This Industry Viewpoint was authored by Boominathan Shanmugam of Prodapt
Service providers in the Connectedness industry receive intercarrier invoices worth over USD 1.2 billion annually and are challenged with more than 25% revenue blockage due to disputes. Managing disputes and improving trust in intercarrier settlements is challenging for service providers. The traditional dispute analysis and resolution approaches are inefficient, delaying settlements for several months, and several problems, such as:
- Complex and time-consuming settlement processes due to siloed teams, and reconciliation processes
- Security risks and increased OpEx due to dependencies on intermediaries for settlements
- Prolonged and expensive validation and verification of claims due to third-party intervention
The aforementioned challenges increase the cost of managing and resolving disputes. Hence service providers must shift to a smarter dispute management process to address revenue blockages.
This article elaborates on how service providers can leverage blockchain to automate dispute management and reduce settlement time by 60%.
Fig: Leverage blockchain-powered dispute management to reduce the settlement time by 60%
The four-step approach to implementing blockchain in dispute management
- Build a private blockchain network between service providers
Service providers are challenged with fragmented processes that delay settlements and block receivables. Hence developing a private blockchain network helps accelerate settlements by improving the transparency and traceability of transactions shared across the network. Service providers with an existing blockchain network can check if they are at the latest release and upgrade the network to gain maximum benefits.
Recommendations
- Implement Hyperledger Fabric (HLF) network, which supports identity management and provides enhanced security for dispute settlements
- Leverage the greenfield approach to fetch the assets from 1.x network and push them into 2.x network effectively, using an API layer
- Leverage the external chaincode launcher to scale the chaincode at an optimized cost
- Develop a separate logic to migrate the transaction history to the upgraded network
- Automate the bulk upload of assets to the blockchain network
In the intercarrier settlement process, service providers need to process 100s of invoices per cycle. Manual processing of these invoices in batches is cumbersome. Hence, service providers should automate the bulk upload of assets like claims and paybacks to reduce the settlement time.
Fig. Automation of bulk upload of claims to the Hyperledger Fabric Network
Recommendations
- Leverage tools like Spring Boot to schedule and automate the bulk upload of assets to the Hyperledger Fabric network
- Implement smart contracts to validate claims before uploading them to the Hyperledger
- Store the current claims state in CouchDB as it is compatible with Hyperledger and supports data-rich queries. It also provides a user interface and enables quick retrieval of assets
- Leverage Distributed applications (Dapps) to display failed claims and the error code. This helps the business team to correct failed claims and re-upload them in the database for further processing
- Develop smart contracts for the automatic verification of assets
In the traditional approach, service providers depend highly on third parties to validate and verify assets like claims and paybacks. This increases security risks and operational costs. Hence, service providers should build smart contracts to handle various business logic agreed upon by the network members. It provides a single source of truth and establishes digital trust in partnerships. Further, service providers can carry out transactions without an intermediary, eliminating the fees owed to them.
Recommendations
- Leverage the “Go” programming language to develop smart contracts as it is compatible with Hyperledger and the underlying libraries
- Perform basic and advanced validations like data mismatch, the validity of the claim, claim date range, and status acknowledgments
- Integrate the Hyperledger Fabric network with utilities like Hyperledger explorer and Caliper to visualize and analyze the performance of smart contracts
- Implement the blockchain utility modules to accelerate settlements
Service providers should implement blockchain utility modules to gain end-to-end visibility of all the assets. It offers unique graphs to track all assets on a single page and understand the claim status and SLA breaches. Further, it helps to focus and accelerate the blocked claims, thus improving the settlement process.
In Conclusion
As explained in this article, the four-step approach assists the service providers in implementing blockchain-powered dispute management and reducing the dependency on intermediaries, with a simple, near real-time, error-free reconciliation and settlement process. It also helps achieve the following benefits:
- Reduce the settlement time by 60%
- Reduce the outstanding balances and Late Payment Charges (LPCs) by 25%
- Achieve 95%+ SLA targets with an improved settlement process
- Reduce the current average claim age by 30%
I appreciate the efforts of my colleague Priyankaa A- Analyst, Strategic Insights, for her contribution and continuous support in shaping this article.
Boominathan is a hands-on technology leader with 15+ years of consulting experience. He has immense practical knowledge of architecting NextGen products and effectively implementing solutions using AI/ML, Cloud, Edge, and Blockchain. He has successfully defined and delivered digital transformation programs, partnering with C-level leadership for globally leading telcos/digital service providers.
Boominathan is a digital transformation leader at Prodapt, the leading consulting, technology, and managed services provider to the Connectedness vertical. Prodapt’s customers range from telecom operators, digital/multi-service providers (D/MSPs), technology and digital platform companies in the business of connectedness. Prodapt works with global leaders including AT&T, Verizon, Lumen, Adtran, Vodafone, Liberty Global, Rogers, Deutsche Telekom, Google, Amazon, and Microsoft among many others.
If you haven’t already, please take our Reader Survey! Just 3 questions to help us better understand who is reading Telecom Ramblings so we can serve you better!
Categories: Blockchain · Industry Viewpoint