All about Billing
In an interview with Smart Energy International, Alex Leslie, Executive Director of the Global Billing Association (GBA), talks about the Association and trends in billing.
Please begin by telling us about yourself?
I used to run my own small conference company and ended up specialising in telecoms. In 1992 a consultancy came to me and said “Why don’t you do a conference on billing systems,” and I thought they were nuts because I had no real idea of what they were on about. Nevertheless we put it together and we were expecting maybe 40 people to show up but it attracted just over 200 people.
I specialised in that for the next two years, but I then moved out of conference production and spent time with a billing system vendor among other organisations, before coming back to that particular conference in 1998 when I was contracted to try and add some fresh ideas to it.
Did the GBA evolve from these events?
One of the things I discovered during that time was the industry had matured. So I figured that like any maturing industry, it needed a focal point to represent it – a billing voice to allow people to escalate their messages to other organisations working in other parts of the telecoms world. Also it was becoming clear that billing guys were being blamed for pretty much everything that went wrong.
So we set up the association to do essentially three things. One, to allow telecoms operators and billing guys particularly to get a kind of early glimpse of the impact their services are going to have on billing strategies. Second we thought there was a need for a forum for billing professionals to discuss issues, and we started doing focussed workshops. And third is that having distilled some of the issues in the meetings, we provide a cost-effective, easy way of escalating them.
What about the focus of the association?
We ran it as the European Billing Association for just over a year. During that time we built good relationships with global organisations such as the IPV6 Forum and GSM Association, but we found they would be more comfortable working with something called a global organisation. So we changed the name to fit better with this network.
That was great, but it gave me the job of making it work globally – but it’s happening very nicely and we’ve just had our third birthday. We’ve had a North American facilitator in place for 18 months, who represents us in relevant industry groups and meetings, and we’ve literally just appointed a couple of people to represent us in Asia.
How is the Association funded?
Funding is exclusively via membership fees. Operator members are individuals, so one can get the interested guys in the billing departments. Vendor members pay the majority of the fees.
The Executive Council is around 20 people and is a balance between operators and vendors. This makes a lot of sense as there’s no real point in having a vendor-run organisation like this.
How do utilities fit into the picture?
We didn’t consciously set up a telecoms billing association and I’d like to see an exchange of information on the common themes that run across any competitive company providing services for their customer base, such as keeping costs down, making sure the processes are as tight as possible, whether to outsource, and so on. We are just getting to the end of phase 1 of an ambitious project that allows operators to measure eight key areas in the billing process from the switch in our world, the meter in yours I suppose, right the way through to collecting the money from the customer. I would like to see a later phase include some of the utilities, so people can benchmark and share information from outside their own industry. I think that’s useful.
What are some concerns of utilities?
I think they are looking at very much the same areas as telecoms. They realise that retaining their customers and selling them extra things is better than having huge marketing campaigns to get new customers, and so they are looking at where customer relationship management fits into the overall picture and how best to integrate the systems needed to support it. Hand in hand with that is electronic bill presentation, and to a lesser extent in Europe, electronic bill payment (EBPP). In Germany for instance, more than 90% of telephone bills are paid by direct debit and there’s no need for a web-based payment system. But presentation of bills on the Internet, if one can make one’s customers interact with one there, can cut costs enormously, possibly up to 50%.
In terms of billing systems I would guess utilities are where telecoms was perhaps four years ago. Competition is now biting and they want to launch new services quickly but it is very difficult on the big legacy systems and they are looking at buying off-the-shelf products and how to integrate these.
Are there lessons from telecoms?
I think probably the most critical one we learnt was to put the customer in the middle of the equation rather than the service, as with a single view of the customer one can do a lot more for him, such as offering special deals on the other services one supplies.
Does the GBA set standards?
No. We looked at this but shied away from it as it is just too difficult, and I think there are probably enough standards making bodies. But we certainly support certain standards where we see fit.
To what extent isEBPP likely to take off?
I think EBPP eventually will become an accepted and very widely used way of interacting with one’s service provider.
The hype of a few years ago, that EBPP will cut costs by 80%, really hit a bit of a brick wall because people realised they’d spent a lot of money implementing systems but not enough customers hooked up and they were still producing paper bills as well as posting bills on the web. But one can use EBPP in conjunction with paper-based bills. I get a summary of my telephone bill as well as several pages of itemisation, which go straight into the bin, but how many trees are being chopped down and how much money is being spent on sending out these bills? One could send out a summary and say “If you want to analyse this, go to the website.”
I think it’s also going to help the people who don’t own the network to own the customer as it’s good for all those value-added services. I’ve also seen figures to suggest that if people see their bill on the web, they are much more likely to pay the bill then than leave it, and that cash flow can be improved by something like 9 days, which for a large utility or telecoms company is a lot of money.
What are the trends in outsourcing?
One would have thought that in Europe with the tightening of belts at the moment, this must be the year of outsourcing, but I’m not so sure it is. In Europe anyway, people tend to see their customer data as their family jewels and want to hang on to that as much as possible. But I think it’s different in the utilities, as they tend to split off the part of the company that was doing the billing into a separate company and so are already outsourcing in a fashion. But in the US in telecoms it’s an accepted way of life and maybe 60% of all telephone bills that are sent out are done so by outsourcing companies. Having said that, there are bits of the process that are generally outsourced, the printing and posting for example.
But I think outsourcing will continue to grow slowly, although I don’t think it will explode like some people expect it to.
And any other key trends currently?
I think the focus right now has perhaps gone from the wild euphoria of a couple of years ago when everyone was talking about UMTS (Universal Mobile Telecommunications System) but the handsets weren’t ready for the technology and the whole network was not quite as fast as specified, and we went into a sort of doldrums. I think now we have a sort of reality check in the industry and think as a result we will be leaner and meaner and our costs will be driven down.
Right now I know people who are beginning to get quite tough on the goings-on of the last few years, where the solution to any kind of new service or problem was to buy a new system and I think that trend will not carry on. Another issue is how billing deals with mergers and acquisitions. In an acquisition of cable companies in the UK, the company ended up having to try to integrate five different billings systems and five different customer bases, and it was a nightmare! And I think there will be a lot of consolidation still, but that is how markets and industries grow. This is good, and it’s refreshing!