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Outsourcing Interconnect Billing – the debate continues
Publication: 04.09.2008
Interconnect billing and rating requires expertise, puts great pressure on billing systems with in-house solutions and occupies personnel who could work on more revenue-generating activities.
In our experience, major operational cost savings are possible through outsourcing interconnect billing and settlement. This was proved in a recent case study of an operator with 2,000,000 subscribers. The study showed that by adding up cost savings, improvements in reconciliation and reductions in revenue leakage, the savings rapidly reached a yearly gain of 1,000,000 Euro..
When evaluating an in-house solution vs outsourcing there are five key areas to consider:
Hardware
Interconnect billing requires immense IT capacity and, because of the huge risks involved in downtime, capacity must comfortably exceed peak loads with mirror-image back-up. Anything less is risky, so significant capital expenditure is required – and this cost can be eliminated.
Software
Software is a key issue and, irrespective of whether in-house or third party solutions are applied, ongoing costs and demands on staff time for software maintenance and upgrading are significant.
Outsourcing involves a single software solution, with costs shared by a large number of clients.
Interconnect Business Knowledge
It is well-known throughout the industry that it is impossible to collect, or even expect to collect, 100% of interconnect revenues. It is also recognized that there are many ways in which revenues are lost. The major task is to ensure that a maximum of traffic is billed.
Tracking erroneous CDRs and making the necessary corrections is staff and system time-intensive. The clear conclusion is that interconnect efficiency relies very much on billing and settlement expertise and experience. This requires high level knowledge and correspondingly well-qualified staff – and they are expensive.
Futureproof Solutions
Operators have to cater for future rating scenarios and, with an in-house solution, this means allocating resources. VoIP, rating by service quality and content charging – just to name a few – are opportunities which have to be assessed and prepared for. Outsourcing means that these eventualities are already taken care of.
Time to Market
Time is definitely a major issue in telecoms. Delays in the launch of services trigger major revenue losses – and delays are frequently caused because the back office is not ready.
Outsourcing eliminates these problems and new services can begin generating revenue as soon as they are technically ready.
