The Evolution of Billing

Modern day billing is rooted in the solutions established by telecom — Billing 1.0. These highly robust and sophisticated systems were built over many years at a huge cost, making them accessible to only very large enterprises. Billing 1.0 was valuable in establishing predictable revenue and continual contact with customers.

Before 1990, complex billing problems were almost exclusively a problem for Communications Service Providers (CSPs), utility company and financial services companies to solve. They were largely bespoke systems created to alleviate error-prone manual processes. They were built using mainframes and COBOL and surprisingly, these platforms, or subsets of them, are still utilized by in-house development team and by some leading billing vendors around the globe.

The second stage of billing system evolution came along in the mid-1990s. Systems were created to achieve product economies-of-scale. They took advantage of relational databases, COTS hardware and client-server architectures. Many leading billing providers still promote these systems, although they may have added web services and SOA compliance, they are still largely utilizing mid-1990s technology.

goTransverse was built to initiate a new the third and fourth evolutionary stage of billing. The third stage of revenue management evolution is largely being built around web-centric n-tier architectures. These systems use Internet technologies to reduce development time and costs leveraging advanced software architectures, virtualization and web-centric deployment schemes. There are very few rely vendors who rely solely on these technologies.

The fourth stage of this evolution, which is now underway, is largely an extension of the 3rd and has less to do with technology than it has to do with business models. The market is being driven by low margins, hyper-competition and cloud-based services. Service providers of all types, with mixed business models of subscriptions and usage, must compete with lower cost competitors and must look outside of the status quo to find compelling business models to sustain growth. This is the advent of the two-sided business model, where service providers of all types fight to monetize their customer relationships and avoid being relegated to a price war, is at hand. A cloud-based platform with flexible usage-based billing with insightful revenue and audit management is a necessary competitive tool.

goTransverse, and the TRACT® platform, was launched on the premise that the billing industry has not had a real refresh in the back office in 10+ years and that it was long overdue. We believe the primary reason Communication Service Providers (CSPs) lag behind Web titans like Google and Amazon in their technology architectures is largely due to the fact that they have relied on their billing vendors to provide their technology platforms and the billing vendors, because of their revenue models, make less money when their software becomes more agile. Change management is the name of their old-school game.

As SOA, web-services, virtualization and other cloud-centric technologies came into use, cloud-based billing has become a reality and is now the status quo. It is already revolutionizing the billing industry. Those that haven’t admitted as much have a vested interest in their current architectures and naturally won’t be quick to change course. As the billing world moves to on-demand solutions, it won’t be enough to just support subscription business models. Billing vendors will have to move beyond basic subscriptions to support:

  1. Real-time usage-based pricing plans

  2. Robust product/services catalog

  3. Revenue and audit management

  4. Analytics with forecasting capabilities

All to grow beyond the narrow world of subscriptions and support real-time insight into consumer behaviors and the promise that a world of connected devices (a.k.a Internet of Things) demands.

To learn more about our new subscription and usage-based billing platform, TRACT®, Contact or call us at 512-829-4000.

#advancedbusinesssystems #goTransverse #TRACT

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