< 2004 News Listings Avolent Aims to Simplify Back-Office and Billing Integration Martin Schneider The 451 March 30, 2004 Catering to the healthcare, financial services, retail, telecom and distribution sectors, online billing provider Avolent is looking to solve a key problem: since M&A activity is high among market leaders in these sectors, companies typically wind up with several disparate billing, ERP and CRM systems. In its latest product release, BizCast 5.4, Avolent is offering pre-built adapters for more than 20 systems, making it easier for companies with several ERP and billing systems to pull customer data from a variety of sources and present it all to the customer in one search-enabled browser-based interface. This obviates the need for companies to migrate customer data into one repository. Impact assessment The message Avolent's latest release, BizCast 5.4, allows customers to present an integrated interface to various legacy billing, ERP and CRM systems. Rather than supplanting existing systems, it says, its preconfigured adapters can link disparate systems to the single interface right out of the box. Competitive landscape There are several vendors offering online billing tools, such as edocs and Amdocs, as well as hosted players like Velosant and Bottomline Technologies. Few make the lofty claim they offer an integrated billing system that can draw from disparate sources right out of the box. The451 assessment Avolent has the right idea in identifying a serious pain point for companies engaged in heavy M&A activity. The decision to either integrate systems or migrate to one single ERP system is a big one. While Avolent will not solve the integration headaches of having several back-office systems, if its pre-built adapters can pull billing data from across the enterprise, it may see even greater activity in the insurance and financial sectors. In these areas, billing issues are at the heart of customer service, and a one-time investment to automate billing may be considered worthwhile. Context Avolent got its start offering simple online bill payment capabilities in 1996, operating under the name Just in Time Solutions. It wasn't until 2000 that it got more into interactive billing functions and changed its name. Since then, the company has been making strides toward linking CRM and billing, offering a Web-based, customer-facing billing suite that includes payment, reconciliation and self-help functions, automating billing, payment and reconciliation for companies with complex billing procedures. With high levels of M&A activity among larger insurance providers and financial services firms, Avolent saw that the typical result of transactions was that the combined company attempted to offer online customer billing and self-help, but had its customer data in several silo-like warehouses. What Avolent's BizCast 5.4 attempts to do is allow a large company that is using SAP, PeopleSoft and Oracle at the same to offer an online billing interface that draws data from various sources, without a prolonged and costly integration project. Products Essentially the only addition in the latest BizCast version is its adapter library. In order for companies to offer a robust billing interface, the BizCast product needs to be able to pull all purchase and order data for a customer, which may be stored in several different data warehouses and CRM and billing systems. Since larger companies with several divisions may be running dozens of systems, the integration needed for this type of customer-facing application can be complex and time-consuming which is why Avolent has packaged more than 20 pre-built adapters in BizCast for pulling data from a variety of ERP and other systems, including SAP and Oracle. Previously these adapters were built for customers on a more expensive case-by-case basis. The benefit here, in Avolent's eyes, is that data can be conveyed to customers in a unified manner while the underlying systems remain intact. Instead of performing a huge integration project to port all data into one overarching system, the pre-built adapters pull data into the BizCast interface when a customer makes a billing inquiry. Even if Avolent's technology works out of the box, it seems unlikely that large companies running several legacy systems as a result of acquisitions will simply throw an application on top of its data mess. Most likely, these companies will implement some form of integration initiative, and if Avolent is lucky it can sell its product as a stopgap measure for presenting integrated billing functions while integration efforts continue behind the scenes. Even if the cost is $1m for the software, that is only a fraction of the integration costs facing the larger insurance and financial services firms. Financial As a private company, Avolent is not forthcoming with its revenue numbers. However, it says its sales grew 40% in 2003 and expects them to grow 100% this year. The company has completed six rounds of funding totaling more than $100m, backed primarily by Columbia Capital, RHO Capital and Bear Stearns' VC arm Constellation Capital. The total customer count is about 120, and Avolent says it is determined to speed up its customer acquisition rate, which presently averages two per quarter. The average deal size is $0.75-1m, and the company is banking on enterprises' reluctance to get involved in large-scale integration projects as a way to get its foot in the door of new customers. Avolent is still looking for funding, however, which may indicate that its revenue, while growing, is nowhere near its costs. Or it may mean that Avolent's investment in its preconfigured adapters was substantial. Either way, Avolent needs to increase its customer base significantly if it is to remain a contender in the online billing space as well as establish itself as a next-generation product vendor. Competition Avolent is just beginning to gain traction in the telecommunications space, where it sees Amdocs as a primary competitor. Amdocs is also presenting a billing system that is more CRM that simple online billing, very similar to Avolent's intended focus. In the majority of its deals, edocs is a major competitor, as are vendors like Velosant and Bottomline Technologies, which offer their billing tools as hosted services. The real competition for Avolent is not necessarily other vendors, but in-house legacy billing systems. In order to gain new business, Avolent must convince enterprises using simple paper-based billing systems that they either need to upgrade their systems or convince companies looking to upgrade existing systems to go with a package application and not to build it in-house. SWOT analysis Strengths Avolent has an ace up its sleeve in offering an extensive set of adapters that pull billing data from several back-office systems without extensive integration projects. Weaknesses The adapters do nothing to solve a company's larger and more pressing integration issues. Opportunities Avolent may be able to sell its product as a stopgap measure to insurance and financial services firms that are currently undertaking large-scale integration projects and need an application that can offer integrated billing functions today. Threats Other vendors in the billing space, such as Amdocs, are beginning to make their offerings more robust as well.
	Copyright ©2007 Rho Capital Partners, Inc.