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Billing Conversions: Cornerstones of Success

The convergence of media and communication this century has created a new landscape for cable MSOs and other pay TV operators. What used to be a nicely apportioned industry with cable television, telephone and Internet access all running on separate channels has merged in to a highly competitive network of providers vying to be all things to all customers.

The result comes in the form of interwoven services and varied packages that give consumers a wide range of choices. As MSOs merge, relaunch services, play to both residential and commercial customers, and change the systems on which they run, a smooth billing conversion process is paramount to success.  With it, MSOs can soundlessly and seamlessly execute their customers’ billing cycles. Without it, there can be confusion, missed or inaccurate billing, late payments, cash-flow crunches and a clear impact to the bottom line.

Consumer reliance on the complex services of MSOs is as great as any utility service – a fact underscored by the Federal Communications Commission’s plan to regulate Internet service providers as a public utility. Such a move would only further the rampant shifts that have marked the industry for the past two decades.

Indeed, from 1995 to 2014, the Wall Street Journal counted almost 40 cable company mergers and acquisitions (not including the pending Comcast-Time Warner Cable mega-merger). Marketplace demands, competition, new technology and reconfigured providers put enormous pressure on the industry to continually adapt and respond. 

The cable industry is also dealing with a restless and disgruntled customer base. In a 2014 survey by the American Consumer Satisfaction Index (ACSI), Internet service and TV subscription were ranked near the bottom of the satisfaction index for all industries. From 2013 to 2014, every TV provider slipped between 3% and 7%. Fueling the unhappiness: high prices, poor reliability and declining customer service.           

Retooling for a Multiservice World

In short: Getting the billing system right is just as important as streaming the right service. Billing is the hub, or central nervous system, for everything from initial setup to service changes, repairs and, of course, monthly invoicing. In an industry where everything is non-standard, infrastructure can be outdated quickly and capital expenditures reached $68.7 billion from 2008 to 2012 (Bortz Media & Sports Group Inc., 2013), there is little room for error in upgrading existing technology or integrating billing systems following an acquisition. Customer retention, a reduction in churn and business success will hinge on overall customer satisfaction with services including:

  • Orders and changes to MSO services
  • Service availability by area
  • Provisioning and delivery of services
  • Field service communication and dispatch
  • Monthly billing and collection

Layered on top of these critical services is constant pressure to decrease time to market with new products and services, as well as implement periodic rate increases. Effective, efficient and flexible systems to manage all these interconnected activities are imperative if an MSO is to add new customers, retain existing ones and avoid reputational damage.

Three Keys to Bridging the Past and the Future

When it comes to billing, a smooth upgrade or integration plan is built around understanding the intricacies of the industry, tactical expertise, a defined change management process, and metrics for success.  A baseline knowledge of existing systems, company policies and procedures, customers, and the expected end result is the foundation for choosing the best path forward. 

Three key areas drive successful conversions:

  1. Embrace conversions as change management

For a successful billing conversion, companies must view the initiative from a change management: the goal is to alter the systems and behavior of the department, which cannot happen without a plan and structure.

Using a top-down, bottom-up approach, companies should focus as much on end users as on middle management, leadership, and executives within the organization in order to truly transform.

The right change management program will reduce risk that emerges from:

  • Confusion and frustration about what’s happening and why
  • Perception that operator opinion doesn’t matter
  • Fear about losing job or freedom
  • Eroded trust as employees lose faith in the organization’s leadership
  • Backlash against leaders / management
  • Opting out – not participating in decisions as needed

To succeed, strong and visible executive support is a must. Otherwise, the organization as a whole will not understand the critical nature of the process – and the impact it has on the company.

Executive sponsorship will help emphasize the importance of cross-functional collaboration, from customer care and field operations to marketing, finance, and IT.  A technology migration requires the technical, business, and project management talent that stretches across these disciplines; siloed efforts are doomed from the start.  Clearly defined roles and responsibilities that support an executive’s call to action will help foster communication and shared ownership of the project.

  1. Plan for Data Transformation and Migration

Having upper management involved also brings the process into the scope of an overarching change management process, instead of an “isolated systems issue.”  Case study after case study shows that the best laid plans are often derailed without a strong change management approach that ensures the impact of new systems are understood, documented, and implemented consistently. 

In addition to proper planning from the outset, the following areas should be considered:

  • Requirements
  • Business Process and Future State
  • Data Mapping
  • Training – Process and Operations
  • Audit and testing

A solid configuration management program during billing conversion can significantly reduce issues and related rework during the testing and go-live parts of the project.

  1. Deploy the Right Experience Set

External consultants have the advantage of teams that boast immense collective experience, with a primary focus on systems and change management.  The ability to weave a client’s custom requirements together with off-the-shelf technologies demands an outside perspective that has “been there and done that” with different systems and MSOs of different shapes and sizes.

While a billing vendor may know its products inside out, will those products work with other MSO applications and result in a successful conversion?  Will the MSO’s internal staff know the strengths and weaknesses of a vendor’s products for the MSO’s custom requirements, ask the right questions of the vendor, and know how to make modifications to interface with existing systems?

At the outset, a business process analysis will identify issues and fixes, and save time and money during the implementation phase.  Fully engaged resources, either dedicated or part-time, need to develop project plans, business and technical change management blueprints, and user acceptance testing.  Additionally, go-live acceptance criterion and a smooth hand-off to internal users must be established. 

Start With the Right Questions

Consolidation over the past few decades has left the cable industry with a greatly reduced set of competitors, but the fight to retain or attract customers is as intense as ever. As the central nervous system (billing and customer service) for the MSO, billing needs to be upgraded or integrated to handle merger implications, new services, and emerging technologies.  

A conversion plan, design, implementation, testing, and built-in flexibility can make or break customer satisfaction for a MSO.  How fast a company’s billing platform and infrastructure can adapt to new technologies, added services, competitive threats, and government regulations will be crucial.

Key decisions about how to proceed will be based on how the optimum billing application can be built and maintained to meet marketplace needs now and in the future. Since in-house talent is generally focused on its existing billing environment, it leaves executives wondering: will there be enough resources and expertise to assess new technologies, make sure they fit with other MSO applications, and provide the rigorous testing for a smooth go-live implementation? 

Or is a consultant with the experience from working with many MSO billing conversion projects and multiple vendors better suited to complement an internal team?  Does it make sense to combine the best institutional knowledge with outside industry and billing expertise?  It does if time to market, cost predictability, early problem identification and resolution (and the fewest surprises) surface when the switch is flipped.

Maggie Bellville is vice president of sales at Hitachi Consulting, a global provider of business and IT strategies and solutions owned by Hitachi Ltd.