Scoping and Estimation of Billing Transformation Projects – the elephant in the room

Vijay Raghavan Kumar

Vijay Raghavan Kumar, Head of Delivery, North America, Synthesis Systems

Telecommunication companies and other Communication Service Providers (CSP) allocate hefty budgets for large, multi-year billing transformation projects, yet their average success rate is surprisingly low; less than 30% of billing transformation projects achieve the business objectives set during initial budget allocation, and more than 66% of the projects go overbudget (as per a study by McKinsey & Company).

With all the factors that influence the success of a transformation program—such as product fitment, technical personnel, requirements and scope clarity, governance, and so on—what is required for a successful transformation, and what course-correcting can be done if challenges arise?

The solution isn’t straightforward. The initial stage of the change process, which involves defining the scope and estimating the resources, is an excellent starting point. Drawing from my three decades of experience, I’ve discovered that precise scope definition and resource estimation are fundamental to establishing a successful transformation initiative. In this piece, I aim to discuss the crucial elements leading to improved scope definition and resource estimation, along with techniques you can adopt to enhance yours. As the proverb goes, “Well begun is half done,” so let us begin.

First things first—let’s cover some definitions. Scoping means “to clearly define the boundaries and limits of a particular task/activity or requirement,” Estimation refers to “the process of calculating time, cost and resources that are required to complete the particular task/activity or requirement.”

Scoping and Estimation

Scoping and estimation factors are categorized into three Ps – Famous Ps – People, Process, and Product; namely the process related to the business requirements of a particular CSP, the underlying software product/solution used to implement the cart-to-cash process,  and, of course, “we the people” who participate. Let’s further examine how these 3 key factors impact scoping and estimation.


Forming the Right Team

Knowledge and expertise of people performing the estimation significantly influence the scope and estimation to a significant extent. Their understanding of the billing product, business requirements, and the stakeholders defining the scope also play a crucial role. There is also an overlooked individual at the end of the floor who should be included in Scoping discussions. This person could potentially be the most knowledgeable asset in understanding functionality and business processes. To manage the ambiguity of requirements, to offset the inherent lack of knowledge of a particular product feature, and the lack of a better understanding of the effort required to finish a particular function, they buffer estimations.

The central theory for Scoping and Estimation hinges on human intelligence, knowledge, and experience, making it one of the most complex topics to discuss. Therefore, let’s investigate the key variables contributing to Scoping and Estimation for Quote to Cash projects. Hopefully, by the end of this discussion, we can pinpoint the elephant in the room. My narration primarily draws from my experiences, observations, and first-hand involvement in delivering and managing projects.


Value of AS-IS Study – An essential step before Quote to Cash/Billing transformation.

Performing an As-Is study of the current setup at the Enterprise/Company/Service Provider/Communication Service Provider (CSP) is very important. Defining the target roadmap and documenting existing business processes and deviations compared to standards must occur before launching a new proposal and RFP. This discovery process brings all the departments together to understand and decide the future state. It’s a critical step. It’s not just about documenting the RFP but also about the ideation process across teams/departments to start visualizing the process and kicking off the transformation journey. Many CSPs do this after the RFP award, which leads to the new SI/Implementation vendor performing a requirements discovery exercise. This often results in scope creep, project delays, and conflicts between the business and IT teams.


How much and How well to Scope – Writing the RFP

In scoping, the focus is not only on what to deliver but also on the extent of delivery. The thoroughness, accuracy, prioritization, and depth of scoping significantly impact estimation. Accurately capturing defined requirements in Request for Proposals (RFPs), Request for Information (RFI), and other documents also greatly influence estimation. Adopting a pragmatic approach when creating RFPs for billing transformation programs is crucial. This involves deciding on the existing features/requirements and those needed for the future while avoiding adding poorly defined and poorly prioritized requirements. This will prevent incorrect product fitment, excessive scoping, and overestimation.


RFP Response Reviews & Product Compliance– Checking it using Real Product Experts.

Similarly, product vendors must cover a compliance matrix process that confirms product capability, solution requirements, and tagging requirements needing customizations. Managing compliance has always made RFP responses more attractive in the RFP process, ensuring more product compliance and less customization. Within the CSP, there should be a process to verify the level of compliance using product experts for the shortlisted product vendors. Debating, reviewing, and normalizing the level of compliance and customizations should occur before closing the RFP process. This exercise’s outcome significantly impacts scoping and estimation. Better scoping and estimation lead to more accurate price discovery for transformation programs, which results in better budgeting and project execution.

I think test automation and framework-driven development must become criteria when selecting implementation partners and product vendors and must be part of compliance/selection scoring.

Method #1  to Improve Scoping & Estimation – Tips and Tricks to Reduce Effort Variance – Note to Implementation Vendors

Multiple steps can be taken by Implementation vendors to reduce Effort variance make it less people dependent and drive it as a process.

The steps are: –

1.) Automate specific tasks/activities – Installation of Billing product, configuring price plans, Unit test automation, System test, Build and deployment

2.) Identify common functions/Customizations – Writing a custom API, publishing notifications, defining new Chart of Accounts, Configuring Complex discounts and start creating an Estimation reference repository

3.) Creation of Reusable Assets/Framework – not just code but documentation, test cases, templates, checklist, go-live readiness plans, migration verification, Code review checklist to mention a few.

4.) Closed loop feedback of Estimation/Scoping – The most valuable inputs that can be provided on estimation and scoping is driven from Data collected from Projects that are delivered and a budget to Actual comparison is performed during Projects to understand variance and attribute variance to reasons increasing efforts versus what was budgeted.  The biggest hurdle to cross here is capturing accurate effort to deliver a particular function/feature.

Method #2 – Shift Left Scoping Approach – How can we apply it here to bring in a paradigm Shift?

The Shift Left principle involves performing a traditionally later task at earlier stages. Principally, Shift Left Scoping drives the detailed Scoping required for Quote to Cash/Billing transformation. CSP should undertake this even before asking for a proposal or launching an RFP. They achieve this by conducting an AS-IS study detailing the requirements that form part of the RFP/Proposal. This eliminates any ambiguity in terms of requirements/process or prioritization. Time invested at this early stage becomes time saved once the transformation project begins. It curbs any scope-based and time-based overruns, and time saved equals money saved. A clear set of requirements provided to Implementation vendors leads to more accurate price discovery and budgeting. This results in Dollar savings for both CSP and the implementation vendor.

In Summary

Implementation teams, Developers, Testers, and Architects should make improving Scoping and Estimation a journey and incorporate it into their Organizational goals to deliver reusable, repeatable projects and within the estimated budget and effort. This will directly lower the overall cost of ownership of the billing solution.

In addition to considering all of the above-discussed topics, it’s also crucial to continuously take the necessary steps to enhance the overall scoping and estimation process. Now, to address the elephant in the room, by now, you must have realized that there are more than one “elephants” to manage. The key message lies in managing all of them effectively.