Revenue management is the flexible enabler of CSPs’ digital service transformation
Bob Titus is vice president of Global Converged Solutions at NetCracker Technology. Here, he tells George Malim that as communications service providers (CSPs) look to expand their service portfolios and play wider roles in the digital services landscape, revenue management capabilities will enable rapid and flexible service introduction not just for CSPs but for their partners as well. Titus predicts that CSPs will sell their BSS capabilities as a service to partners through the utilisation of cloud-based platforms with open interfaces in order to enable partners to set up services and offers themselves.
VanillaPlus: As CSPs consider their digital service transformation, they must consider expanding their services ecosystem. What are the roles of partner management and settlement in this context and why do they need to be an essential component of next-generation BSS?
Bob Titus: As you look at the competitive landscape and the impact of over-the-top providers (OTTs), it’s clear that CSPs must become digital service aggregators. They need the ability to onboard partners and efficiently charge and settle for services provided by those partners. Partnerships will become more and more dynamic in nature, so integrating these offers and prices and being able to charge, bill and settle increases in importance. Partner lifecycle management is now about much more than just adding new services to the catalogue; it encompasses how to change the pricing and how to account for the changes.
Partner management must become an important aspect of the BSS platform by enabling partners to integrate efficiently with the CSP. It’s not a case of the CSP deciding which partners to add to their offerings – it’s about providing an environment that enables partners to connect to the CSP.
I envision a world where the offers that CSPs deliver will be dynamic in nature. There will be models where partners sponsor data and service plans and where CSPs pick the services they bundle depending on the context of the user. That’s an entirely different concept and paradigm to how we operate now. I foresee a very different operating model where the user chooses online or OTT services to bundle into their package. In addition, CSPs may select their partners on the fly to address the specific needs of a customer.
VP: BSS for postpaid has traditionally been offline and batch based. Does it need to change? Why is there a need for online revenue management systems in the postpaid world today?
BT: The situation is definitely changing. CSPs are selling packages based on buckets of data usage, shared usage buckets and even usage-based billing. With today’s network speeds, those allocations can be consumed very quickly. These combinations create a need for real-time capabilities for postpaid users. The line between prepaid and postpaid is disappearing as trends to charge for buckets of data emerge and offers that are prepaid in nature are made for postpaid customers. An example of that would be a roaming data top-up which requires a postpaid user to agree to pay for the top-up.
At the same time, pricing is becoming more dynamic. Pricing could be based on the time, volume and
customer value associated with consumption – any combination of factors can be considered. This
requires CSPs to instantiate services in real-time while incorporating current balances and usage patterns. There will still be the same efficient batch processing for rating, but you will see the need for more online, real-time processing of offers and revenue management.
VP: What are the foundational BSS elements needed by CSPs for data monetisation?
BT: Certainly real-time usage and balance management are fundamental capabilities, but those also need to extend to give customers the ability to run their own accounts and billing. Self-service user- and device-centric profiles and policies will give customers the flexibility and usage control they expect, which requires the BSS platform to support that functionality. For example, I could allocate a certain amount of my service plan to my son’s iPad and a different amount to his phone and authorise a certain level of on-demand content purchases. Flexibility is important in other ways too. CSPs need flexible billing models and the flexibility to allow customers to pay how they want, whether that’s postpaid, vouchers or via a credit card. That places requirements on the CSP and the underlying BSS.
The other foundational piece is embedded business analytics for campaign management. This will become critical to enabling CSPs to differentiate themselves and their offers in the marketplace. In terms of being able to monetise services, this capability will let CSPs understand customer usage, users and their devices as well as understand current balances and the trends and buying patterns of customers to create dynamic and real-time offers. Ultimately, that will provide a better customer experience and introduce the opportunity to upsell additional services. Those all contribute to enhanced data monetisation.
VP:What role will revenue management play in the world of M2M and IoT?
BT: It comes back to revenue management being the enabler of those services. M2M and IoT bring new business models and exponential transaction volumes, which requires flexibility and online usage models. CSPs also need the flexibility to expand the role of revenue management to offer billing as a service and direct-to-bill services to enable M2M and IoT functions. In this sense, revenue management capabilities are the enablers and a service that CSPs could deliver to support smart cities, biometrics and many other IoT applications. These new markets will involve transactions that CSPs can price and manage on behalf of their IoT partners.
VP: How can BSS play a key role in innovation and service enablement?
BT: If you look at the role of BSS in new product introduction and service enablement, it’s clear that in the past it was often an impediment to getting those services to market. If you look at the capabilities we’ve already talked about, they’re all great – but if it takes months to update the BSS and introduce these capabilities, you really can’t compete. Therefore, all
these services that enable revenue generation and innovation must be easy to apply in the BSS and must be exposed in such a way that months-long IT programmes are not required.
The industry needs a DevOps (development operations) approach so new products and services can be brought to market in hours or days rather than weeks or months. It’s a new operating paradigm for CSPs, and it must be enabled through BSS. A shift in CSP operating mentality is occurring as they
begin to ask how BSS can help them introduce new offerings and services, instead of asking how long it will take to upgrade the BSS to support new services. CSPs are recognising the BSS as an enabler and are asking, “How can we use BSS capabilities to bring services to market?”
VP: How are these industry trends affecting the underlying BSS platforms?
BT: As we look at the overall trends affecting our CSP customers and the industry as a whole, the BSS platforms must become even more flexible and enable faster time to market. We are seeing BSS platforms evolving into cloud platforms. We are also no longer seeing prepaid and postpaid BSS as separate functions – convergence has become a reality and everyone sees the need to avoid creating separate siloes.
At the same time, billing has become a separate layer from usage and policy management. You see revenue management functions separate out into layers so they can be exposed and managed individually. This concept of open BSS is critical. Providing SDKs (software development kits) and APIs (application programming interfaces) to provide microservices will become an enabler not only for partners and the onboarding of new services but for the CSPs themselves. There’s no reason a partner shouldn’t be able to develop an application or service themselves by accessing a CSP’s revenue management function.
This is where we are headed. Ultimately, BSS will be cloud-based, open and componentised and that will allow flexibility within the CSP and wider ecosystem and become a critical enabler of CSPs’ digital transformation.