Taking Advantage of Digital Transformation: Optimizing Subscription Billing

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The digital economy is opening up doors of opportunity in almost every industry, including telecommunications. In fact, digitalization is helping telco providers accelerate business transformation in a myriad of ways. At the core of this are new business models which will help telcos engage customers more effectively and improve operational excellence.

A key part of a telco’s digital transformation is around the real-time monetization and optimization of subscription and usage-based services. For example, subscription billing is a fundamental process that touches every customer and every transaction. As telcos look to take advantage of ways to optimize customer experiences, it’s imperative that their billing engines have the agility, flexibility, and scalability to quickly adapt to new scenarios and new revenue streams. It’s the only way that they will be able to meet and proactively exceed the rapidly changing and diverse needs of their customers.

The power of an innovative billing engine

By transforming their core billing capability, telcos can create a transparent customer experience, build customer trust, and support key business decisions and processes. This kind of billing engine, which ideally will include functionality such as subscription order management, charging, pricing simulation, invoicing, customer financials, flexible solution billing, mediation and service control, will allow telcos to:

  • Rapidly launch customer-centric subscription offers that are highly competitive in nature.
  • Exploit fast-moving market opportunities by quickly changing customer pricing and partner revenue-sharing models.
  • Ramp up efficiency through the integration of the entire order-to-cash process.
  • Create visibility across the end-to-end process from customer management to revenue recognition.

Let’s take a look at pricing simulation. This kind of innovative tool will allow telcos to optimize pricing strategies and test and simulate new business models against historical customer usage trends. This will give them an unprecedented advantage that will help separate them from other telcos.

Forrester: SAP hybris leading the way

A recent Forrester Wave report looked at subscription billing solutions. The report provides evidence that the billing market is changing and it also emphasizes the need for telcos to look for billing solutions that support their digital transformation.
The report includes a review of the SAP hybris Billing solution, which allows telcos to monetize their digital transformation when moving to subscription and usage-based revenue models.

The report states that SAP hybris Billing is “well suited for B2B quote-to-cash scenarios, [and] the solution also has a number of B2C deployments that commonly leverage a differentiated capability to manage revenue share with partners, including the payout of partner commissions in a marketplace of app and content partners, or to channel partners.” One customer reference is cited as saying, “we haven’t yet seen a billing/rating scenario it can’t handle.”

SAP hybris Billing received the highest possible scores in the following categories: Financial Performance, Partner Ecosystem, Revenue and Managed Subscription Revenues. The solution also earned the highest score among all vendors in the Subscription and Recurring Billing Management category.
The position in the report is justified with an increasing number of Tier 1 customer references globally including a major operator in North America that uses SAP hybris Billing and says that its real-time rating and charging platform has provided their subscribers with an unprecedented level of transparency and control that has significantly improved the customer experience. SAP hybris Billing also helps them respond quickly to customer and market demands and to monetize new types of services.

The operator can now quickly design new service types, pricing models and offerings, test them across different groups of customers and quickly iterate until its has the perfect offering. With so many different possibilities, coupled with real-time feedback and rapid innovation, the company is taking steps to become a digital enterprise, recognized in the markets it serves as an innovator.

The new compliance process is complex – and time consuming

Although it doesn’t go into effect for a while, telcos should start preparing for IFRS 15 now to avoid incorrect reporting and non-compliance.

For instance, traditional billing data will not suffice, as there will be a need for additional integration points to retrieve data for revenue recognition, such as contract management, commissions, and accounts receivable. Data quality might also be a concern, as poor quality would impede the adoption of the IFRS 15 standard. And with additional integration points, there will also be a need to increase auditing and reconciliation activities.

The compliance to IFRS 15 may require a lot of manual work, especially in companies that have a large volume of contracts, unless an automated process is implemented. Therefore, for many companies, complying with IFRS 15 standards may require significant investments into new systems. The good news is that this compliance presents an ideal opportunity to improve systems and processes that were already outdated. It’s also an opportune time to employ better business analytics for such things as profitability per contract, fraud, churn analysis, and next best offer.

Start soon – and start smart

To learn more about IFRS 15 and how your company can more easily comply before the 2018 deadline, visit [link to press release,], SAP Revenue Accounting and Reporting application, or SAP hybris Billing solution.

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