eBilling Adoption: Pros and Cons for the Service Provider

The costs of providing online and telephone customer support are increasing, while the cost pressures on Service Providers mean that the number of staff working in this area are decreasing. Anything that helps end users ‘help themselves’ can deliver direct savings to the Service Provider. The case for eBilling has, however, suffered from over exposure, being promoted as something of a ‘cure all.’

For all the hype, eBilling does have undeniable strengths, particularly within one of the most competitive market sectors- telecoms. With the promise of a fast ROI, the decision should be an easy one. Particularly, if as an example, you consider the experience of one large multi-national service provider that exceeded 40% eBilling adoptions in less than 36 months – more than 20% paper turned off and 70% of consumers paying electronically.

A sweep of the internet around the subject of eBilling and Service Providers comes up with a real mixed bag, ranging from thinly disguised promotional material to reports of poor take-up. The most disturbing message is that of poor take-up. If it’s so good, why wait? We started by asking our customers what they believed were the concerns – valid or otherwise – that were inhibiting some Service Providers from adopting an eBilling strategy. Ranked in order of importance, they are as follows:

1. Increased transparency of charges will lose the Service Provider revenue. By delivering an eBilling and analytics solution, the Service Provider makes it easier for its customers to understand their spend, and potentially highlight areas where cost savings can be identified. These savings translate into a loss of revenue for the Service Provider. This has been a big issue for Service Providers and often cited as a reason not to deploy an eBilling and analytics service. In fact, it does not stand up to scrutiny. Most large organizations already invest time analyzing their spend, whether paper or electronic bills. By offering a solution that makes it easier and cheaper for customers to perform analysis, the Service Provider in fact gains credibility and loyalty.

2. No immediate cost savings. eBilling is perceived as additional overhead, with no immediate return. In fact, most Service Providers do make significant cost cuts, with some even selling the service as added value (see appendix case study). Others that have undertaken successful implementations have reported remarkable indirect returns. The secret is to make a full evaluation of peripheral and incremental savings – see our example guide to assessing ROI at the end of this report.

3. The cost and hassle of integration. Many Service Providers, particularly following convergence, are suffering from a plethora of legacy systems that frustrate the production of a consolidated bill. Integration can be a huge hurdle. It can also become an excuse for doing nothing – the “let’s wait until we have a common system before addressing eBilling” syndrome. In practice, companies have found that eBilling can become the quickest mechanism for integration, giving customers a single view across multiple invoicing systems.

4. The poor performance of DIY solutions. In-house developed eBilling systems have a mixed history. This is not a reflection on the concept of eBilling – more a comment on the practical issues involved with in-house development. Most internal IT departments are suffering overload from maintaining legacy systems. Having to cover the whole spectrum of IT development and maintenance, they often do not have the opportunity of meeting the whole range of issues and potential solutions associated with eBilling. Longer term, they suffer from people that have moved on to delivering the next project, resulting in skills becoming dispersed or even lost. Ongoing development and maintenance of the eBilling applications inevitably suffer.

5. The ‘too busy’ syndrome. With new services to provide and possibly, legacy systems to replace, IT departments can be excused for sidelining projects they believe do not create extra chargeable revenue. Projects end up at the bottom of the pile. What they often don’t recognize is the strong business case that can deliver quick bottom line savings and fast incremental revenue from eBilling. And it can be achieved without any impact to the corporate IT strategy. For many companies, the solution is outsourcing – whether employing a fully hosted solution or an outsourced managed solution on-site.

6. Poor adoption rates. This is the most frustrating rationale for doing nothing. A self-fulfilling prophesy based on long outdated information and a lack of knowledge of adoption rates. Our research has found that Service Providers adopting an eBilling strategy ranked ‘customer adoption rates’ as the most important issue they needed to address.

The truth is that eBilling and associated analysis is delivering significant benefits for Service Providers of all sizes, across both their consumer and business sectors. However, the two environments are very different. The consumer marketplace faces particular challenges, not least of which is the reluctance of some customers to adopt an online lifestyle. It has been the reluctance of the consumer sector that has clouded the industry’s perception of eBilling.
The business sector represents the more straightforward case – where it is faster to convert and easier to articulate customer benefits. For most Service Providers, the corporate space represents a significant part of their revenue, or it is an area of potential growth in a highly competitive market.