Smart Revenue Sharing

Smart Revenue Sharing

Smart Revenue Sharing: The Solution to Service Providers’ Growing Pains

By Moshe Peterfreund, Director of Marketing, FTS
January 28, 2015

From one-to-many to many-to-many

It used to be that the service provider ecosystem was much simpler. Based on a one-to-many model, billing software ensured that the service provider’s customer was charged appropriately for the services they were provided via mobile, wireline or cable, or a mixture of all three. Today, the model is many-to-many: thanks to the growth in content, apps, the cloud, the Internet of Things, video, e-commerce and m-commerce, billing now needs to manage a complex web of partners and relationships.

Imagine a band dividing up royalty payments amongst six band members according to how much time each one has played on a record, or a group of kids dividing up a bag of sweets according to how many goals they each scored in a football game. Everyone needs to be ‘paid’ based on how much they brought to the relationship. The more parameters that are involved – such as partners, services provided and bandwidth consumed – the more complex those relationships become, and that’s where smart revenue sharing can help, at least in the billing world.

New revenue sharing models required

Today’s communications, content and payment service providers, whether growing or established, face the same set of challenges: to support innovative services and improve integration with all the partners in their ecosystem as they move towards being digital service providers. Revenue from legacy services is declining, new business models are flourishing, new higher-growth services areas require investment, and new services mean new competitors. As they seek to find solutions to these challenges, they must embrace new business models and new relationships with new partners, which are ever more interlinked and increasingly complex. And with new partners come fresh requirements for revenue sharing models.

Meeting the demands of the digital services era

As we move into the era of digital services, service providers must be able to offer new deals, services and pricing models to their end users, and dynamic and flexible contracts to their partners in order to quickly and easily to keep pace with fast-growing sectors. Whether it’s traditional telecoms billing, M2M, video and content services, payments or mobile money, each has its own business logic and its own way of doing business.

A critical requirement for the evolving service provider is being agile enough to deploy new marketing plans and launch new services at the speed of marketing thought for its end users, whilst simultaneously being able to onboard new partners into their ecosystem with personalized contracts that meet the requirements of each of the specific business models.

The differences in each of these service areas and their associated business logics and models are clear to see when looked at side-by-side:

Increased attractiveness

Whatever the industry, the requirements are the same: being able to process and implement end user changes as quickly as the marketing department creates them. Being able to smoothly launch new services turns a service provider’s back office into a real revenue generator. However, it’s no longer just about enabling relationships solely between the service provider and the end users. These relationships also need to be enabled between all the partners in the entire ecosystem with the onboarding of new partners with a dedicated contract which is also easy to modify.

On top of this, the relationships between each and every partner and user must be personalized as the new industries become increasingly sophisticated, irrespective of whether they are subscribers, OTT providers, content aggregators, mobile money and payment service providers, utilities or banks.

Enabling smart revenue sharing across all partners and users will increase your attractiveness to the entire ecosystem. And the benefits? Personalized contracts and relationships with each and every one of the partners in your ecosystem, increased attractiveness and improved business relationships with them; reduced total cost of ownership; a remarkably fast time-to-market and ultimately, increased revenues. It’s a win-win for everyone, however many there are.

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