Poor billing loses Telstra millions

By RICHARD PAMATATAU

TelstraClear has lost millions of dollars through inaccurate billing systems and is working to introduce replacements before launching its new residential services, says chief financial officer Michael Boggs.

Boggs would not confirm the actual amount but said the loss occurred because customers had not been billed for services received. The company has been working with IBM to pinpoint problem areas and is confident it will solve the problem before launching its residential services, scheduled for later this year.

Boggs said the project began in September 2003 when the company recognised it needed better systems and processes.

Last year TelstraClear recorded a profit of almost $3 million on revenue of $692 million.

TelstraClear needed to make sure its foundation for growth from a billing and process management perspective was strong and headed in the right direction with the new products and services, said Boggs.

This was not so much a hardware and software review but a searching look at company operations - everything from creating products, taking orders and then billing them.

Boggs said that meant some work would be required with new systems over time.

The company is poised to launch its residential services and this means more opportunity for revenue to leak - a problem many telecommunications companies face as customers become more demanding and look for customised service.

With competition slowly increasing the company has to make sure it can meet customer expectations quickly.

Boggs said the core revenue assurance project had spawned four projects. To prevent revenue leakage controls must be in place at each critical control point along the revenue value chain.

The four areas are "product life cycle", "sales management processes", "order to first bill" and "first bill to collection".

The "project life cycle" project has examined how TelstraClear gets its products to market from the first brainwave, through the meeting and design process to launch.

Boggs said many elements had to be considered - from basic things such as whether or not there is the infrastructure to offer it, to other things such as how it will be sold and even retired at some stage.

TelstraClear offers about 200 new products a year ranging from price changes on existing services to new data or internet products.

The processes around each product were essentially the same but needed to be tightened, said Boggs.

"Sales management processes" manages prospective and existing customers and also now contains another system called "opportunity management".

Boggs said the company needed to centralise this aspect of its customer management process.

The way TelstraClear interacts with customers once a decision is made to buy from it is covered now by "order to first bill".

Boggs said this project would see everything from the way orders were processed to how each product being bought was billed accurately.

New systems are being developed in-house to achieve this and the company recently boosted staff numbers in this area to around 150.

The final project, "first bill to collection", tracks the customers' relationship to TelstraClear in terms of money. Boggs said this area was working well. Most customers still paid by cheque, he said, with only around 25 per cent paying online.