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Internet of things: Getting the billing basics right

While the internet of things (IOT) offers huge opportunities for economic growth and job creation, IOT vendors must ensure they have a disciplined handle on costs.
Read time 5min 30sec

The fourth industrial revolution offers tremendous opportunities for economic growth, as well as significant challenges for a low-skill economy like South Africa.

In particular, the internet of things (IOT), the growing number of objects connected to the network, most frequently via SIM cards, offers a host of opportunities for entrepreneurs to devise products and services to improve current businesses or indeed create new ones.

Analysts predict that in the European market alone, spending on the IOT will reach $202 billion in 2021 and will continue to experience double-digit growth through 2025.

Long gone are the days when IT and telecommunications products and services existed in distinct environments. The infrastructure and co-dependency requirements for both environments have considerable overlaps and synergies. Treating the two areas separately not only dilutes purchasing power, but also significantly limits the true benefit and efficiency that an ICT strategy can and should deliver to the business.

Visibility into how ICT products and services are linked to a company, region, branch, cost centre, GL code and/or end-user within the enterprise, and what the associated landscape consists of from a commercial and provider perspective is really the tip of the iceberg in terms of what a sound technology expense management (TEM) platform can deliver. The analytical ability contained within these platforms is where the true value lies.

South Africa has been a strong adopter of IOT, with our security industry leading the pack − think vehicle telematics and intrusion alarms that connect back to control rooms. But other industries are fast latching onto IOT’s potential for improving their ability to monitor a whole range of things from equipment to people, and then take appropriate actions. The medical, financial services, insurance, agricultural and FMCG sectors, to name just a few, are all climbing on the bandwagon.

As an economy, we have the experience of the vehicle telematics industry to learn from, and aspirant IOT entrepreneurs should take these valuable lessons to heart. The key lesson is the absolute imperative to keep a close track on billing across a growing number of SIMs − remember, IOT is all about scale.

Without this capability, the aspirant IOT company risks ending up with unexpectedly large network charges that are not covered by client fees – all business leaders are clear on the fact that if you cannot predict cash flows accurately, failure is certain.

Automation is key to visibility

This ability to monitor what can become a huge empire of SIMs is vital for the IOT business using the GSM protocol, not only to keep a tight control of costs but also to ensure contractual obligations are kept both with clients and the network.

A company can quickly end up with thousands of SIM cards – especially in COVID times − from a range of network operators in a multitude of devices. The ability to track all this information is vital, and cannot be done manually across a multiplying number of SIMs.

Long gone are the days when IT and telecommunications products and services existed in distinct environments.

At the most fundamental level, the IOT company must have visibility of all its SIMs in a highly granular way, but in a centralised view. It is necessary not only to know what charges were incurred each month for each SIM, but also whether those charges are in line with the service offered to a specific client.

Added to this is the need to associate these costs and various data sets to financial metrics such as profitability and breakage.

From a customer’s point of view, detailed reporting that substantiates “out of bundle” billing is crucial. An example would be SIMs that incurred roaming charges that are typically received after the fact.

Another related consideration is whether the SIM is using the GSM network correctly. For example, the business case might be based on mobile data connectivity, but a SIM might be using voice, at much higher cost.

Another issue can be that a SIM somehow opts into a push service to receive, say, a new ringtone every day, at R7 a ringtone. The IOT company needs to be able to identify such anomalies.

From the network point of view, the IOT company needs to be able to monitor commercial compliance. Is each SIM being billed in line with the original package?

The ability to monitor provides control

It’s also important to be able to monitor that every SIM charge can be traced back to a client. For example, if a client terminates the service, is the SIM still racking up charges from the network operator?

Is the SIM being used for international roaming? For example, when a vehicle leaves the country, its SIM will incur hefty charges when transmitting back to the control room. Being able to shut down a SIM rapidly is critical.

It’s not easy to be able to achieve this level of visibility and control. It will require the integration of multiple data sets: the network’s billing, your own CRM system, and a stock-management system, to name a few, and it’s far too risky to leave this to internal home-grown applications owned by a single resource dependency (which is often the case).

Achieving such a capability will set the IOT business up for success. Not only will it be able to monitor its expenses, but it will also be able to ensure clients are billed back as appropriate. Equally important, it will be able to quickly establish the profitability of any given product, service, or client.

Crucially, this high level of visibility will also set the entrepreneur free to create new products and services at scale, secure in the knowledge that they can be properly costed and monitored.

So, yes, IOT represents a huge opportunity for entrepreneurs, but it’s vital to get the billing basics in place first.

In my final article in this series, I will examine the impact of COVID, remote working and how in this environment, TEM solutions are truly a business growth-enabler.

Neil Buckley

MD, Apex BI.

Buckley completed his studies in software support and PC engineering in 1999. He later went on to enhance his knowledge and skill through courses at the Harvard School of Business plus other institutions in the US. He has two decades of experience in an ICT career that has seen him appointed to senior management positions across various functional lines of business, including enterprise, SME, partner and retail channels. In 2007, he founded Apex BI. In the 12 years since inception, the company has attracted market share and has become a major player in the technology expense management sector. Apex BI is the only African company to be a member of the Enterprise Technology Management Association.

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