The TMF recently asked me to write an article about revenue assurance in Latin America. To write it, I spoke with a quite a few RA people working in the region. If the you disagree with the content you should blame them, but if you like it you can thank me. The article will be translated into Spanish and mailed to TMF members. For those of you who do not read Spanish, or are not members of the TMF, I have included the English version below. Enjoy! (and do not tell the TMF you read it here first...)

Revenue assurance, the practice of detecting and preventing avoidable financial leaks from business operations, has entered the telecoms mainstream. In a few years it has changed from being a little-known niche into a permanent feature in almost every telco. Is revenue assurance the same all over the world? Yes and no. Technology works much the same everywhere, and people do not differ greatly. So you can find similar causes of leakage on every continent. What differs are markets, governments, products, and attitudes. These create different challenges and priorities in each part of the world. Latin America, where each country is at a different stage of liberalization and many show signs of “leapfrogging” to mobile telephony, poses some special challenges for the revenue assurance executive. At the same time, it has become one of the most dynamic regions in adopting revenue assurance best practice. Dr. Gadi Solotorevsky, leader of the TM Forum’s Revenue Assurance team and Chief Scientist at cVidya, a revenue assurance software and consulting business that supplies several Latin American telcos, commented:

“We find Latin America, even in strong and well-established revenue assurance departments, to be very open to new ideas. Until recently there was limited knowledge of the revenue assurance guidance published by the TM Forum, but now there is a lot of interest in the team’s work. I have spoken with quite a few Latin American operators, some customers of cVidya, some not, and all of them want to learn more.”

The typical Latin American tier one or tier two operator now has a dedicated revenue assurance function. Some of the issues they deal with are more practical or physical than those faced by European or North American revenue assurance practitioners. The difficulties of collecting cash from payphones, managing the impact of power outages and implementing adequate physical security over copper wire are just some of the problems that often fall within the broad remit of revenue assurance in Latin America. However, the risks that need to be managed expand as markets grow. According to the International Telecommunications Union, Latin American mobile subscriptions are now roughly double the number for fixed lines. Such rapid growth in the market poses problems for the wireless service provider, which has to counter fraud, maintain control over prepaid top-ups and ensure everyone accessing their radio network is associated with a bill or prepay account. At the same time, they need to try to ensure systems and processes are scalable and efficient to keep pace with demand. Fixed-line traffic has also grown, driven by strong economies and off-shoring of services. Customer numbers are rising overall. Coupled with the introduction of new products, this has forced telcos to change their systems to cope. When systems are changed, resources need to be allocated to manage the migration of data and avoid the introduction of any errors. Many find at this point that they are confronted with the extra task of cleansing old and corrupt data that had been maintained in their legacy systems. This all contributes to a greatly heightened risk of costly errors going unnoticed.

Fidel Aponte, Regional Revenue Assurance Manager for the Americas & Caribbean in Cable & Wireless, summed up the biggest challenge for revenue assurance: “change is constant”. He explained how revenue assurance in the region is evolving to keep pace with change.

“In the past, revenue assurance was not part of the business culture. By demonstrating the benefits to the business, and by helping meet the goal of rapidly bringing new products to market whilst assuring they are accurately rated and billed, we have changed that perception. We used to be seen as a kind of road block, creating delays. Now we are seen as people who add value.”

Fidel and his peers have gradually shifted the understanding of the role of revenue assurance in Latin America. The increasing pace of change puts the burden on revenue assurance to work well with the rest of the business. This means two things. First, revenue assurance needs to work hard to communicate its purpose and integrate with other activities. Second, revenue assurance needs to encourage a modification of the business culture, where implementing controls to prevent leakage is treated as an objective to be realized as change takes place, not as an obstacle. Whilst Fidel has seen great improvements in how revenue assurance is regarded, he recognized that the hard work is far from over: “we need to continue to evolve in order to keep up to speed.”

Increased competition has made revenue assurance more difficult in many Latin American countries. Competition encourages a more rapid change of prices, the making of special offers and promotions, and sometimes leads to more complicated tariff schemes. If changes in prices are not tightly controlled, from the maintenance of reference data right through to the publication of marketing materials, it can lead to costly or embarrassing miscalculations. As customer expectations rise, it can be hard to ensure that billing integrity and presentation keeps pace. Whilst billing integrity is rarely a factor in prompting customers to first switch providers, it can be a major reason for why customers switch back to their original provider. In some ways, the reputation damage caused by over billing can be worse, and is certainly harder to measure, than the losses suffered from under billing.

Growth in the retail market has had the knock-on impact of increasing the revenue assurance burden on wholesale traffic carriers, whether domestic or international. As markets get liberalized, telcos find themselves needing better systems and processes to manage billing and settlement with an increasing number of other providers. They are simultaneously under regulatory pressure to open up and connect networks in the shortest time possible. Telcos setting up a new operation have the difficulty of trying to ensure that all their new systems work correctly and that they can keep a track on what they owe their partners. Established carriers need to be able to manage more partners using their network. Many of them will have no previous credit history so care is needed in managing the relationship. Failings in a partner’s systems may make reconciliation and agreement of balances more difficult, so it is vital that the carrier has complete confidence in their own numbers. In addition to managing debt and payments with other telcos, more attention must be spent on preventing mistakes. A flaw in the management of number ranges or of inter-carrier prices, if identified and exploited by a rival business, can very quickly result in large losses. That means extra attention must be paid when businesses upgrade their interconnect and wholesale billing systems, often as a direct consequence of market liberalization. Unlike in Europe, where new revenue assurance departments often spent several years focusing on retail and corporate products before broadening their scope, Latin American providers have had to take a more balanced approach. All revenue streams need to be included in the scope of the Revenue Assurance department from the outset.

One topic that cannot be generalized is the influence of laws and regulations in each country. However, it is key that each Latin American telco defines its own revenue assurance strategy with their national obligations in mind. Whilst learning from the experiences of others is a good way to drive improvement, it is a mistake to simplistically follow a generic strategy written by an international consultant with no local knowledge. Priorities and policies need to be aligned to the needs of each specific country. In the worst cases, following a generic model can lead to the purchase or development of inappropriate revenue assurance tools and systems. Dr. Solotorevsky explained:

“Regulation and law varies significantly between Latin American countries. In countries where providers cannot issue back bills, revenue assurance needs to be more proactive and prevent leaks before they occur. In countries where it is hard to terminate a customer’s service, more emphasis must be placed on the integrity and quality of data used in customer acquisition.”

The more things change, the more they stay the same. Liberalization and increasing penetration are driving the Latin American market forward, and adding to the burdens of revenue assurance. Meanwhile, revenue assurance managers are learning from and sharing information with colleagues in other parts of the world. The knowledge they gain is reapplied to create a model for revenue assurance tailored to their particular needs. They are not waiting for mistakes to happen, but are leading the way in explaining the financial consequences of allowing leakages due to operational weaknesses. The Latin American revenue assurance experience is to learn from the past mistakes of others, to better prepare for future challenges.

Posted by Eric on August 28, 2007 11:55 AM | Permalink | Comments (0) | TrackBacks (0)

There is a bundle that most mobile operators offer but that rarely gets described as a bundle. The bundle is the combination of a service with a handset. The extent to which the handset is subsidized corresponds to the extent of the commitment the customer makes to pay for a service. Bundling is hardly a new business concept and it features widely in the media and telecoms sector. Bundling can also generate some fascinating blind spots for busy-body regulators. Whilst the EU feels compelled to stop the cost of local and national wireless calls being subsidized by roaming, they are strangely silent about the common practice of subsidizing handsets. This is because it is also very popular. The funny thing about subsidies is that subsidizing something is popular with customers but overcharging something else to pay for a subsidy is not ;) Popular though handset subsidies may be, they are still a distortion of the market. Customers with little or no interest in changing their handsets are made to subsidize, through higher usage and subscription costs, more fickle consumers prepared to churn to whichever provider offers the most fashionable handset.

The thing with subsidies that regulators usually get upset about is that it means people do not pay a fair price for what they get. They pay too much for some things and too little for others. The justification for business is that it all works out fair on average, but that is little comfort to the customers who do worse than average. The business rationale is even more straightforward: it influences people to buy more than they probably would otherwise. Think of switching mobile service provider to get a new handset and signing a new contract as entering a loan arrangement, but where the interest rates are not clearly explained. The aim is to present the price in a way that looks more attractive to a customer, whilst actually being more expensive, or in such a way that as to encourage the making of a purchase or commitment they otherwise would not. Sometimes, though, selling things cheaply may be an inappropriate strategy. Charging a lot may reinforce the impression of quality. This is true of Apple's iPhone. The last thing Apple wanted is a subsidy from service providers. Much better that the customer pays the full price and Apple's iPhone retains the cachet associated with that price. Even better still that the product is guaranteed to sell well despite being much more expensive than competitors. So Apple have used their unique market position to reverse the normal economic principles governing the relationship between handset manufacturer and service provider. Instead of wanting the service provider to subsidize the handset, Apple has insisted on receiving 10% of ongoing revenues in its recent deals to provide iPhones to European providers. The upside for the service providers is they do not have to pay a fixed amount for each handset. This eliminates some of the risk associated with subsidized handsets; customers may not make enough calls to generate the revenues needed to compensate the provider's initial outlay. Think what Apple's revenue share means for the customer. They do not know it, but they pay for their mobile phone not once but over and over. As well as the price of the handset, 10% of every call charge will go to Apple. What is Apple really doing to earn this money? It is not as if they are bearing any of the costs associated with connecting the call. Not that I expect this pricing oddity will generate any interest amongst the regulators either - they have no chance of beating Apple in a popularity battle if the implication is that the iPhone's price would be even higher. That is the implication. The true cost of an iPhone = the price people think they pay for the handset + 10% of the cost of usage. So buying an iPhone is just another kind of loan arrangement, where the initial price is held low but the customer has to pay more in the long run.

The moral of the story here is that, in a free market, you can charge whatever you like, and however you like, if people are happy to pay for it. And what people think they are paying for, and what they actually pay for, may be quite different. And that there is no such thing as a free market, which is why businesses do exclusivity deals like those being made between Apple and service providers in each country. So there are lots of morals to this story ;) Some people are so keen to get an iPhone they simply do not care who provides the network and hence what their phone service is like. Apple knows this and is exploiting it. Service providers will happily pay the extra to Apple if it secures them revenues from otherwise unattainable customers. They will try to enforce the exclusivity element of their deal, as demonstrated by AT&T's robust response to a Belfast firm offering to unlock iPhones. If regulators really cared about ensuring free markets work correctly, they would question the purpose of exclusivity deals between handset manufacturers and service providers. But regulators rarely pick a fight they think they will lose and this fight is not likely to make them more popular either.

Because some people will suffer any network service to get Apple's handset, one question is when, not if, Apple will enter the market as a virtual network. If Apple's brand continues to be so much stronger than the brands of the networks it deals with, it might as well spin the Apple brand into the virtual supply of the service as well as selling the consumer electronics. This would fit perfectly with the Apple mantra of exercising control over the complete customer experience through proprietary rights over all the elements of the products and services that contribute to the experience. All they need to do is to build up market share and when they reach the critical point, just port all their customers to the new Apple service provider. They have already begun down this path, as demonstrated by Apple taking over the ownership of service activation. Instead of this being done by AT&T, new iPhone users initiate their service through Apple's iTunes portal. If Apple were to become a service provider, an even more intriguing question would follow. All and sundry, including Arun Sarin, have pointed out over the last few years that usage charging will eventually be eliminated in favour of eat-all-you-want subscription charges. If customers are not paying for usage, and are keen to have their handset upgraded at regular intervals, it also follows that Apple would not need to levy a subscription fee either. They could simply offer a contract where the customer pays for the handset and is given a year's worth of service inclusive in the charge. Then, when the year is up, if not sooner, the customer would be encouraged to buy the latest model of handset. By getting all its charges paid up-front, Apple would have a huge cashflow advantage over other providers. The worst that could happen would be that people unlock their iPhone and take it to another network, but this would be of little concern to Apple who would already have banked all the revenue they were expecting to earn from that customer. Apple would also be safe in the knowledge that the customer who churns will incur extra service charges to be on another service provider, and that the churning customer will not be able to get a new Apple phone without once again paying a full, service inclusive, charge. In addition, some of the features would only be supported on Apple's network. So customers who buy the phone and integrated service can be expected to stay loyal to Apple so long as the phones continue to be more desirable than those offered by rivals.

It is possible to continue this thought process a few steps further still. So far, we have envisaged a world where the service for your calls and data is included in the cost of a new telephone. As we can see in the evolution of television and other entertainment services, everything could be supplied down the same bitpipe. Apple, with good reason, are aware of this and already sell a television product. If the cost of a telephone service were bundled into the one-off charge for a handset, why not apply the same model to all forms of entertainment? Many television providers already charge for both the customer's choice of channels and for rental of a personal video recorder. By the same logic, why not bundle the cost of the channels into the charge for the recorder or whatever the device employed to manage the download and replay of content? The industry will simply have returned to the same business rationale as when Japanese hi-tech firms went on a spree of buying Hollywood movie studios: make money from the hardware, and treat the content as the way of enticing sales. If the content is free because it is user-generated, like YouTube, all the better for making fat profits. So in future I expect you may see something that would currently be unimaginable. Interactive television would encourage viewers to make a voluntary payment to the makers of a television show they particularly enjoy. They would just need to press a button and call up a donation screen during or after the show. This approach to raising funds would not be that different to the way PBS public service television in the US depends on donations. Leaving a tip would be the viewer's way of showing appreciation, like paying for service at a restaurant. Such tips would be voluntary, but it would be the one way to really show viewers appreciate the creativity of the artists, or the objectivity of the reporters, that made the program. Otherwise the typical customer will note that their bills for hardware state that service, including artistic creativity, is included.

What would this mean for revenue assurance? Well, it would make retail billing very very simple, so the risks of leakage at that end would fall. However, it may also lead to more complicated revenue sharing arrangements, with lots and lots of risks for everybody either paying or receiving a share. Do I really think this will happen? Yes and no. I doubt this exact series of events will happen, but I do think that pricing and revenue sharing arrangements will get more varied. Traditional assumptions about who pays who for what will be overturned at least sometimes if not most of the time. A lot will come down to bargaining power - which is why Apple is able to get unique deals. That bargaining power is inextricably linked to the customer's perception of what they are paying for. To increase their influence, service providers will need to do a better job of selling their service, rather than relying upon handsets to do it for them. So far they are losing the battle. Paying mega-bucks to Apple may help win more customers, especially useful with a flagging brand like T-Mobile in Germany, but it reinforces the idea that customers should be indifferent to who provides the service. That will suit the handset manufacturers fine. They in turn will continue to branch out to be seen as an element in the supply of content, as in the case of Apple's iTunes and Nokia's new online music service. The big manufacturers are levering their brand loyalty in order to force networks into a secondary role in terms of managing the relationship to customers, and so far it looks like the networks are struggling to respond and build more loyalty. Even the Taiwanese handset manufacturer HTC, little-known to consumers but makers of extremely popular devices that are typically supplied under the service provider's brand, has changed its business model in response. Now HTC has reorganized its business in order to make and promote HTC-branded handsets. I can personally sympathize with their business logic. Why make a great little device and put the service provider's logo on it, when customers who contact the provider about the device just get informed that they should contact the manufacturer instead? In my case I contacted T-Mobile UK about unlocking the HTC-manufactured, T-Mobile branded handset known as the MDA. T-Mobile UK responded by sending me a letter with a pin number and stating I should contact the manufacturer for instructions on what to do with it. That is pretty poor brand management in itself, but what made it hilarious was that they even directed me to the wrong manufacturer - for some reason they mistakenly told me that Sony Ericsson made the device! Luckily I knew better so wasted no time because of T-Mobile's incompetence.

Who will win this struggle with brands to get the greatest bargaining power? In my opinion, the handset manufacturers have already won and Apple's revenue share deal is only the first sign that the war is over. On the Interbrand index of the top 100 global brands in 2007, Nokia ranks 5, Apple is at 33, and even LG makes it to the list in 97th place. There is not a single service provider on the list. The only businesses that can realistically compete with the manufacturers are the other big players in the software/internet/technology world - the Microsofts and Googles - and the makers and owners of content. Given how Apple is currently bashing the music industry into submission, it looks like the content makers are faring little better than service providers, although if Apple lost share in the download market to rivals like Microsoft and Nokia that might help the content companies get on a more even footing. Even so, this struggle between hardware, software and content is where the real action is. Communications service providers have turned themselves into the technology world's equivalent of airlines - unloved and only able to compete on price. Which only leaves one question in my mind: now that they get a share of service usage, who assures the revenues of Apple?

Posted by Eric on August 28, 2007 11:51 AM | Permalink | Comments (0) | TrackBacks (0)

Most media and telco businesses are constantly trying to find ways to generate more revenue from advertisements. The rise of the Googles of the world is nothing more than a bid to steal ad revenues that would otherwise be spent on traditional media. Customers, though, do their best to avoid them. Both sides are using increasingly sophisticated technology to win this battle. Ofcom's 2007 review of the UK communications market hints at a vital sign that customers may be getting the upper hand over traditional media. It reports that 15% now have a digital video recorder (DVR) and up to 78% of adults who own them say they always, or almost always, fast-forward through the adverts when watching the shows they have recorded. That undermines the prospects of using traditional ad breaks as a way to promote products, and hence inhibits the revenue potential for broadcasters.

The likely retaliation from television broadcasters will be to weave more advertising into the actual content of the show, like the infamous Zero Halliburton case that featured prominently in the television show Lost. That was no one-off for Zero Halliburton. Placement in television and films is a key element of Zero Halliburton's promotional strategy. Several episodes of Lost revolved around how the case was durable and virtually impossible to break into. National laws to prevent such aggressive product placement were stretched to their limit when handling the inclusion of a product that was also so deeply and repeatedly embedded within the plot of a popular program. The EU solved the problem of US shows featuring product placements by giving in - instead of trying to stop them, it changed course and gave the broadcasters the right to charge for them like any other adverts.

Other tactics will be to offer more interesting ad campaigns where the consumer pulls the ad rather than having it pushed at them, or spreads the content by choice, on a viral basis. However, only so many campaigns will be able to get the attention of the public meaning that the traditional forced push of unavoidable adverts will still be key for many companies. So rather than putting money into traditional television, expect more money to go into internet-based campaigns, where the power of computing offers more options and can force eye-catching adverts to be placed precisely alongside content. One of the factors driving companies, including traditional broadcasters, to offer IP-TV is that it will give them increased control over placement and prominence of adverts within and alongside the television stream. Although I say that adverts are placed 'alongside' content, a lot of internet advertising appears right in the middle of the content, so can hardly be avoided. There has always been a large segment of the internet/computing universe which is altruistic/open source/anarchistic in nature. The question in my mind is whether they are looking for ways to write browser code to strip advertising content and suppress its display. And if they succeed, where would that leave the business model of the Googles of the world?

Posted by Eric on August 26, 2007 11:27 AM | Permalink | Comments (0) | TrackBacks (0)

You have got to love people who shameless promote themselves. Love them or hate them, I forget which ;) So prepare yourselves for the people who "pioneered bank revenue assurance in the world". But before I tell you who they are, can you guess which country they come from? Is it:

1. Switzerland
2. The United States of America
3. Japan
4. Nigeria; or
5. Germany?

If you guessed the United States, you would be wrong. They are way behind. As are the Europeans and pretty much every other country with an advanced banking infrastructure. Nope, the salvation of banks that allegedly leak billions of dollars comes from the country that ranks 142 in the world corruption index of Transparency International. Yup, Nigeria is the home of EDP Audit & Security Associates, the firm that claims to have first introduced revenue assurance services to "the banking industry of the world". You can read the full story here (or at least you can read it there most of the time - links to Nigeria's most widely read newspaper are seemingly erratic). But be warned. They are not staying in Nigeria. As their managing consultant explained:

"We are set to export the services now to South Africa, Europe, North America and Asia; our consultants are technologically poised for the challenges.”

And that is not all. Be afraid. Be very afraid. Because they also do telco revenue assurance!!! :(

One silver lining for all of you worried that your business cannot compete is that this ISACA-registered audit firm will not be getting too much business over the internet. Nope. They may have IT expertise pouring out of their ears, but they do not seem to have a website...

Posted by Eric on August 24, 2007 11:50 AM | Permalink | Comments (1) | TrackBacks (0)

How much does it cost to use a T-Mobile hotspot whilst roaming overseas? You might think that is a straightforward question. I used to think so. After about 20 minutes trying to make sense of the confusing and piecemeal information on the T-Mobile UK website, I gave up and decided to speak to someone instead. The first person I spoke to, a dedicated adviser on their roaming services, did not know about hotspots and redirected me to someone dedicated to providing advice about that product. That person genuinely did the best job they could in trying to answer. He read the information on the website, he spoke to various colleagues and generally told me everything he found out. But at the end he had to admit some of the information he found out seemed to be contradictory, so he could not be entirely sure. He deserves a pat on the back for his honesty. It does make me wonder, though, if it is so hard to check what the price is supposed to be, how can anybody tell if they bill it right?

Posted by Eric on August 23, 2007 12:54 PM | Permalink | Comments (0) | TrackBacks (0)

Lots and lots and lots of people talk about revenue assurance KPIs. Talking about KPIs is a convenient way to express an expert opinion without needing to show any data in order to justify it ;) So I am grateful that the TM Forum's Revenue Assurance team has issued a standardized workbook of revenue KPIs. Members of the TM Forum can download the review version of the workbook from here. Everyone else will have to wait until the review is over; the public release is expected in early 2008.

Thumbs up to the TMF's RA team for developing standard KPIs that complement the TMF's operations map, but only time will tell if the standard really does become a standard. That only happens when large numbers adopt the standard in practice. The early indicators are good, with several tier one companies expressing an interest in using the standard as a way to fast track improvement of their internal measurement regimes. I expect a number of those companies will go public on their adoption of the standard in the next few weeks. It also sounds like some will go one step further and use the KPIs to actively benchmark performance relative to each other. If that catches on, we will see for the first time a major improvement on the current game of basing comparisons upon ill-defined and speculative estimates.

One problem with KPIs, however, is what is considered to be key. What may be key for one business may be trivial for another. The same business will need different KPIs as it changes. It may be best to treat the TMF's workbook as a menu from which RA departments can select what fits with their priorities. Hopefully the review phase will prompt some providers to highlight additional performance indicators that they consider to be key. Then we will see an evolution of a single set of industry KPIs which everyone can draw upon and contribute to, instead of just a lot of idiosyncratic opinions. So perhaps I should not be so keen on this standard: it threatens to put people like me out of business (or at least to shut us up for a while.) ;)

Posted by Eric on August 21, 2007 03:42 PM | Permalink | Comments (0) | TrackBacks (0)

Last week was good for old-fashioned telco execs. Sure, share prices are crumbling and that means some of them can expect to "earn" a few million less in bonuses than they had hoped. But on the other hand, Skype collapsed. For a couple of days, nobody could use its peer-to-peer VoIP service. That must have been good for traditional telcos in lots of ways. First, some of the 220 million Skype users unable to log in to the service must have blown the dust off their old phones and used them to make calls instead. Second, a good number of businesses must have stalled, suspended, reduced or scrapped plans to adopt VoIP. Third, old-fashioned telcos get a nice easy marketing pitch - reliability of service - that should help justify keeping their prices a little higher for a while longer.

Skype is back now, but the question is how much the outage will cost the company. The most recent quarterly revenues were about US$90m, so you can guesstimate that the outage has meant US$2m of potential sales were not realized. The longer-term consequences for the business are harder to determine. Many have turned into doom-sayers for VoIP, as a result of not just this failure but also the financial and patent difficulties faced by providers like Vonage. Others are more upbeat: this article sees the onward march of VoIP as inevitable, in part because it is cheap/free. I have to agree with that logic. People will always want plenty of something if it is free. But you will never make a profit by giving things away. Skype makes money through calls to old-fashioned lines. That means that its own popularity will eventually undermine its revenues: as more people adopt Skype, so more will make free Skype-to-Skype calls instead of chargeable calls. So the only business logic that makes sense is that a strong VoIP offering helps to maintain competitive advantage as part of a holistic internet offering where all needs are satisfied at a one-stop-shop. That must have been the rationale for eBay's purchase of Skype, creating the trinity of eBay-Skype-PayPal. However, it follows that failures of any single component may undermine faith in the entire holistic product. I would not buy a car with faulty brakes, no matter how good the engine. By analogy, Skype may deter people from using eBay if they reason that the failure of one element may indicate the possibility of (undetectable) glitches elsewhere. Of course, there may be a radically different business model for Skype that most commentators have yet to apprehend. Top marks go to this conspiracy theory which argues that Skype will earn its revenues by spying for the USA. As Skype is headquartered in Luxembourg, one hopes that the EU has the wherewithal to spy on Skype and find out if they are spying on us!

Like most people, I am not overly worried about American secret agents spying on me. I am sure they do it, but it must get just as boring as watching Big Brother ;) No, a much greater concern is that the people behind Skype are also behind the new on-line television offering, Joost. Imagine depending on these guys for your television. Then imagine a two-day outage. That would be truly terrifying :)

Posted by Eric on August 19, 2007 02:10 PM | Permalink | Comments (0) | TrackBacks (0)

When I was at high school, people always seemed to be forming societies. First, they would announce that they were going to launch a society. Second, they would take the names of people who wanted to join. Third, they would put up a notice board to let people know what was happening. And fourth, nothing ever got put on the notice board, because from that point on it was all boring hard work and nobody could be bothered.

It was just the same when I went to university. Lots of eager freshers would choose which groups to join in fresher's week, would turn up for the first meeting, would find it was all boring and hard work, and would never show up again. So when I joined the university Amnesty International society I was a bit fed up when I arrived late for the first meeting and got the job with least appeal on a CV and most work in real life: Stalls Manager. Not President, or Treasurer or Membership Secretary or Vice-President or anything cool like that. Stalls Manager. Stalls Manager. So I had to always turn up every week, regular as clockwork, and set up and pack away the stall in the student union building. I had to lug the table and all the publications from the store cupboard, up the stairs to the foyer, and do the reverse at the end. And I had to persuade anyone walking by, heading for a beer or planning a liaison with someone of the opposite sex, that writing a letter on behalf of some Chilean prisoner of conscience might be a better use of their time. Tough job. But I tell you, it was great. For a start, I actually did something. It was not like I spent my time organizing stuff or planning things or managing things. I was just doing things. Like getting people to write letters. That taught me a lot about how to get things done. For example, it taught me that if you want people to write a letter you need a chair. There were never any chairs in the student union foyer so people would naturally migrate to you if you had a spare chair. Once they came over, getting them to write a letter in exchange for a sit down was relatively easy. And being sat behind the stall every week gave me a fantastic power base as the man who everybody knew was in Amnesty International. So it was easy as pie for me to get elected as President the following year ;)

It is with great humility that I share the news that I am, for the second time in my life, a President. This time I made it easier to get elected by ensuring that I was the only member when the Presidential election took place. Shocking behaviour, I know, but I gather that plenty of other Presidents do the same thing ;) At least I actually met the membership requirements of my society (anyone can join) which is one better than President Rob of "telcos only" GRAPA. "What are you President of?", I hear you ask (excluding the half dozen existing members, who found out about it by accident). The answer is that I am President of the Facebook Revenue Assurance group. Yup, I set up a revenue assurance group on the social networking site that most recently went over the tipping point. Our mission at the Facebook Revenue Assurance group is to do good stuff for revenue assurance without taking ourselves too seriously. Unlike other Presidents you may have heard of, I promise a seamless transition to full democracy as soon as possible. Everyone will get an equal vote. No President will be allowed to serve more than one year in office. To be eligible to stand for President, there is only condition: you have to do something useful first. What I mean by the word "useful" is something useful to the people in the society, and to revenue assurance in general, not just something useful for yourself. Press releases proclaiming thought leadership, video taped speeches and advertising-spam will hence not count as meeting the "useful" criterion. I launched the society and put up the notice board (although, to be fair, the noticeboard comes as standard with Facebook) so have done my bit. In other words, I have done the interesting bit ;) Now it is time to hand over to someone with fresh ideas (or any ideas, for that matter) so they can do all the hard work involved in running a real society. Anyone wanting a fancy title to put on their CV, but not wanting the hassle of hard work, need not apply. That should thin out the field of contenders. (I just hope we find a contender before power corrupts me and I start writing books that nobody buys but everyone is obliged to own. You know, like "The Wisdom of Chairman Rob" or whatever they call their sacred text over at GRAPA. I gather one of the followers suggested some changes to the sacred GRAPA text the other day and got treated like he crossed out a bit of the Koran.) So please please please help us form a truly democratic society for revenue assurance. (Or not, in a democratic abstention kind of way.) If you want, you can enlist today, do something useful the day after, and become President the following weekend. Do not ask what revenue assurance can do for you...

... ask what you can do for the Facebook Revenue Assurance group :)

Posted by Eric on August 15, 2007 10:33 PM | Permalink | Comments (0) | TrackBacks (0)

Telcos seem to love saving the planet. Cynics might say that is because telcos use a fraction of the energy of heavy industry or the transport sector, and that being green generates the kind of good PR that telcos often struggle to get otherwise. Taking the reigns of the green bandwagon seems to have done James Murdoch no harm. The CEO of UK's BSkyB, and offspring of media mega-tycoon Rupert Murdoch, now regularly gets a mention whenever journalists write about eco-friendly big business. Hanging out with Al Gore and the environmental lobby also seems to have helped his chances of taking over his dad's empire. But even BSkyB could do more, as I pointed out over at the Greenbang blog.

Nevertheless, telcos now seem to be leading the way when it comes to carbon trading. When Australia's new carbon trading exchange went live a few weeks ago, it was M2 Telecommunications that was first in line to buy some credits. Buying credits, of course, really means just paying an extra tax to reflect the cost of rectifying the damage done to the planet. So it is like paying for a new tree to be planted every time you emit as much carbon as the tree would absorb. Great idea. Everyone loves it. It is nice and simple. Yeah, right. Hold your horses. Just because ideas seem simple to the man in the street does not mean they are simple at all (that is why the man in the street gets angry when his phone bill is wrong). For a start, how much does it cost to plant a tree? I planted a tree in my back garden last year but I doubt my costs were the same as those incurred in a big plantation. Trading means you have a market, and that means prices can go up and go down. So if you can freely exchange permits you could make a profit by buying low and selling high, or alternatively you could waste a lot of money buying too many permits when they are expensive and finding you cannot sell the excess. So you got to love telcos for being first in line to buy carbon credits. But you also got to ask, given past indications that telcos excel at wasting money, who in the telcos is responsible for checking that they get value for money? My guess is that most of the people responsible for buying carbon credits will have objectives and experience in the field of marketing or health and safety, but not in finance or asset management. That makes it time for a new kind of assurance - one focused on optimizing the cost of carbon.

Posted by Eric on August 8, 2007 04:03 PM | Permalink | Comments (0) | TrackBacks (0)

Everybody seems to agree these days that a more regular check of electricity and gas meters might help users use less energy. That is big news with politicians worldwide, as they publicly set tough targets for reducing carbon emissions and privately worry about the consequences of dependence on dwindling fossil fuels for both economies and security. It is also big news for the utilities industry, which would love a cheap alternative to sending someone round in person to read the meter. You can also expect them to be looking for big taxpayer subsidies if they are expected to replace their stupid old meters with new "smart" meters designed to support better energy efficiency. So it is nice to see the electronic communications industry are working hard to find solutions to save the planet, or cash in, depending on how you look at it. I have blogged before about utilities using power line communications to link to smart meters. That solution is elegant because if the metered customers is connected to an electricity line, using that line to carry data as well avoids needing extra infrastructure. The alternative is to adapt meters with standard phone technology, allowing them to make and receive calls. The advantage here is that the communication infrastructure is largely in place already. With wireless especially, as long as the meter can pick up a radio network signal, no further infrastructure is needed, meaning lower costs and less disruption. It remains to be seen exactly how many businesses and homes have meters suited for a mobile phone call - the cupboard under the stairs hardly seems like the ideal spot. According to this article, however, there is at least one business betting on adding GPRS modems to traditional meters. We shall have to see which technology proves to be a winner.

Posted by Eric on August 8, 2007 03:27 PM | Permalink | Comments (0) | TrackBacks (0)

Phones are great these days. They take pictures, play music, record video, remind you to buy flowers for loved one's birthday, and tell you where you are when you get lost. The average mobile phone has more computing power than Neil Armstrong took with him to the moon. The hosts of my web domain now have a portal to manage their servers using an iPhone. Yup, phones are really powerful computers that can do lots of useful things. So why are there no phones that give you a real time update on how much your next bill will be? For a start, the phone knows what calls you made, who to and for how long, so there is no shortage of raw data. All it needs to calculate a bill is to add a little bit of tariff data, perform a few multiplications and - bang! - the customer can see how much their bill will be in real time. Which would be great for people on the move, like me, traveling from country to country and just a little bit curious to know how much their roaming bill will cost.

As far as energy is concerned, the UK government has realized the importance of presenting real time data to customers to help them manage consumption. In order to help reduce energy use and carbon emissions, they have launched a consultation which covers providing bills with graphs showing historical usage and using smart meters as well as giving customers real time feedback on use. The idea is that if people know how much things cost as they use it, they use less. Sounds obvious, really. What was my question again? Ah yes, why are there no phones that give you a real time update on how much the next bill will be? Ooops, I think I know the answer now....

Posted by Eric on August 8, 2007 03:11 PM | Permalink | Comments (0) | TrackBacks (0)

For a long time I found that the phrase "revenue assurance" was used in two contexts only:

• Telcos trying to find and plug leaks, something I know about; and
• Subsidies given to farmers in the U.S.A., something I know nothing about.

Well, it is wonderful that people are using the phrase, even if they all seem to mean something slightly different when they do ;) However, the question I have been asking for years is who first coined the term "revenue assurance"? Try as I might, I can never get a definitive answer. Which is a shame, because whoever first used the phrase really deserves to be called a thought leader, unlike most of the self-appointed thought leaders we hear about these days. The best I have done so far is to establish that the phrase was being used in BT back in the early 1990's. That puts them way ahead of the average telco, but hardly proves they were first. Everybody is doing revenue assurance these days, but who named it "revenue assurance" first?

Posted by Eric on August 8, 2007 02:13 PM | Permalink | Comments (0) | TrackBacks (0)

Attending a conference earlier this year, I was lucky to meet Lior Segal of Partner Communications, the Israeli wireless operators who market themselves under the Orange brand. I was lucky because Lior is a CPA, MBA and Attorney at Law, as well as being chief of his company's SOX & Revenue Assurance Department, thus making him the ideal person to challenge with one of my favourite questions: how to balance responsibility for accurate reporting with the pressure to improve the bottom line. I will not try to reproduce from memory the elegant and considered reply he gave, as I doubt I could do it justice. But I will state that Lior did not shy away from the central problem: that there is the risk of conflicts between those goals. Lior instead took the time to explain how he ensured those risks were managed and mitigated. Step one in risk management is, of course, identifying the risks that need to be managed. That is why I have so little patience with consultants who talk about revenue assurance as a panacea for all leakage and governance ills, without highlighting that a seeming cure for leakage may make governance worse, or vice versa; see here for more on that.

So whilst I was lucky to meet Lior, he was rather less lucky to meet me. As well as asking awkward questions, I lack the elegance to jump straight to a good answer. Instead I just try to bulldozer my way through all the options and see which one gets damaged least. The simplistic solution to potential conflicts between reporting and assurance is to have a strong separation of duties. Everyone can agree that is ideal, especially if you want to live in a communist society and employ ten people to do a job slightly better than one person would have done. Whether to separate responsibility for the integrity of reporting from the job of closing revenue leakages is a similar problem to whether to have the people assuring billing separated from the people doing billing. Separation is great in an ideal world, because in an ideal world everybody works hard, knows what they are doing, is competent and knowledgeable and trained. That sounds a bit like a communist utopian dream because it is: getting lots of people to work hard, have sufficient knowledge, skills, training etc usually means spending lots of money. If you can get a similar calibre of job done at much less cost, most people will be happy with that. One complication is that although the knowledge needed for revenue reporting and revenue assurance may have many overlaps, the skills needed can be very dissimilar. For example, revenue reporting does not require imagination, unless you work for a company like Enron. Assurance, however, should involve some imagination, because of the need to anticipate what might go wrong before it does, or to guess where to employ resources looking for leaks. Without imagination, assurance may end up as useful as health and safety checks on the Titanic. Another complication is motivation. I have seen more than one revenue assurance department become deflated after they were excluded from competitions asking employees to suggest ways to cut costs or boost revenues. The people in revenue assurance spend much of their time inventing and executing similar ideas, but their only reward is their regular pay packet and not much thanks. However, if you give them financial incentives, that can cause problems for reporting, because they have the incentive and detailed inside knowledge to find ways to cheat the system. For a start, they are usually the only people able to report on the benefits they add. In fact, their knowledge may be so detailed and so specialized that nobody else may be able to identify when they cheat the system.

The trick here is to strike some kind of balance: realize cost benefits for educating and developing staff together, wherever possible, but make sure assurance and reporting have different objectives and the people who work at each goal look at the world differently. Try to avoid people assuring the things they also report on, and where it is too costly to avoid, make sure somebody else is checking that everything is fine (and that they have no motivation to cheat either!) By all means allow people to move jobs backwards and forwards, making for strong cross-fertilization of ideas and know-how, but ensure that the rewards and expectations for each kind of job are distinct and do not get confused. All of these are easier said than done. Which is why I am glad it is Limor's responsibility and not mine. CPA, MBA, Attorney... he needs to be the lot ;)

Posted by Eric on August 7, 2007 04:02 PM | Permalink | Comments (0) | TrackBacks (0)

Blogs about Rob Mattison are like buses: you see none for ages and then five arrive at the same time. People might start to think I have an obsession with the bearded guru-president of global revenue assurance. Truth is, I do not, as is evidenced by never giving him a mention in my blog until recently. I knew who he was: runs a small family consulting business, does lots of conference presentations, wrote a self-published book (or three, or five, or twenty - the more I look, the more I find). But recently his antics have been getting on my nerves. Forming GRAPA, issuing press releases, and all that marketing is his prerogative. If he wants to spend his money on this kind of activity (press releases do not come free, you know) that is up to him. I admit I am annoyed he is trying to pretend he speaks on behalf of a whole profession whilst deciding who can join, who is excluded and who gets to sit on which chairs. He is more like a king than a president. However much it irritates me, none of this is immoral. But this time he really has gone too far.

The other day Rob decided to update the Wikipedia article on revenue assurance with a blatant advert for his own book. You have to draw a line somewhere. I do not care how many people have joined his society, how many think he is great, how many people I upset, how unemployable I become by saying this. What Rob did was wrong. Pure and simple. Wikipedia is supposed to be an encyclopedia (the clue is in the name) not a social networking site and certainly not an advertising billboard. It is written and policed by volunteers. These people donate their spare time to trying to provide everyone with a reliable and free encyclopedia. Wikipedia is often criticized in the press because it is so easy for people to abuse it. But in reality it is a tremendous success: the content is generally of a very high standard and the volunteer editors do a good job of removing or highlighting any spam soon after it gets posted. What motivates the volunteers is not financial gain; the point is to provide everyone with a good free encyclopedia, especially those people around the globe who lack the money or resources to obtain this quality of reference text any other way. There is a difference between advertising and providing information, and the Wikipedia rules go into detail to help explain that difference. But ignorance of the rules is no defence. Rob must have known that advertising his own book was wrong. If you look at other pages on Wikipedia you do not see adverts for books sitting in the middle of the text. Whilst Rob heaped praise on his own book, he failed to say that he wrote it. Very naughty. Rob also posted the advert anonymously. Maybe he was hoping that the readers of the article would think that this praise came from a neutral, someone who does not profit from its sale. Very very naughty. The only reason we know he posted it is that he identified himself whilst using the same IP address to bitch on another page about not getting respect. How about that for an unconventional way to earn respect!

I doubt Rob can find impartial justification for the praise he gives to his own book. For a start, it is self-published, the modern equivalent of vanity publishing. Just take a look at his publishers. Anyone could publish a book like this, so it is not as if Rob used a publisher that edited his work or selected it on merit. Secondly, he now gives it away for free on pdf format, which must be some indication as to how many copies have actually been sold. Amazon ranks it below the top million bestsellers. According to this site that means it sells less than 1 copy every 10 weeks. That would imply he may have sold less than 10 copies through Amazon since the book was first published. Searching around for independent reviews I found only one, which was okay but hardly as glowing as the one that Rob gave himself. I did search very hard for reviews: although I could find no reviews for that book there were some fair-to-middling reviews for some of the many other books he has written, and I even found that Rob and family runs more businesses/websites than I had first imagined (with all those different front companies, how much time can he spend on each one?) So, put simply, you would have to be shameless to write in an encyclopedia what Rob wrote in Wikipedia. His only justification must be that he thinks his book really is that good. That is hardly the impartial and objective point of view you would expect from someone writing an encyclopedia entry.

Maybe Wikipedia should not have a revenue assurance entry. When my friend, Gordon Fordred, started the page, we naively thought that the revenue assurance profession might gang together to help put good, independent, verifiable content on it. Instead, the revenue assurance profession has often done the exact opposite. It has embarrassed itself. Unsupported hyperbole about the benefits of revenue assurance, cynical advertising, a disregard for Wikipedia's rules: these are not the hallmarks of a respectable profession. Anyone can see that Wikipedia is meant to be an impartial reference work where every statement is verifiable and justifiable. That means stating both sides to the story, not just the one side that presents us in the best light. It also means having identifiable sources for information, not just repeating unsupported claims made elsewhere. Of course, if you just present the side of the story that flatters yourself, you will not gain respect anyway. So if people are looking for respect through adding to Wikipedia's articles, they would be better off moderating their input and providing some balance.

I admit that the Wikipedia page contains a link to my blog. Per my understanding, the link is consistent with Wikipedia's goals and rules; and I checked them in some detail. Links are meant to point to places where people can easily get further useful information. In this blog I point out what is wrong with the world with revenue assurance as often as I point out what is right with it. If there is a better place to find out what is wrong with revenue assurance, that should be linked to instead. In fact, if there is a better place to find out what is wrong, someone please tell me so I can start reading it! It is not like I need the link in Wikipedia - it generates only a small number of hits. I think it should stay there because this blog is my attempt to ensure some balance, if you will.

Pity the people who cannot see that if we do not act like professionals then we will not be treated like professionals, no matter what praise and congratulations we give to ourselves. Please help the revenue assurance profession. If you have the spare time, improve the Wikipedia page on revenue assurance by adding informative, impartial content with clear links to the sources that support all assertions, and by monitoring the page for spam. All of us have the time to be discerning and to denounce unprofessional conduct. True and balanced insights will turn revenue assurance into a profession. Snake oil sales tactics will not.

Posted by Eric on August 2, 2007 01:18 PM | Permalink | Comments (2) | TrackBacks (0)

Some years ago, Vodafone UK had an unusual attitude to revenue assurance. They had a billing assurance department and they believed that revenue assurance was the job of one person in that department. The revenue assurance job was responsible for the validity, completeness and accuracy of all the data that reaches the billing system. Once there, the responsibility handed over to the rest of the billing assurance department. That was very unorthodox, even back then. Most people seem to agree that revenue assurance is the end to end job and that billing assurance is the subset concerned with the billing end of the chain. There is also increasing recognition of the fact that whilst symptoms of problems usually occur in billing, the causes are typically earlier in the processing chain. That means you need to spread the revenue assurance effort across the entire chain, beginning with the collection of data reflecting new orders, network events and such.

Where the chain starts and stops, and where the most effort is needed, is not something people agree on as often. When people say they do end to end assurance they often pick a convenient definition of what the ends are. I mean convenient in the sense of what they know how to do or convenient in the sense of their authority in an organization or reflecting internal telco politics. Not many people doing end to end assurance really do much work to ensure, say, that all orders are taken correctly or that switches are configured properly. There is even more disagreement about the other end. You would have to be very unconventional to exclude billing, but their are differences of opinion about the end point afterwards. Some stop at the output from the billing system in terms of the feed to the print vendors for the bill. Some go further and really check the bills are correctly printed and sent. Some think the goal is correct reporting to the general ledger. Some think the end point is the collection of cash and the maintaining of customer accounts. So whilst most people act pretty confident when asked what the scope of revenue assurance is, you often get the feeling that there is some fraying at the ends.

Over at LinkedIn Answers, Nathan Cooks of Cell C asked an interesting question that touches on all of this.

Can anyone tell me how they would define the role of billing assurance in a company that already has a revenue assurance department?

Secondly what are your opinions on where a billing assurance department should fit into the company structure?

These are question that I have and there are some very obvious answers but I would like to know if any other opinions exist on the matter?

Thank you for your time.

You can imagine how hard I found it to give an answer within the limited number of characters allowed ;) But for those of you who do not read that site, here it is:

I have worked in telcos with a separate Billing Assurance dept and in telcos which did the same work without a separate dept. Fundamentally, I do not think there is one right answer: it depends on the telco. Do not be dogmatic. At this level, org structures are most influenced by the personal and political considerations of the people involved. It might be nice if execs tried to be objective and worked out what was best on a more analytical basis, but they also need to get the best from their employees and that may not be the same as a textbook answer.

After saying that, I will try to give a textbook answer. The consulting/software firm Cartesian issued a document where they defined the difference between Billing Assurance and Revenue Assurance; see here. They consider the end goal is the same, but that BA is a subset of RA that relates solely to the billing system(s). That seems like a decent definition to me. Cartesian goes on to say it is important to distinguish BA within RA because it involves specialist knowledge of how billing systems and the processes around them work. If you accept this line of reasoning, you have a straightforward choice. First, you could place BA in the dept with best specialist knowledge of billing. This might be a Billing dept in Finance or it might be a Billing Ops dept in IT. The advantage is that you try to have the relevant skills and knowledge in one dept, making communication, training and recruiting easier. The disadvantage is that you have no separation of responsibility. The BA team may not do a thorough job of checking what their colleagues are doing. They may suffer the same misconceptions or be blind to their faults. Second, you could separate BA from the people they oversee, to give some independence. The key here is that the more separate they are in the company structure, the greater the objectivity of BA, but also the greater the overheads in terms of recruiting and training people in BA, and the greater the overheads in terms of communication between BA and the departments that they scrutinize. The third option is to have a blend between the first two. In this case, some detailed day-to-day assurance work is performed by the individuals responsible for the processes and systems, and some higher-level assurance is conducted by a separate function, which provides a form of internal control or audit.

The right choice depends on company culture and dynamics. A telco which is entrepreneurial, is smaller, is in a rapid growth phase, or has flat management should probably keep BA responsibility with the people who do the work that needs to be assured. They sacrifice independence for flexibility. Imposing strong lines of division may otherwise lead to underfunding of BA or too many internal conflicts. A larger, more static, hierarchical, cash cow/cost conscious business is better off with separating BA from the billing being assured. They can afford to spend more time and money on staff development and training in order to realize the financial and governance benefits of greater independence.

One last point. In many telcos Billing and Revenue Assurance (and hence BA) will report into a single person who in turn reports into the CxO level. This may undermine independence when it is most needed. But having RA/BA and Billing report into different CxOs can be unwieldy. A sensible compromise would be to require Internal Audit or Risk Management to annually review and report on the adequacy of work done in BA to provide some high-level independence.

Posted by Eric on August 2, 2007 12:30 PM | Permalink | Comments (0) | TrackBacks (0)

When you here people talk about possible futures for the telco Revenue Assurance industry, you tend to get one of a few answers:

1. It becomes a well-defined niche in the ever more sophisticated world telco BSS software. The job of people in telcos ends up being to run that software in the equivalent of a "Revenue Operations Centre".
2. It gets embedded, SOX-style, into corporate governance frameworks as a way for big business to both execute and demonstrate management control over its underlying data. The main output is a ticklist to show the auditors and ultimately the shareholders that everything works correctly.
3. The focus remains on generating quick win extra money for businesses, so demand for revenue assurance ebbs and flows with the perceived need.
4. It gets absorbed into business intelligence, with assurance being one of many by-products of having a complete view of all the company's data.
5. Other industries emulate the approach of telcos and do similar things, meaning that that there is transferability of revenue assurance skills and technology developed in telcos to new kinds of businesses. Alternatively, telcos themselves gradually adopt new business models outside of the traditional telco space and revenue assurance migrates into those areas at the same pace.

Any or all of these may be true, and I would not rule out any possible combination of the above. What I have often said is that there is no great future in a view of revenue assurance that remains fixated on the nuts and bolts of current telco systems and processes. Many may understand revenue assurance purely in terms of the detailed workings, but if you walked into a bank and tried to persuade them of the relevance of revenue assurance in terms of switch-to-bill CDR recs you would expect plenty of blank looks. Similarly, if telco business models change then revenue assurance will end up in a smaller and smaller niche unless its abstract framework of goals and techniques are applied more widely. It can be applied more widely. Much of what is tightly branded as "revenue assurance" in telcos already exists in other businesses: they just do not have a consistent name for it. Banks do the equivalent of revenue assurance, but they would not call it revenue assurance because it is so embedded into their way of working there is no need to recognize it as a separate discipline. Think of it this way: if your retail bank was as error-prone as telcos reportedly are, you would be carefully checking every line of your statement each month. Similarly, and more obviously, revenue assurance also exists in the utilities sector. Anyone who searches the news for revenue assurance cannot have missed that there is a publicly-listed British company called Revenue Assurance Services. It focuses on the utilities market, predominantly gas. Its remit is the abstract equivalent of revenue assurance in telcos. RAS offers outsourcing and consulting services in the key areas of debt management, meter readings, bill estimation, reconciliation of provisioning to billing, and bill verification. Some of this has a straight-forward analogy to telco revenue assurance. Recalculating bills to ensure the billing system logic and reference data is correct would be the same for either sector. Other activities have little or no analogy. Telcos do not need to worry about regularity or adequacy of customer site visits to read physical meters. However, one area sticks out as being common to telcos but often left outside of the scope of telco revenue assurance: debt management. I think this is because debt collection is not a challenge specific to telco systems and processes, and is an area where you can reasonably recruit experienced staff from other industries. Most (but not all) viewpoints on telco revenue assurance associate it with problems unique to telcos. On one level, this is an advantage. If those problems are unique and significant, then the scale of error may be large and go unnoticed for a long time because people lack the experience and conceptual models to identify the risk. A narrow focus will give the best results. On another level, this is a disadvantage. Setting the scope of revenue assurance according to a narrow view of existing telco systems, processes and issues makes it harder to transfer experience to other business models and increases the chance that the telco version of revenue assurance may become outmoded and redundant.

Newshounds must also have noticed that the aforementioned Revenue Assurance Services is being taken over by Spice, the AIM-listed support services company. Furthermore, Spice intends to move its listing from AIM to the main London market. The acquisition is confirmation of the perceived ongoing profitability of a business aimed at increasing returns, across a broad variety of technical and process areas, in the utilities sector. It is also a warning shot that the Revenue Assurance Services business model could be extended beyond utilities to other sectors. Whilst the first goal will be to grow sales to electricity suppliers, Spice's reach into telecoms, retail and banking must mean they will be looking at any opportunities to extend the revenue assurance formula further. Areas that are easy to outsource or which are relatively similar across sectors, like debt management or bill verification, will be easiest entry point for Spice to sell revenue assurance to new customers. If suppliers in the field of telco revenue assurance do not sufficiently expand their horizons, they may find that the new kids on the block are the guys and girls from Spice.

Posted by Eric on August 1, 2007 12:19 PM | Permalink | Comments (0) | TrackBacks (0)