on what has actually been accomplished. This is not to say that marketing is a bad thing; marketing often pushes the status quo forward. During nearly every interview Stratecast holds with billing supplier executives, we ask about what their customers are actually doing. It is essential to not only know what may be possible with a particular solution, but to understand what different carriers, in different regions of the world, offer to their subscribers, and how those offers are received. This intersection of possibility and reality leads to insight. Insights based on actual customer usage of a supplier s solution offerings may have global application, or may only have regional appeal. Ultimately, the universality of what works in one region cannot be known until it is tried elsewhere. Examining one billing supplier AsiaInfo 11 provides an opportunity to glean insights into what is now delivered to consumers by the largest carriers in China. Despite the success AsiaInfo has experienced in the world s most populous country, the company has had little exposure in other 11 Headquartered in Beijing, China, AsiaInfo supplies a range of business support and monetization solutions. Its largest customers are China s major telecom carriers, including China Mobile, China Unicom, and China Telecom. AsiaInfo explained to Stratecast that it addresses a large percentage of the business support needs in China, based on the Chinese CSPs that use its products, and the number of customers engaging in services offered by these carriers. AsiaInfo reports that its solutions support nearly a billion customers of these service providers. In 2009, AsiaInfo merged with Linkage, forming the publicly traded company known as AsiaInfo-Linkage. In recent months, the company converted to a privately held entity, and began to rename and rebrand itself as AsiaInfo. SPIE #22, June 2014 Stratecast Frost & Sullivan, 2014 Page 7

8 regions of the world until recently. Through AsiaInfo s recent win with the Telenor group in Europe, the company is now set to bring its market successes from China to the European Union. 12 Insights from Asia-Pac; Now Available in Europe AsiaInfo offers real-time, convergent monetization capabilities with policy, focused in a best-of-suite configuration, combined with purpose-built real-time analytics, and offline big data analytics. The company s Veris product suite, as shown in Figure 3, includes: Veris Billing Real-time convergent charging and billing, including online and offline charging and policy Veris CRM Customer relationship management (CRM) designed to support the business and operations needs of telecom operators internally and in direct support of customers externally Veris BI Business Intelligence (BI) for operational and strategic insights via offline, telecom-specific, big data analytics Veris C 3 Convergent Context-awareness Center (C 3 ) enables detailed knowledge about individual customers, in context, via what Stratecast would define as real-time, purpose-built, billing analytics Veris O 2 P Open Operational Platform (O 2 P) provides business-to-business-to-consumer (B2B2C) capabilities, enabling CSPs to collaborate with Over-the-Top (OTT) players or with other non-csp partners Figure 3: AsiaInfo Veris Product Suite Source: AsiaInfo 12 See the following press release for more information: SPIE #22, June 2014 Stratecast Frost & Sullivan, 2014 Page 8

9 So, what is the power of the Veris suite? And, is it changing the future for CSPs and their customers? Are the possibilities defined by the AsiaInfo marketing messages becoming a reality? Earlier in this report, personalization was discussed, along with how impersonal most current package offerings are for postpaid mobile services. AsiaInfo, through its Veris suite, offers a different approach via what it calls Real- Time Self-Service (RTSS). RTSS allows subscribers to customize their resources, convert unused resources into something they need, and give resources as gifts to friends and family. All with a smartphone app or a Web self-care portal that are fully customizable by the CSP. Utilizing the AsiaInfo solution, a phone can pour minutes to share from one customer to another, as shown in the image to the left. Upon first viewing, the initial thought is cool marketing, but This is more than just cool marketing. CSPs today are utilizing RTSS, and their subscribers are responding. The hypothetical example presented earlier, with Joe and his unique resource needs, is not hypothetical RTSS enables the scenarios presented and more. According to AsiaInfo, the Veris suite and RTSS allow subscribers to gain control of their data experience on their device, without the need to wait, as noted in Figure 4. Resources do not have to be minutes, megabytes, or texts. Stratecast believes the forwardlooking CSP will also partner with popular OTT companies to sell, perhaps, minutes of Skype calls, views on YouTube, or other OTT services. Figure 4: AsiaInfo Real-Time Self Service Examples Source: AsiaInfo RTSS, as part of the Veris suite, includes the power of policy to ensure quality of service. One can envision a subscriber opting, for a small fee, to increase his/her bandwidth for a specific application, for a period of time often called Turbo Boost. Imagine a consumer riding the train home from work, but realizing he is not going to make it for the start of a sporting event he wants to watch on SPIE #22, June 2014 Stratecast Frost & Sullivan, 2014 Page 9

10 TV. Using his phone, this customer can simply Turbo Boost the appropriate TV on-demand app, and watch the beginning of the game, as he travels. With shared plans, RTSS also provides budget controls, for the group, family, enterprise, and for the individual within those groupings. It is important to note that the power of these examples comes not from the front-end user interface, but from the capabilities provided by the convergent, real-time billing and policy engine defined by the Veris suite on the back-end. Powerful? Yes. Changing the future for CSPs and their subscribers? Yes. Real-world? Yes. But what about analytics? Analytics is the secret sauce that ties it all together and makes everything better. Offline analytics Veris BI allows CSPs to tune their offers and design new ones. If a current offer is not selling well, perhaps by adjusting the price, the offer will sell better. The customer base can be segmented, and deep insights about current customer behavior can be gleaned. With insights about the subscriber base, new offers and services can be created that appeal to current subscribers. As noted earlier, segmenting customers, and then combining those segments, is a means for creating personalization, even when each segment by itself is not very personal. Real-time, purpose-built analytics Veris C 3 particularly when combined with the actionable intelligence provided by offline analytics, allows for real-time decisioning, which Stratecast believes is the next important development in an end-to-end billing solution strategy. This ability to gain insight about current customer behavior, to make relevant and personalized marketing offers, and to define timely policy changes for precisely targeted audiences, at the ideal moment for each individual customer, provides a win-win for the customer and the CSP. This could be as simple as offering additional resources when the customer is low on a particular resource minutes of voice, for instance or might be more sophisticated. Imagine a subscriber that has searched for what to do in New York and booked airline tickets and accommodations in the city. Might they be receptive to a discounted Broadway ticket? The possibilities are endless and the potential revenue streams intriguing. Real-time, convergent billing and policy solutions, particularly when combined with purpose-built analytics in a best-of-suite offering, are changing the future for CSPs and for their subscribers. And not just as marketing possibilities, but in the real world. AsiaInfo and the Veris suite provide proof that these crucial concepts already work in one region of the world, with very large carriers and their multiplicity of subscribers. Will these same concepts work elsewhere? Only time will tell; but Stratecast believes they will. SPIE #22, June 2014 Stratecast Frost & Sullivan, 2014 Page 10

11 Stratecast The Last Word At the TM Forum event in Nice, France last week, one could not help but notice analytics. This marketing buzzword was associated with seemingly every product, of every stripe. Two older buzzwords, namely real-time and convergent, still appear, but real-time and convergent no longer are just marketing terms disassociated from reality. They are table stakes requirements for all current CSP billing solutions. Stratecast believes analytics, in the form of real-time, purpose-built analytics, will soon become a table stakes requirement for CSP billing solutions as well. Real-time convergent billing suites, powered by policy, and now further enabled by analytics capabilities, are changing the global landscape for CSPs and for their customers. The smartphone or smart device of today, with its advanced services and capabilities, would have been a science fiction invention only a decade ago. While consumers are intrigued by the devices themselves, few realize the key role the CSPs play, supported by operations and monetization software, and with monetization billing being the keystone. Service providers, as the name implies, deliver services: first voice, then text messages, then data, and now a seemingly limitless variety of services enabled by the data connection. In the past, CSPs only provided their own services, but now are partnering and enabling other players, even in other industries, to offer innovative new services. Even in partnership, CSPs and their operations and monetization support suites play a pivotal role: providing the connection, owning the customer relationship, and having a much broader view of the entire customer, contextually with billing at the center of it all. While marketing paints a nice picture of what might be possible, the best insights come from the real world. This moves one from buzzword to reality. AsiaInfo and its Veris suite deliver proof of not only what is possible, but what is working with real customers in China at the largest carriers in the world. Soon, those insights will be tested in Europe; and Stratecast believes that, on the whole, these tests will be successful. Not everything will translate directly, but enough will, so as to allow AsiaInfo to continue its expansion in Europe and beyond. More importantly, one company pushing the status quo successfully leads to imitation. Stratecast expects other billing suppliers and other CSPs, globally, to continue to expand on what is possible and bring those possibilities into reality. Troy M. Morley Operations & Monetization (O&M) Strategy Analyst Stratecast Frost & Sullivan tmorley@stratecast.com SPIE #22, June 2014 Stratecast Frost & Sullivan, 2014 Page 11

12 About Stratecast Stratecast collaborates with our clients to reach smart business decisions in the rapidly evolving and hypercompetitive Information and Communications Technology markets. Leveraging a mix of action-oriented subscription research and customized consulting engagements, Stratecast delivers knowledge and perspective that is only attainable through years of real-world experience in an industry where customers are collaborators; today s partners are tomorrow s competitors; and agility and innovation are essential elements for success. Contact your Stratecast Account Executive to engage our experience to assist you in attaining your growth objectives. About Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today s market participants. For more than 50 years, we have been developing growth strategies for the Global 1000, emerging businesses, the public sector and the investment community. Is your organization prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies? For more information about Frost & Sullivan s Growth Partnership Services, visit CONTACT US SPIE #22, June 2014 Stratecast Frost & Sullivan, 2014 Page 12 For more information, visit dial , or inquiries@stratecast.com.