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DST Is Back, More Humble

Billing supplier DST Innovis Inc. is re-emerging from a self-imposed quiet period, readying new billing, software and workflow-management systems for MSOs intent on delivering a complex set of service.

The re-emergence is part of DST's carefully crafted strategy to shore up its existing customer base and alter the perception that it's an inflexible company, executives said.

"The old CableData had a reputation for being arrogant," said senior vice president Brian Shepherd, who's been with the company 18 months. Over the past year and a half, part of his job has been to make the company "much easier to do business with."

DST supplies video and data billing services to Cable One Inc., Cablevision Systems Corp., half of Adelphia Communications Corp., DirecTV Inc. and 90% of the pre-AT&T Broadband merger Comcast systems, adding up to a 35% market share, according to company estimates.

Overall, it counts 40 million subscribers worldwide and 2002 sales of $2.38 billion. It produces 1.8 million statements per year.

Amazingly, Shepherd and his team saved most of the contracts that were up for renewal several years ago. The only loss was a small portion of Charter Communications Inc.'s business, he said.

Those renewals occurred over the past 18 months, but with little fanfare from DST. Now, the company is working with operators on a next-generation billing, work flow and customer-care platform that should be ready in 18 months or so, Shepherd said.

"We expanded the base beyond billing," said Shepherd of the $100 million research-and-development budget for the next-generation product.

A core feature is to integrate a new front-end DST workflow-management system for customer service representatives with traditional back-office billing structures. Eventually, it will add billing information-based operational database warehouses, which MSO marketing executives can use to improve their campaigns.

DST is building an enterprise application integration layer, into which operators can plug software modules specific to marketing issues.

For example, an MSO could use the new software to switch some billing statements to Spanish, or to create marketing campaigns targeted to Spanish speakers.

Older billing systems didn't have open application program interfaces and couldn't change fast enough based on an MSO's needs, Shepherd said.

A second key area DST is focusing on is revenue recovery.

One MSO estimates it can generate $30 million in revenue just by cleaning up promotion campaigns.

For instance, an operator may offer a $10 discount for three months for a new service. The promotion may end, but the order never gets entered into the billing system. Or a free trial offer ends, but that information is never placed in the billing system, giving customers perhaps months or even years more of free services.

Many of those mistakes happen today because links are hard-wired or processes conducted manually.

"CSRs forget what's valid and what's not," Shepherd said. DST's next-generation software seeks to automate those practices and thus "save" revenue.

The new software also allows MSOs to better mix-and-match promotions and bundled services.

"We can support the [Internet-protocol] triple play pre-next generation," Shepherd said, but the new software will make such integration much easier.

"You need flexibility to set up bundle codes and security codes to define who gets access," he said.

Software advances will also help address the "bolted-on" nature of today's billing systems. MSOs have anywhere from 20 to 170 edge systems tacked onto their legacy billing systems, Shepherd said. That's complex and costly for MSOs.

The new DST package will allow MSOs to simplify their billing setups, Shepherd said, eliminating the costs and complexity of years of Band-Aid-type fixes.

Shepherd hopes that DST's new work-with-the-MSOs approach, a proper dose of humility and moves to solve today's more complex billing issues can land the company new business. Certainly Comcast could be a target opportunity, especially since the MSO plans to launch voice-over-Internet protocol service in the next 18 months.