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An essential capability required for usage-based billing models, also known as consumption-based or pay-per-use models, is being able to take data and derive business meaning from it, and present it to the billing system for the calculation of charges. This might sound like a straightforward task, but in reality it might not be so easy. It can be like picking needles out of haystacks. There might be multiple data sources to collect from, with data coming in massive volumes in different formats, some binary and difficult to read, and the different pieces of data may have complex dependencies between them.
Typical capabilities required include translating the data into a common format, enrichment, correlating or validating the data against other data sources, filtering out duplicates, detecting errors and reprocessing with corrections applied, and maybe even doing some fraud detection on the fly. And all this might need to happen in real-time.
This capability is called mediation and has originated from the telco industry where usage-based billing and the challenges that go with it have always been a key concern. With 5G coming, the need for mediation will be even more critical as networks become more complex, and also with the increasing need to collect data from applications via APIs, which could belong to partners, to ultimately support the new business models that are envisaged.
But it’s not only about telco. Usage-based models are growing rapidly in other industries. Think about the high tech industry with smart products, and devices with embedded software, and the various XaaS business models, the automotive industry with connected vehicles, travel and transportation or Mobility-as-a-Service with multiple parties collaborating to provide a door-to-door journey, the utilities industry with smart meters and electric vehicle charging stations, ports with terminal operating systems, and so on. Software is everywhere in all of these use cases, and the usage of software creates data, which is required for billing of new usage-based services. And so mediation becomes a critical component for all industries where new business models feature.
Given mediation's position in the middle between the software and service platforms on one side, and the billing and other customer facing systems on the other side, it is invisible and often forgotten about. At least until problems start to occur.
The benefits of having an agile and robust mediation solution are clear. Lower time to market helps you keep ahead of the competition. Accurate bills mean a positive customer experience. Reduced revenue leakage keeps top-line revenue and margins strong. Rather that waiting for the problems to start happening, it is better to plan for this critical component right from the start.
For more details on how SAP can help you in this area, please have a look at the solution brief for SAP Convergent Mediation by DigitalRoute, which is a component of the SAP Billing and Revenue Innovation Management solution: https://www.sap.com/documents/2020/07/243bac08-a57d-0010-87a3-c30de2ffd8ff.html.
This blog post is part of a blogs series:
#1 Optimize Your Business and Easily Manage One Million Bills a Month
#2 Start Small, Plan Big: How to Embrace Successfully the World of Subscriptions
#3 Transform your business for Revenue Growth amid Covid19 crisis
#4 Our First Virtual SAP BRIM Conference – Some Highlights
#5 – Are You Streaming Music or still Buying Records?
#6 – Optimize Your Business Now
#7 - Getting Started on the 5G Monetization Journey
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