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Headaches, Hassles and Hurdles

  • Telco Management Pain Points in the Enterprise
  • Billing World
  • 1/2004
  • Michelle L. Hankins

Contract negotiations for communications services can leave enterprises undone. With the blend of voice, data and wireless services, supporting enterprise customers is becoming much more difficult. Couple this with staff reductions within enterprises and service providers alike, and often business requirements can’t be supported.

Every business needs some level of telecommunications services, and for most, communications services are mission critical. Given these realities, contract negotiations can be a tedious and painful process.

Today, negotiations are about more than just a good price. Price is part of the equation, but the lowest bid does not guarantee the business of the enterprise customer. Solving some of the additional headaches and hassles that enterprises face can put a provider ahead of competitors for valuable business customers.

“Billing and payments are among the touchiest and most sensitive issues,” says Hank Levine of Levine, Blaszak, Block and Boothby. Levine negotiates interexchange, local and outsourcing contracts for voice and data services for some of the nation’s largest and most complex enterprises, including General Motors, Bank of America, Ford, DaimlerChrysler, Hyatt, Lockheed Martin, UPS and The Washington Post (see “To Each Enterprise, Its Own Dilemma”).

Levine says there are various hot buttons for enterprises that incite fury when negotiating their telecommunications contracts. The following is a snapshot of the 10 biggest complaints that enterprise customers have today.

1) Bill Accuracy

Perhaps the biggest hot-button issue for providers is misbilling. Most providers would welcome being able to place all a customers’ account information on one bill, but Levine says most enterprises would take accuracy over a consolidated bill any day.

Based on his experiences, Levine witnesses an average error rate that is much higher than it should be. “We assume an error rate of 10 percent, and we assume that they are in favor of the carrier,” he says.

“The customer relationship interface [the bill] … is really bad,” Levine states. “There is an enormous problem here.” The problem is such that trying to get a carrier to include an accurate bill as part of their contract is impossible, he says. Simply put, they cannot do it, so they will not promise it.

“It isn’t about the networks; the networks work,” Levine says. “The service is good, so why does everyone hate the carrier? … Billing is the underbelly of this. This is where the rubber meets the road.”

“Think about billing for a moment. This is the only area where you as a carrier touch the customer once a month, and it’s always wrong,” says Levine. This is why most enterprises become frustrated with their providers or disillusioned with the process, he adds.

While inaccurate bills take their toll, the enterprise customers are acutely aware of why these happen—extremely large, complex and old systems are just as big of a headache to providers as they are to their business customers. With the typical scenario at most providers including legacy billing systems and often multiple disparate product-specific systems, tying all that information into one bill can be close to impossible. So, when it comes to providers wanting to create one bill for customers, Levine suggests carriers take a step back: “An accurate bill is a first place to start.”

Tom Fabbricatore, US LEC’s CIO, agrees. To combat bill errors, he says that US LEC has implemented a first bill review during which the sales representative who sold the services to the customer reviews the first bill before it is ever sent out to ensure that it is correct. This is also done when there are significant adds, moves or changes to an account. “That can cut down on a lot of billing errors,” Fabbricatore says. “It’s better to catch it up front rather than clean up after it.”

To combat errors, Synchronoss, which has both provider and enterprise customers, acts as a court of repository for inventory information. Its product is used as an official source of data to verify that billing and inventory are correct versus what the provider sends. Peter Halis, Synchronoss’ executive vice president of sales, says that for one customer the cost savings from this process totaled 20 to 30 percent of the overall staff.

2) One Bill

One bill is the dream for most enterprise customers, but it is not the reality. Rick Findlay, director of wireless industry solutions at Convergys, says many business customers receive more than 1,000 bills per month.

For US LEC, which services medium-to-large business customers in the Southeast and Mid-Atlantic states, providing one bill is somewhat easier than it might be for larger providers that are lead-footed by legacy systems. All of US LEC’s products and services are channeled through one billing platform. While the provider bills through one system, the bill presentment is different for customers depending on their needs.

For its customers, US LEC is generally the sole provider of the business customers’ services, delivering about 90 to 95 percent of what is used.

In addition to bill presentment and searchability, the company also provides the raw billing data for customer downloads. This allows customers to load data into their accounting systems or to track usage. For example, if a customer has a lot of 800 numbers, they may want to monitor the detail records to measure the effectiveness of an advertising campaign. They may also want to see who called the 800 numbers to add them into their CRM system.

Many customers want their bill data for several months at a time to perform trending. This raw bill data can be pushed to the customer via email or can be downloaded by the customer from the Web. In addition, larger customers may prefer an FTP site.

3) The Customer Portal

Ask those in the telecom industry to gauge the importance of customer portals to support enterprise customers, and many will contend that these days they are the price of entry into servicing business accounts. “These are becoming table stakes to some of our customers,” says Bob Sloan, AT&T’s vice president of e-sales and services.

According to Elliot Dowling, a program manager at Cap Gemini Ernst & Young, key functionality within a portal is the ability to self manage without having to interface with a customer service representative or voice menus. Enterprise customers, he says, would appreciate automated provisioning. This could entail having a stock of inactive wireless handsets that enterprises can hand off to new employees and turn up service immediately without manual provider intervention. Not only does this benefit the customer, but it also saves the provider money in the end.

AT&T offers its Business Direct portal to customers. The portal is about 11/2 years old and evolved out of the company’s “Concept of One.” In the past, Sloan admits AT&T customers had to use multiple portals based on service silos. He says the company had upwards of 10 different portals that customers might have to visit to view their information related to various accounts. Each portal required a different login and authorization process, which was time-consuming and burdensome to the customer.

Sloan explains that AT&T brought the best of all of its portals together into one customer-facing format. Via the portal, customers have access to bill presentment and payment, analytics, and for some services, ordering and maintenance. The provider is currently looking to expand the billing functionality available via the portal as well as its ability to allow customers to remain online if they require further assistance.

As a control, employees within the business are granted different levels of access to various pieces of account information available on the portal. On average, Sloan says, large enterprises will have about 12 or more Business Direct users. The higher-end customers can use a map that graphically displays their network. For example, a customer can see their frame relay network and if there is a problematic connection, which would be delineated by a change in color on the map, the customer can click on that connection and go to the maintenance section of the system to initiate a trouble ticket.

Sloan says without a doubt the higher-end customers are adopting the portal more quickly than the smaller businesses. Today, Sloan says, more than a quarter of all orders from business customers are generated via the Web, and more than 500,000 users are registered on Business Direct. “We are seeing more and more of our customers asking for these types of capabilities versus us pushing this type of technology,” he says.

But Levine says when it comes to using customer portals “most customers aren’t that sophisticated.” He says portals are bells and whistles for many businesses and that advanced reporting and self-care capabilities are ancillary to a correct bill. “If the bills are not accurate, being able to generate six charts is not going to help,” Levine says.

As for Business Direct, Levine says the portal is good, but notes the billing records are only online for a short timeframe and are archived for only 3 to 4 months—after that, the records are dumped. In addition, he comments that AT&T is trying to charge customers to use this. Sloan states that there are some charges associated with the high-end customers, but that charging customers for use of the portals generally is not the direction in which AT&T is moving.

Synchronoss offers a portal that providers can use under their own brand. This gives the customer an aggregated view by bringing the information from disparate billing systems together in a common view. The company has been approached by one carrier seeking to tie in information from more than just a single provider.

US LEC also offers a portal for its customers at which customers can make account changes or adds, review their usage and perform some data network reporting. “We do expect that it will save us some money, but by far the bigger payback is the benefit to the customer,” says Jeff Blackey, senior vice president.

4) Price

When it comes to price, a common problem occurs when carriers and enterprises agree on the price and then that charge is actually higher on the bill. And when providers ratchet up the prices during negotiations, Levine says enterprises get mad.

PeopleSoft’s vice president of communication industry strategy, Daniel Kenyon, notes that pricing services today adds a layer of complexity in that enterprises are not only dealing with IT services, they are also dealing with the applications on top of the IT services. And many of these services are not based on a flat fee, but rather include measurement of usage and must account for peak and off-peak times. Rating today’s services alone is a feat that providers wrestle with on a daily basis.

In the past, enterprises were mainly negotiating for volume discounts. However, today they have more unique situations, according to Jane Braman, Convergys’ senior product manager for wireless applications. Companies today want to see much more trending information so they can better negotiate their next contracts. Braman says business customers are much savvier about price and the various types of discounts that can be infused in a contract.

5) Back Billing and Credits

Incorrect charges inherently add to other headaches when enterprises receive mistakes on their invoices. Sometimes getting those disputes resolved and having those charges credited back to the account is a tedious and lengthy process that is not without error itself.

The customer has a legal limit of 2 years for which it can demand compensation for billing errors, but according to Levine, carriers routinely try to get enterprise customers to sign a contract that stipulates they can only go back 3 to 6 months to 1 year to recoup wrongful charges. At the same time, carriers want to be able to back bill—or collect for their undercharges—for a year.

In addition, when a provider promises its enterprise customer a credit, it can sometimes take months before that credit appears on the bill. While the provider may demand interest from its customers to the tune of 1.5 percent on late payments, it does not pay interest on outstanding credits.

“Sometimes it can take up to 2 years to resolve a billing dispute,” Findlay admits.

“What angers customers is they have to struggle to get back to something reasonable,” Levine says.

6) Bill Cycle Time

Bill cycles are a huge headache for enterprises, especially when they span multiple cities, states or even nations. “Service providers have been trying to deal with that to cut it down,” Findlay says.

A geographic disparity causes issues with bill cycle time because bills are processed at different times because of their location. Carriers often put together a regional schedule of NXX codes for bill printing, Findlay explains. When a customer is spread across a county, trying to consolidate this is difficult. In addition, Convergys’ Braman also notes that having different bill cycles can add to the complexity of measuring usage to apply volume discounts. The questions are: When does a provider pull the data and at what time does it apply the discount? One solution, although somewhat difficult, would be to place the entire enterprise in the same bill cycle and run the information at the same time. Another solution would be to apply the volume discount to last month’s bill. “It’s definitely load balancing,” Braman says. Then, factor in issues such as how you measure the time of day to apply peak rate and what currency rates apply. “That’s always a moving target,” she says.

7) Bill Payment

For enterprise customers, the actual bill payment is a major bone of contention. Often, Levine notes, carriers want their business customers to pay 30 days after the bill date, not after the customer received the bill. And in many cases, the bill date is 15 days prior to when the customer receives the actual bill. Carriers want the money 30 days from bill date to try to improve their cash flow, but it is not fair to the customers to shorten their payment cycle. Levine contends it is abusive for carriers to ask this of their customers.

8) Service Disconnects

Apart from the fact that many orders do not get put in on time, sometimes a customer will ask to have a circuit unplugged and even after it is, the carrier still bills for it. Sometimes customers catch these errors, but their belief is that they should not have to catch errors and ask that they be fixed—if a customer asks for a disconnect, it should be done—plain and simple.

Often carriers will try to include timely disconnect orders as part of the contract; however, Levine believes these are an insult. As far as enterprise customers are concerned, Levine says “[The timely disconnect] should be there in the first place.”

9) Support and Maintenance

Another sore spot for business customers is the account team. Most contend that they can never get a good account representative from the provider and if they finally do, the good representative inevitably is taken off the account.

Just the maintenance alone for enterprise communications services often requires a lot of man hours from dedicated staff. One current Ace-Comm enterprise customer previously dealt with a mainframe system, and every time something on the invoice changed they had to go back to the original billing vendor to request a change, paying between $20,000 and $30,000 each time a change was required. In addition, the customer had to go back to the original vendor to generate reports, and they had to reverse engineer other interfaces just to obtain the data.

10) Security

Security is an increasingly important issue for enterprises, especially as businesses empower their “road warriors” with mobile technologies, but Levine believes the security functionality inherent in the technology (SSL, IPsec, etc.) will address the needs of businesses to keep a reign on their data. The main issue, he says, will be that security takes bandwidth and degrades performance, and enterprise customers are not particularly comfortable with that trade off.

On the Dotted Line

Deals for voice are becoming somewhat simpler, but Levine says “the technology and the deals are becoming much more complex than they were,” when you factor in all of the other services enterprises are employing today.

Having to hammer these issues out at the negotiating table is no small task. Retribution for billing errors, prompt fulfillment of orders, proper disconnects or a good account team should be a minimum standard of good customer service and not a product of the deal. “This stuff makes the customer’s blood boil,” Levine says.

He adds that while most large enterprises get anything they ask for when hashing out their contracts with providers, most smaller businesses, which typically spend $500,000 or less per year, just have to sign the contract and take whatever stipulations the provider inflicts upon them.