Billing and monetisation solutions are the lifeblood of channel companies, enabling resellers, MSPs and distributors to bring money into the business, as well as offering insights that can unlock new revenue streams.
These solutions have evolved alongside the development of the Channel, with new capabilities and considerations coming into view.
In recent years, technological innovation alongside mergers and acquisitions within the billing market itself have reshaped the solutions available to channel companies.
Ellie Allseybrook, business development director, Inform Billing, said, “The billing and monetisation landscape continues to change at a brisk pace, with some areas of great interest including the roll out of full fibre, creating opportunities for everyone in the Channel, including billing providers.
“M&A has largely been driving changes in the billing world in the past couple of years, however the market remains competitive. History shows that competition drives innovation as well as commercial competitiveness and this is true in the billing market, as with any other. Billing providers must provide additional meaningful value and a real point of differentiation.”
Kelvin Chaffer, CEO, Lifecycle Software, added, “Technological advancements, evolving customer demands, and increasing competition are undoubtedly changing how channel partners approach billing and monetisation. Subscription-based models, multi-tenancy and automation have emerged as significant trends in the billing and monetisation landscape over the last couple of years.
“The ability to charge in real time is a must. The main objective of all these systems is to provide a streamlined billing process and ensure accurate and recurrent revenue streams.”
The nature of many channel businesses has been changed as they evolve to remain competitive. Ant Molloy, CTO of Giacom, explained, “To make life easier for themselves, customers want fewer suppliers, preferring to work with one strategic partner that can provide solutions and ongoing support for their entire technology estate.
“To meet this demand, many communication providers [are] providing a broader and deeper portfolio of fully managed solutions, often including cloud and IT services, as-a-service with ongoing support and a predictable, recurring monthly fee.
“Communication providers depend on their billing software to be flexible, to grow and adapt with them, and to make it easy to monetise new products and services.”
This shift is seen as ringing in the age of MSPs by some stakeholders. Simon Adams, managing director, PRD Technologies, said, “One of the major changes to the Channel landscape over the last few years is the diversification of channel businesses. There has been a noticeable push by these businesses to seek out alternative or additional revenue streams.
“Look at the evolution of telecoms companies; many have transformed into MSPs, broadening out their services and by extension their customer base. And of course, with these additional services, comes the need for additional functionality when it comes to billing.
“These newer MSPs, for example, are selling on Microsoft subscriptions, which are all markedly different from traditional telecoms services. This adds an additional layer of complexity to the billing process.”
Adams also discussed the reality that “many channel businesses are forgoing the use of traditional billing platforms”. He explained, “Instead, they are opting for third-party software like Xero, Sage, and ConnectWise, and using the invoicing capabilities of these platforms. These invoicing systems can’t necessarily process usage data, so additional functionality is once again needed within the billing platform.”
Chip Mahan, global head, fintech, payments and banking, Sage, added, “To optimise operations and boost profits, channel companies such as resellers and MSPs have access to a range of invoicing and monetisation options. Traditional billing models and more complex subscription and consumption-based pricing schemes are some of these alternatives.
“Value-added services, usage-based billing, tiered pricing plans and other flexible billing alternatives are amongst the possibilities MSPs and resellers should take into consideration. These options can be customised to meet their unique business demands. Using billing solutions, sophisticated analytics and reporting features can also help spot upselling and cross-selling opportunities and offer insightful information about client behaviour.”
The AI era
Automation has dominated the billing market for the past five years. When asked what the next big trend will be, artificial intelligence (AI) was the phrase on everyone’s lips.
Adams, from PRD Technologies, said, “The obvious next trend – though it is being used already to some degree – is AI and its application in billing. Billing vendors, PRD Technologies included, will be focusing on how to implement AI across the entire billing process, end-to-end and realise its full potential.
“The role that AI can play, especially in data processing and analysis, forecasting and trend identification, and further streamlining billing will really come to the fore.”
Vladimir Mitrasinovic, regional vice president, EMEA, Amdocs, offered a similar view. He said, “Much like elsewhere in the technology sector, AI is the next big trend in billing. Automation and AI have been relevant in this space for decades, and while standard AI is still prevalent, GenAI is taking things to another level.
“GenAI-driven billing gives businesses access to data they’ve never had before and ensures the data being analysed is acutely accurate. It also means that past interactions can be analysed and businesses can proactively contact customers to improve their billing experience. [This] can be the difference between a customer staying put or moving to a different provider in an industry like telecoms.”
New commercial models
Call Detail Record (CDR) data has long been a vital ingredient in billing across the Channel. This is changing.
Chaffer, from Lifecycle Software, said, “There is a significant change in how CDR data is used, reflecting changes in communication habits. CDR data, despite having the word call on the acronym, covers various events, including SMS, calls, MMS, roaming and data usage. While there’s been a decrease in traditional calls and SMS, there’s been a notable increase in data consumption.”
Chaffer explained this indicates a change in how people communicate, with online platforms becoming more prevalent than traditional voice and text services.
He added, “Despite this shift, it’s crucial to recognise the ongoing importance of CDR data in understanding user behaviour and preferences. Although calls and SMS may be declining, other forms of communication and data usage provide new avenues for analysis and insight generation.”
Molloy, from Giacom, added, “We’re not seeing an actual decline in the number of CDRs our software processes, although their use has shifted to an extent. The data contained within CDRs is still essential for reconciliation, reporting, repackaging or re-bundling. But it is now less important for pricing as CPs are moving towards bundled service packages and subscription billing models.
“CPs will look at margin holistically to ensure an overall profit, but not worry about making a profit on every line item. This offers advantages both to them and their customers by creating reliable and repeatable monthly billing.”
For Liam Conroy, managing director, Crystal ASP, CDR might be less relevant, but accurate call records remain important. He said, “Metered minutes are decreasing in favour of free internet-based calls. CDR data is losing relevance, as will bundles that cover minutes and texts.
“However, accurate call records are still being created through UC and VoIP platforms and must be handled in much the same manner as analogue calls. The requirement to handle complex CDR data will still be required in billing platforms for years to come. In fact, we have some customers where voice is their only product – albeit in the form of cloud IP-PBX.”
New demands
When asked if there is new demand for any particular capabilities, Allseybrook, from Inform Billing, said, “Demand is increasing for capabilities to include extra features and services to expand the billing service providers value proposition. Self-service functionality, particularly relating to mobile services, has also evolved from a nice to have to an essential requirement for many.
“A key requirement continues to be integration. The expectation to seamlessly integrate systems is high, reducing duplication and manual entry. In response to this ever-increasing demand and as part of our ongoing development, we have significantly invested into our API set, enabling customers to build links between other systems or suppliers.”
Allseybrook explained the company has created integrations into Abzorb, Gamma Mobile, Giacom and Zest4 to give channel companies the flexibility they need, as well as providing a branding service to white label the billing portal with the reseller’s website.
Conroy, from Crystal ASP, said, “We are seeing demand for new capabilities such as IT and cloud integration and more complex mobile packages for business. Equally, we’re seeing an expectation from channel businesses to extract more value from their billing platforms.”
He shared his view that smaller resellers “don’t need all the bells and whistles” a larger ISP or carrier might need. However, they may find they are still paying for those functionalities due to a lack of flexibility within some billing platforms.
He said, “We have created a modular platform that ensures customers only have to pay for the functionality they need while having the option to embrace further capacities as their operations become more complex.”
Adams, from PRD Technologies, pointed to Microsoft’s New Commerce Experience (NCE) as one technological innovation that is leading to demand for new capabilities.
He said, “This programme offers great opportunities for MSPs and CSPs, but it also throws in some billing curveballs. Managing all those subscription renewals and invoices with different start dates and pro-rata can get complicated.
“That’s where new billing functionalities come in. MSPs and CSPs are looking for systems that can handle these complexities automatically. We’re talking features like automated subscription management that takes care of things like pro-rata calculations and cancellations.
“Flexibility is key too, so the system can adapt to different billing scenarios – think co-term billing for grouped subscriptions that might have different start dates. The bottom line is: channel programmes are evolving and billing systems need to keep pace.”
Molloy, from Giacom, said that channel companies “need billing solutions that can be flexible and enable them to adapt to a wide range of services, including new and emerging technologies”. Crucially, Molloy explained, the chosen billing solution “should not only ensure cost monitoring and profitability management, but also enhance the product offering and customer experience”.
What is important is the billing and monetisation solution supports channel companies in reaching or even exceeding their long-term goals.
Molloy concluded, “Beyond the features of the billing solution itself, providers also need to be confident in the supplier’s capability to support their growth, continuously develop their solution, and adapt agilely to new demands.”
This article appeared in our May 2024 print issue. You can read the magazine in full here.