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Achieving High Performance in the Communications Industry How Accenture Helps Operators Develop Superior Billing Capabilities

Accenture: Helping telcos achieve high performance through superior billing

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Responding to increasing competitive challenges and shifting customer demands requires telcos to have a highly flexible, cost-effective billing function. Yet many global telcos face a major challenge when it comes to billing—especially in terms of leveraging their billing systems to support convergent billing and identifying and eliminating sources of revenue leakage.

Accenture is the trusted provider that helps leading telcos around the world address their most pressing billing challenges and achieve high performance. In fact, our successful track record, and leading-edge thinking and ongoing research on the characteristics of high performance in the communications industry have led the industry analysts to rank Accenture among the top professional services firms in the billing arena. According to Gartner, Accenture was ranked second in the overall Telecom Operations Management Systems market worldwide in 2008.1 Our three decades of experience in billing processes, organization and systems implementation—which includes working with the leading billing software packages—gives Accenture important insights and an independent point of view on the best approach to improving billing operations. In fact, Accenture has

successfully completed billing projects for more than 200 communications clients around the globe and has one of the largest installed bases of billing systems in the world. Furthermore, our portfolio of billing and revenue assurance offerings covers the full breadth of billing operations and leverages the skills of more than 2,500 billing professionals and the Accenture Global Delivery Network. Drawing on these key resources and assets, Accenture can help telcos address their billing challenges by transforming their billing function and enabling it to meet the requirements of today’s converged world. We do this in three key ways. We can develop and implement new billing systems and processes that support convergent billing, billing for content and prepaid and postpaid billing. We can create a superior revenue assurance function that enables telcos to bill for and collect all the revenue that is due.

And we can assume responsibility for a part or all of a telco’s billing function through an outsourcing or managed services arrangement. Telcos such as Telstra and Zhejiang Telecom have benefited from Accenture’s billing knowledge. They have realized dramatic improvements in billing efficiency and effectiveness, thus reducing the cost of the billing function overall while facilitating the timely and accurate collection of revenue. They have created a more compelling billing experience, which serves as a competitive differentiator that helps attract and retain customers. And, they have developed the ability to more quickly launch new products and services to capitalize on fast-emerging growth opportunities. We invite you to read on to learn more about how Accenture can help your organization transform its billing function into a distinctive capability that can help you achieve high performance. 3

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The case for change in the billing arena

The forces of convergence are reshaping the communications industry. Service providers everywhere are migrating to all-IP enterprises and 3G at an accelerating pace. For wireless, wireline and cable companies alike, broadband network capabilities and devices are enabling next-generation, multiservice offerings. Developing and profiting from such offerings will be a key to achieving high performance in the coming years. However, many operators face a significant challenge: Their billing and revenue management capabilities and systems are not keeping pace with the revolutionary and rapid changes occurring at the network and device levels which, in turn, has a significant impact on telcos’ financial performance. According to a recent Accenture survey2 of 100 leading telcos worldwide, ineffective billing capabilities caused global telcos to lose an average of 4 percent of revenue annually among enterprise customers and 9 percent

among consumers. Separate Accenture research found that operators, on average, lose at least 1 percent of their revenue because of outdated and incomplete revenue assurance capabilities. Increasingly, communications service providers are turning to Accenture to help them develop the next-generation billing capabilities needed to achieve high performance in the age of convergence. Accenture Communications Solutions that address next-generation billing and revenue management already are delivering measurable improvements in performance for providers throughout the world. These new capabilities are helping telcos to: • Increase revenues and profitability by offering and billing for attractive new product bundles with content/ broadband-based services, and offering the same services to all customers regardless of payment methods.

• Reduce revenue leakage by achieving real-time credit control and revenue management reporting and monitoring. • Rationalize legacy billing architectures to increase internal efficiency and reduce operating expenses by supporting all services on a single converged billing and revenue management solution, and sharing/ reusing billing capabilities across multiple affiliates and/or business segments. • Achieve faster time to market when launching new offers or tariff plans. • Support new business models (for instance, by supporting revenue control and sharing across the value chain).

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How Accenture can help Accenture helps telcos address their billing challenges by transforming their billing function to support the requirements of today’s converging world. We can do this in three key ways.

1. Developing and implementing a new billing system and processes to support convergent billing, billing for content and prepaid and postpaid billing. In developing new billing systems for our clients, we leverage the Accenture Next-Generation Billing Solution. This solution is built on leading assets, including a convergent billing architecture, to support high performance through coverage for a wide-range of billing capabilities, all supported by a common integration framework. The framework helps deliver rapid, modular integration of the various products necessary to create a robust solution in today’s varied communications environment. Capabilities supported by the Accenture Convergent Billing Solution are comprehensive across the spectrum of voice, data, content, wireless,

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wireline and interconnect billing. This end-to-end view provides the necessary level of solution integration, beginning with the business strategy phase, through vendor capability analysis, and on to delivery and support of the billing system. The solution enables telcos to accommodate real-time rating, billing for content, and prepaid and postpaid billing. See the sidebar on the opposite page on how one telco has benefited from Accenture’s billing system experience.

Case studies

Implementing a new billing system at a European mobile operator One telco that has benefited from Accenture’s billing system capabilities and experience is a European mobile phone operator. With the launch of its 3G mobile phone services, the company needed a new billing system that would support both prepaid and postpaid customers, as well as track and bill all types of usage on its network. Working with Accenture, the telco modified the global billing portion of a leading billing software package and put it into operation. Accenture was involved in the entire spectrum of systems development—from collecting requirements and defining feasibility, to designing the software, to building and testing the system, and finally to helping test the platform to confirm it met the company’s needs.

The billing system now supports nearly 9 million customers and has helped enable the carrier to take major strides toward high performance by: • Launching (and collecting revenue from) a number of important mobile phone video events. • Reducing bad debt and fraud, while increasing cash flow, through the system’s online rating function. • Reducing the high expense of credit collection. • Offering “tryouts” of services on a prepaid basis. • Reducing billing costs by generating invoices for different services with the same software.

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2. Creating a superior revenue assurance function. A major challenge for telcos today is verifying they are billing for and collecting all the revenue they are due. The Accenture Event-to-Cash Solution is an end-to-end approach to addressing revenue leakage that overcomes the shortcomings of traditional efforts and helps telcos take major strides toward high performance. On average, telcos that have adopted Accenture’s solution—which addresses both the business and technology sides of revenue assurance—have realized cost savings of between 2.5 percent and 3.5 percent in little more than three to four months for a comparatively minor investment. Accenture’s approach to revenue assurance spans four phases, each of which encompasses a set of activities that address specific revenue-

assurance challenges. In the Startup Phase, Accenture conducts a detailed assessment of a telco’s revenueassurance function and capabilities, as well as all areas of the company in which revenue leakage can occur. In the Definition Phase, we work with the telco to develop a set of target business results it would like to achieve, define new key performance indicators that will help the telco measure its progress toward reaching those targets, and design new revenue-assurance business processes that will enable the telco to more effectively identify and address sources of revenue leakage. In the third phase, Deployment, we implement the newly designed revenue-assurance business processes and design and roll out the relevant prepackaged technology solutions that support the new revenue-assurance organization and processes. The final phase, Tuning, involves refining and

Creating a new revenue assurance function at VimpelCom VimpelCom, a leading Russian mobile telco experiencing robust growth, hired Accenture to help develop the revenue assurance capabilities the company would need to identify and eliminate sources of revenue leakage. Accenture worked with the telco’s professionals to design and build VimpelCom’s first-ever revenue assurance function and implement both a set of effective quick-win solutions and a new cutting-edge switch-to-bill monitoring system. Together, the new function and system help managers quickly prevent, detect, analyze and fix revenue leakages all along the revenue stream. With its new capabilities, VimpelCom is better positioned to drive high performance. The company now can

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closely monitor the revenue chain from the point at which a new subscriber begins using the company’s network to the generation of accurate invoices for that usage. The new capabilities helped the company: • Achieve 99.8 percent reconciliation accuracy, despite processing more than 1 billion call data records (CDRs) in 26 different data formats per day. • Save several million dollars in just four months after the new revenue assurance capabilities, which is twice the cost of the solution itself. • Save more than three percent of the company’s total revenue annually and identify more than one percent of revenue losses to be controlled and minimized.

enhancing the revenue-assurance business processes and solutions for optimized performance, enabling the telco to support the ongoing review, detection and repair of future issues that could lead to revenue leakage and bottom-line degradation. See the sidebar below on how a leading Russian mobile telco experienced the value of Accenture’s revenue assurance capabilities.

3. Outsourcing billing operations and providing managed services. Numerous global telcos have opted to outsource their billing operations to Accenture. In such an arrangement, Accenture provides a solution that encompasses a telco’s entire billing capability: from strategy, business processes and technology to systems operations, human resources and economic structures. This typically involves the following: • Billing transformation, including the consolidation or replacement of outdated billing systems and processes and the migration and retirement of old legacy systems and processes while insuring business continuity. • Billing application development outsourcing to deliver new billing capabilities that improve a telco’s

time to market and helps the company launch new offerings and services more quickly and efficiently. • Billing maintenance outsourcing to reduce a telco’s billing systems maintenance cost and increase the service quality. • Billing infrastructure outsourcing to operate and maintain the billing platform's hardware, data centers and applications in a cost-effective manner. • Billing business processes outsourcing to operate a telco’s billing business processes as a managed service, including part or all of the company’s billing functions. See the sidebar below on how a new Italian operator capitalized on Accenture’s outsourcing and managed services capabilities.

Outsourcing and managed services at an Italian mobile operator The Poste Italiane group, which provides postal services and integrated communication, logistics and financial services and products throughout Italy, hired Accenture to help the company begin selling mobile phone services as a mobile virtual network operator under the name ”PosteMobile.” In its role of mobile virtual network enabler, Accenture built and maintained all the IT infrastructure needed to support PosteMobile’s core business processes. In addition to providing and maintaining the IT platform, Accenture was asked to provide operations and management services as well as business process outsourcing services that included service configuration and testing of the handsets and SIM cards (the "Subscriber Identity Module" cards that identify each unique mobile device).

Accenture completed the design and implementation of PosteMobile’s infrastructure in fewer than five months, during which Accenture built 102 interfaces and integrated 41 systems, including those from Poste Italiane and the company's selected network operator. Accenture helped enable 60,000 dealer users and 13,800 Poste Italiane Offices to sell mobile services. In the first month of operation as a startup company, PosteMobile attracted 100,000 subscribers and captured 7,000 activation orders per day at the peak of this growth. Within two months of the launch date, PosteMobile became the leading Italian mobile virtual network operator in terms of customer base and is well on the path to high performance in a highly competitive industry.

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Accenture is a leader in telco billing solutions

For leading telcos around the world, Accenture plays a key role in helping them address their most pressing billing challenges. We have nearly three decades of experience in billing processes, organization and systems implementation—covering completed billing projects for more than 200 telco clients around the globe—which gives Accenture unique insights and an independent point of view on how to transform billing operations to support the pursuit of high performance. In fact, Accenture has one of the largest installed bases of billing systems in the world: The billing solutions we have implemented or maintain currently support more than 220 million subscribers every month, while our revenue assurance work has helped these organizations recover more than $90 million in lost revenue.

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Our portfolio of billing and revenue assurance offerings covers the full breadth of billing operations, and includes proven software packages assembled within a robust integration framework. With more than 2,500 billing professionals, Accenture has one of the largest pools of highly skilled billing resources. Plus, the Accenture Global Delivery Network provides an efficient and cost-effective delivery model for our clients, helping them save significant deployment costs while reducing time to market. Furthermore, our longstanding relationships with billing and revenue assurance software vendors provide Accenture with deep knowledge of existing best-of-breed technologies and platforms as well as future development roadmaps. Leading industry analysts rank Accenture among the top professional services firms in the billing arena, and Accenture’s prominence is widely

acknowledged in the industry. According to Gartner, Accenture ranked first in data processing and hosted services and second in customer billing management and professional services based on 2006-2008 global market share based on revenue for those years.3 Forrester Research also named Accenture the leading Oracle billing implementer in 2008.4 In addition, Accenture has won its share of awards for its billing work. For instance, we received the Best Project award from Billing China for our work at China Telecom Zhejiang in 2007 with Comverse. The billing system we developed for Slovak Telecom also was recognized at the seventh annual World Billing Awards ceremony—which acknowledges excellence in billing solutions—and was the first-place winner at the 2008 CTIA Emerging Technology Awards.

On the journey to high performance

In an era when telcos are under increasing pressure to attract and retain customers while managing the change and complexity spawned by convergence, the billing function is more important than ever. Accenture’s proven track record, deep experience and extensive skills, and strong alliances with leading billing software vendors enable us to help telcos address their billing challenges—helping to reduce the risk to clients’ operations while delivering substantial business benefits. In short, Accenture is the trusted business provider telcos need to help transform their billing function into a true competitive differentiator that helps them achieve high performance.

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Notes 1 Gartner Dataquest, Market Share:

Telecom Operations Management Systems (BSS, OSS and SDP), Worldwide, 20062008, Martina Kurth, Kamlesh Bhatia and Norbert Scholz, May 2009 2 Achieving High Performance in

Telecommunications through Superior Billing, December 2008. 3 Gartner Dataquest, Market Share:

Telecom Operations Management Systems (BSS, OSS and SDP), Worldwide, 20062008, Martina Kurth, Kamlesh Bhatia and Norbert Scholz, May 2009. 4 “The ForresterTM Wave: Oracle

Implementation Providers, Q1 2008”.

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