Transformation means new charging models for the digital world
March 26, 2018 - Aleks
It’s going to take a considered, and possibly radical approach, for service providers to realize the benefits of the so-called digital ‘revolution’. For the majority of CSPs, revenue management needs a complete overhaul by simplifying it and making it less risky and more customer-friendly.
According to McKinsey & Company, when pondering what ‘digital’ really means, for some executives it’s about technology; for others, digital is a new way of engaging with customers; and, for others still, it represents an entirely new way of doing business. For any so-called ‘digital transformation’ to succeed, key stakeholders must have a clear and common understanding of exactly what digital means to them and, as a result, what it means to their business.
Many analysts and industry sources agree on a number of key digital business requirements:
- Support for flexible business models, as digital is partly about changing how value is captured
- Business agility to combat the complex and dynamic, manual systems and processes, which are increasingly unable to deliver on desired business needs
- More orchestration and automation to continue on improvements already made to-date
- The incorporation of end to end analytics to drive automation beyond mere scripted outcomes
- Ultimately achieving a much lower cost of operation.
Service providers have lived through countless new innovations and service introductions – and this constant change and evolution has typically resulted in charging silos. These exist independently to cater for the charging of service usage from different services as they were added to a service provider’s network. Charging silos largely exist because the ability to charge for a service has frequently and strangely been considered as an afterthought.
Much work has been done by many operators to move towards converged solutions where charging for multiple services is being carried through a single platform, enabling proper bundling of services into propositions offered to the market. However, not all is rosy or “done” when it comes to the consolidation or efficiencies that could be achieved by service providers in a digital business context. Even the current standards make distinctions between online and offline charging and the so called billing domain, with many replicated functions, continuing to propagate a legacy split in capability that will hinder future innovation if left unchanged.
When it comes to the monetization of their products and services it is essential to achieve the efficiencies and agility needed to compete and win. A platform that brings fully integrated and non-redundant charging and payment capabilities, and which leverages the best of the technologies that have enabled modern digital companies to thrive, is best placed to drive that success.
With the advent of 5G networks it is expected that service providers will see the promised opportunity to launch, efficiently and cost-effectively, numerous new services (leveraging their own networks and partner product offerings), thus creating an ecosystem for technical and business innovation.
To serve such a diverse ecosystem, service providers will have to heavily leverage automated and software driven orchestration to create dedicated business driven logical networks. But all of this needs a close tie in to the ability to charge a customer for access to, or use of, the services provided.
5G and the expected distribution of capabilities to the edges of the network needs a fundamental mind shift, which legacy revenue management systems will not be prepared for.
In the near term, convergence and the removal of redundant and repeated functional capabilities for different network, service and customer types will be key, and these converged capabilities will need simplified catalog management for the services offered and their monetization.
The enabling technologies behind the charging for these services, and the business models envisaged, including the slicing of the network, needs to be enabled through flexible software, to deliver the speed and agility required. Using modular microservices-based software architectures will be a fundamental need, with changes in the near term being futureproofed for the needs of a 5G network, supporting legacy architectures and 5G in parallel.
To cater for the digital mind shift which has moved users substantially from an ownership mentality to favoring access as needed, a change in charging is needed. Converging the capabilities of real-time charging and offline billing, simplifying the way in which offerings are monetized, and offering a variety of integrated payment options for customers, will bring the desired level of real-time access control and service authorization and charging for new revenue sources and new customer types in an identical fashion.
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