Thursday, March 5, 2015

Blueprint: Catch the Customers While You Can!

by Lars Mansson, Senior Director of Product Management and Strategy at DigitalRoute

The American entertainer Milton Berle once remarked, “If opportunity doesn't knock, build a door.”  Berle has never been known as a telco BSS visionary, but apply his thinking to the legacy stack and his advice is right on the money. Except, instead of a door, you build an online counting system (for which the door is simply a metaphor).

Why do this? Because the road to commercial opportunity for mobile CSPs today runs through a much-needed new approach to billing strategy.

Software vendors have become fond in recent years of claiming that the inherent complexity of modern telecom services drives a parallel requirement for complexity in the enabling solutions they sell. However, their argument that CSPs must rely on complex software to monetize complex services is false. In fact, unnecessary IT complexity simply traps CSPs into slow, expensive solutions. Thus, while many vendors are trying to lock the door behind their products, the telco would be better off to do what Berle suggests: build a new door.

A quick review of progressive use cases underlines this theory. In reality, the complexity in today’s telco market, such as it is, exists almost entirely on the side of the ledger of the service provider (SP). Software needn’t come into it (something any number of modern use cases proves).

Let’s consider an example: An operator wants to “push” a service package, or bundle, of the sort favored by much of the industry. The exact offering is tailored to the subscriber’s historic usage figures. It provides a mix of voice, data and text that subscribers are known to use. Knowledge of past behavior gives our operator an insight into the sort of service offer to which subscribers are likely to be responsive.

So far, so good. A subscriber accepts the bundle offer, but to differentiate this competitor’s similar offerings, our operator, rather than push for top-ups once various service limits have been met (as is common in saturated markets), decides it would be more valuable to pursue a different sort of upgrade strategy, one that will make the SP stand out from the competition.

Why do this? For one thing, because our operator knows (or at least suspects) that his average customers often have a bit of spare money in their pocket and might be willing to buy something else he has to sell, like a networked movie that could be watched on the subway to work. Plus, our operator knows that his rivals aren’t taking this sort of reactive and creative approach (because, not having listened to Berle, they haven’t built a door to grab the opportunity).

To exploit the potential hidden here, our operator decides he needs to offer his customers a flexible and not a “hard stop bundle/package” service like everyone else. Increased market share and a reduced churn rate are suddenly within reach, but the time has come to get the door building equipment out.

The door is represented by software functionality that executes in a far cleverer way than service-enabling software has in the past. Data usage is smoothed over a time period by capacity/bandwidth control. If usage patterns repeat, then upgrade options may yet come into play, but the operator doesn’t cut off or hard-throttle customers at their consumption limits. Instead, the SP makes sure customers get a ration of connectivity spread over the whole month: a theoretical win-win for all parties.

The operator also takes advantage of the opportunity to apply a “floating bundle” concept.  Here, if the subscriber’s voice minutes are nearly consumed but data in the package is largely untouched, the SMS will offer the subscriber either the chance to buy more voice minutes or to move unused data consumption balances to the voice product. The text reads, “We can convert 1 GB of unused data to 2 hours of national calls, answer YES.”

If this sounds complicated—and most BSS vendors would like you to believe it is—then the good news is that it isn’t. The new door is, in fact, amazingly simple to use. It has a handle. It opens. It shuts. It handles a lot of traffic quickly. And in relative terms, it’s cheap. In fact, this door is the sort of customer-responsive, creative service offering that can be enabled by offloading rather than expensively augmenting the already costly BSS legacy stack.

Everything described above can be achieved through what is becoming known as a Usage Management (Service Control) BSS strategy that offloads thick traditional BSS in favor of smart, agile and lean implementations.

If we’re being literal, Usage Management can best be thought of as pre-configured use cases (rather than a metaphorical door). It manifests itself in the IT stack as a service delivery and execution engine designed to support CSPs where usage bundles form the core of a competitive strategy. The approach, which enables an outcome widely identified as “lean billing” is based around three central features:

  • Easy configuration allows pricing models to quickly be monetized and managed in simple buckets, bypassing costly changes to, or even direct involvement with, legacy rating and billing.
  • Through total subscriber control via a holistic data layer that is system- and silo-agnostic, a better end-user experience is delivered to the customer.
  • Quicker times to market due to both the inherent configurability of the approach itself and the ability to offload unwieldy BSS components otherwise relied on within the execution stack.

There are, of course, times where complex BSS functionality is required to support complex services. One obvious example is with enterprise billing. Such offerings are very much the exception rather than the billing rule. More commonly, far more than half of regularly accessed telecom services can be monetized simply by taking advantage of a “lean” BSS approach. The only losers when this happens are the software vendors who encourage their customers to slam the door of potential in their own faces! This, as we all now know, is neither wise nor necessary.

About the Author
Lars Mansson is DigitalRoute’s senior director of product management and strategy. In this role, he is the owner of the company's product portfolio, go-to-market and the long-term development of its products & solutions as well as its product strategy, roadmap and thought leadership. Lars has a background in technical pre sales and was previously a system architect and technical coordinator for mediation systems at Tele2 in Sweden.

About DigitalRoute

DigitalRoute has been providing new approaches to enterprise data management since 1999. Its software platform offers high throughput and provides a unique degree of user configurability, processing all usage and statistical data extracted from the networks, including both billable and non-billable events. Over 300 leading companies worldwide actively use DigitalRoute technology to meet their data management needs, including a number of OEM partners who use our platform as a central part of their own offerings. DigitalRoute is built on the core values of Expertise, Open- Mindedness and Commitment. DigitalRoute is a venture-backed, privately held company with a turnover of 30m EUR in 2013 and a record of profitability since 2005. With close to 200 employees, the company is headquartered in Stockholm, Sweden with regional offices in Gothenburg, Atlanta, and Kuala Lumpur.

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