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Revenue Assurance - The Intellectual Acuity
Revenue Assurance - The Intellectual Acuity
January, 2011
Sutapriya Das
1. Introduction ………………………………………………..Page 1
6. Conclusion……………………………………………….. Page 12
7. References……………………………………………….. Page 13
With an eye towards profitability, every business entity are focusing more on customer
experience initiative to differentiate themselves. And with this link between customer experience
and profitability Revenue Management along with Customer Lifecycle Management plays a
commendable role in the decision making approach both strategic and tactical in the present era.
This document is just an approach to understand the need of Revenue Assurance (RA) in
Telecom Industry, one among the many where, RA begun to play a decisive role and to have an
insight on the RA players in Global Telecom Market. RA is the fulfillment of the owner’s
expectation to justify all possible revenue that the owner is entitled. In today’s world there is a
common parlance called “COST SAVING” doing rounds in many organizations. But this works
upon to a certain extent to enhance the bottomline. There is always an ever-growing pressure to
recover from the reduction of margins resulted from the global and economic impact, and with it
Revenue Assurance gains the ground to plug the gaps that drains 3% - 14% of total revenue of
any Telecom Service Provider (TSP) annually.
According to KPMG Global Revenue Assurance Survey 2009, there exists a very thin
line between ‘leakages as an inherent risk’ and ‘leakages as a business challenge’. And
identification and recovery of such leakages is the delta between these two forms and stronger
the delta greater is the risk.
Thus RA reflects a holistic approach covering the complicity of all revenue streams prov
providing
full advantages of system and processes giving an overall view of any possible revenue leakage
and furthermore helps
ps not only detecting
detecting, but by preventing problems by fully supporting the
operational works. An effective RA program is a th
thorough
rough understanding of the nature of
revenue leakage. Basically there are 2 major categories of Revenue leakages – Systematic and
Pervasive.
Systematic leakage is an individual problem and impacts many customers for the
TSP.Following can be grouped under systematic leakage –
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i. Network element error
i. Not billing a customer who has been already provisioned for a service.
iii. Failure to charge a customer on Package Upgrade because the order did not post
to billing.
Thus with this in view the intent of an overall RA plan must be defined in four different
perspectives :
1. A dedicated and resourceful team with diverse skills to understand the aspects of telecom
revenue chain.
2. Automated and advanced RA and data analytics tools to efficiently capture and analyze
large volume of data
The following pictorial diagram provides a generic approach to plugging the leakages:
The implementation of a revenue assurance plan requires commitment from all levels of the
Organization and is a strategic effort which is difficult to implement and manage without
methodology and proper tools.
Learning Revenue
How much
Revenue are we Financial & Assurance
losing ?? Culture ??
Innovation
Revenue
Assuarance
The basic revenue and risk management framework for any TSP is as below:
The main areas that has been identified by Consultants which are generally Low Risk - High
Reward Areas are :
Thus a sound understanding of the planned strategy and operation is thereby required to have a
strong baseline established for design and implementation of a relevant Revenue Assurance
functions.
Thus in these environment with so many market and competitive forces to play the only telecom
strategy to be in the race is to realize the game has changed.TSP must now not only launch new
services quickly but also should have enormous operational capabilities to bill and provisions
them creatively and efficiently to move ahead. Hence it becomes crucial that revenue leaks,
fraud, customer management and interconnect billing problems don’t sink the business. In other
words there is a growing demand of Telecom revenue Assurance that monitor operational
systems for problems and keep the business steady.
Dittberner in his report named “Telecom Risk Management: The Market for Revenue Assurance,
Fraud, Credit, and Cost Management Solutions” has quoted that nearly 60% of the Revenue
Assurance Market is software (including customization, maintenance, and service bureau work)
and the remainder 40 % is consulting, everything from helping a carrier establish a revenue
assurance and fraud management organization to auditing operations and create effective
business processes.
Connectiva offers a range of enterprise revenue and risk management solutions built on open
standard based next generation analytics platform. Built on a “Configure and Not Code”
philosophy, the Connectiva technology framework and application suite offer unparalleled
functionality, flexibility and scalability to help service providers meet their business objectives.
Connectiva’s Products services two industry domains which includes UTILITIES & TELECOM.
Along with the Connectiva’s award winning ONEREViEWTM product it also provides
professional services tailored to match each customer’s unique requirements. From business
consulting to managed services to hosted solution the Company’s offering complement the
Revenue management solution suite and thereby help in delivering a complete package – a whole
product experience to the customers.
Some of the major Clients of Connectiva System includes Zain, Bharti , T Mobile, Idea, BSNL ,
Tunisiana, and many more. And this has been possible only because of their identification and
recovery of more than $500 Mn in revenue leakage. Aside with this domain expertise, award
winning product, end-to-end product and guaranteed ROI commitment, Connectiva is marching
ahead and is recognized as one of the Top 10 fast growing Telecom Software Company.
In today’s competitive market we see an increasing number of TSP realizing the need of
predictive business methods and turn them into operational reality. In telecom all processes such
as product management,marketing,collections,vendor management churn & customer
management etc are important to ensure a steady profitability and they use the same closely
correlated data sets. Thus the best way to address such an enhanced business scope is by
providing a single solution framework with the ability to control and prevent risk, measure
performance, and enable effective analysis in every aspect of the business. So any enterprise
driven step taken towards a multi faceted business assurance and optimization discipline coupled
with best practices of an external partner can yield better results and enable operators to gain the
acuity unlocking new profits.