Thanks to Rob McGregor who pointed out in his comment to yesterday's blog that mistakes do, indeed, get repeated because nobody seems to learn from them. He wrote:
"....one thing you forget to mention about the growth of the RA market and the losses that are predicted to grow is that companies do not learn from their mistakes. I have worked in Fraud Control and RA for some years and can honestly say that even with the same experienced staff moving from company to company, you still see the same fundamental mistakes being made over and over again. I believe it is down to laziness...."
Rob is right, but I think the problem goes deeper than just normal human laziness. People learn if they have an incentive. They do not learn if they do not. It may sound stupid, but are people in telcos paid to do their job properly? Or are they just paid to meet the current targets set for them? And is revenue assurance part of improving a business and learning from mistakes to prevent them in future? Or is it a cheap way to profit from mistakes that depends on them occurring over and over?
I am a big fan of the thinking of W.E. Deming and what he had to say about running businesses. He thought of how employees worked within the system. The failure of an employee to learn, to consider and prevent errors, to think beyond the simplest and quickest way of performing the task at hand, is not just the failure of that employee. It is a failure of the system that employs them. In the extreme, you could treat it as the failure of all management above that employee, all the way up to the CEO. Deming said that
"The aim of supervision should be to help people and machines and gadgets to do a better job."
But how often do you see supervision of this kind in a telco? The incentive to do better is usually lost because people are satisfied with just getting by, surviving the next crisis, and pausing for breath before the next crisis. Creative thinking about systems is often limited to working out how to do the same work with fewer people or resources. No reward or attention is given to those wanting to do a better job with a constant level of resources. Telcos should be rich and fertile territory for a systems-based management approach like that espoused by Deming. Telcos are complex: they link people and technology in long and interdependent chains of effort. Japanese businesses that learned from Deming start with what the customer wants and is prepared to pay, and then work how to deliver it. They only put it on sale when (and only when) they have worked how to deliver it. Contrast that with the thinking in most telcos - if not most of IT in general. They focus on what the customer is prepared to pay, assume that what the customer wants is the same as what the business can deliver, start selling it and sort out how to deliver it as they go along. And if it does not work, is flawed, has bugs etc - so what? Information and communications technology is supplied on the basis that the customer should think themselves lucky if it works correctly and that no harm is done if it does not. That thinking also extends to the technology used to charge for the products. Whilst building in quality is the mantra of a business like Toyota, and ends up part of its sales proposition, the public perception of telcos is that they do not care. Which is why a superficial rebranding exercise like turning ntlTelewest into Virgin is more likely to degrade the Virgin brand than engender increased public confidence in the underlying business.
Here is a question for everyone to consider. We all understand the distinction between the front office and the back office. The front office looks good. The back office looks shabby. Getting bills right, preventing fraud, that sort of thing, is all back office work. When we read about work in a telco, be it on a corporate intranet, or a company magazine, or what execs say, most of the attention and congratulation is placed on front office stuff. Back office stuff gets a lot less attention. Is that a fair summary of the culture of most, if not all, telcos? And if so, is it surprising that back office staff may take less pride in their work than the people in the front office?
Yesterday's blog did make a big and unjustified assumption that if a telco pays for external revenue assurance assistance once, it never needs it again. Although I admit that assumption is not valid, I cannot help but be very cynical about why the reported estimates of revenue leakage and benefits earned from revenue assurance have remained so constant over the last 5 years. Although products and systems do change, and this introduces new risks and leakages, the pace of change has not been rapid enough to introduce new errors at the same rate that they supposedly have been fixed. Put another way - if a vendor fixed all revenue leakages in a telco one year, delivering an extra 2% of revenues, not enough would have changed for them to go back the next year and earn another 2% for that same telco. Unless of course they did not actually fix anything. Instead, maybe they just shoveled up some of the dung, left, and waited for another big pile to build up. But why boast of a business model that makes a telco depend on external vendors to treat but not cure their sickness? Of course, the subtext to this is even more sinister. The best thing for revenue assurance vendors and consultants would be if telcos never get better, never prevent leakages before they occur, always keep running more back for more and more revenue assurance tools and advice to fix their problems. That is the reason why estimates of revenue leakages and benefits will be static year after year - for vendors to keep on making money they need the problem, and the solution, to stay the same size. Too big, and somebody senior in the telco may terminate their contract or take a closer look at what is really going on and force through a proper and permanent solution. Too small, and there is no incentive to get external help in the first place. And people working in the telcos often act as the agents of the external party - their job may also depend on the scale of problems and the speed of delivering solutions being just right. Like Goldilocks, both revenue assurance vendors and employees need their problems to be not too big, not too small, not too hard, and not too soft. I have blogged about the pressures to generate biased measures of revenue loss before, and it is one of my personal bugbears.
My favourite Deming quote is
"In God we trust... all others bring data."
It is that thinking which makes me so acerbic (and doubtless repetitive) in my criticism of the numbers that get reported alongside explanations of the need and benefits of revenue assurance. If any practice should have the skills and mindset to draw its conclusions solely from good and reliable data, it should be revenue assurance. Instead we see the worst kind of bias. This bias leads to a perpetual promise of riches. Every year the revenue assurance world continues an exercise in doublethink - lots of benefits have been earned from fixing previous problems and there are lots more problems still to be solved hence lots more cash to be earned. Even with subjective estimates, we should see some meaningful trends emerge over time. But we do not. There is something going wrong. If the problems were that big to begin with, then telcos have the economic incentive to fix them all without delay. But if the problems were not that big, then the promise of future benefits is being exaggerated.
As Deming pointed out, to learn, you first need to gather data. Before revenue assurance can teach companies how to improve, it first has to teach itself. The starting point for that learning process is real, objective, and unbiased data.
