Communications Industry Group

High Performance through

Revenue Assurance
An End-to-End Approach for Telecommunications Companies
By Roberto Pulice
In an uncertain economy, the last thing a company wants to do is
miss out on opportunities to reduce waste and costs and to maximize
revenue. But that’s precisely what many telecommunications companies
are doing when it comes to ensuring they are billing for and collecting
all the revenue they are due. Furthermore, meeting the revenue assurance
challenge is only getting more difficult. As carriers introduce advanced
data services and digital content, the number of trading partners
increases and, subsequently, so do the opportunities for revenue leakage.

Indeed, based on industry revenue
assurance benchmarks developed from a
global Accenture survey, we have found
that telecom operators, on average, lose
at least 1 percent of their revenue because
of three major shortcomings:
• Network and accounting inefficiencies
that result in underbilling and,
consequently, often prevent a telco from
collecting for services actually delivered
• Focus on metrics and incentive programs
that drive initial sales but fail to ensure
that orders translate into cash
• Lack of visibility into the customer-to-
cash cycle, which makes it difficult for
telcos to determine the full scope and
extent of the revenue leakage issue
Such shortcomings are not a mystery to
telcos. In fact, many telcos have attempted
to solve their revenue assurance problems
through various initiatives. Unfortunately,
in general, these initiatives tend to be
superficial and shortsighted and do not
address the underlying cash flow issues
that are at the root of the problem.
For instance, to stem revenue loss, telcos
often use a tactical revenue assurance
project, such as conducting a departmental
process review or installing an off-the-shelf
application. These approaches have limited increase revenue as much as possible.
impact because revenue leakage is rarely An appropriately designed and executed
concentrated in one specific area but, revenue assurance program can be a highly
rather, occurs across the organization and effective way to achieve those dual goals.
involves several functions. In other cases, a
In Accenture’s experience, such a program
telco fails to define its revenue assurance
can drive cost savings of between 2.5
goals appropriately, making them either
and 3.5 percent in little more than three to
too broad or too narrow to deliver
four months for a comparatively minor
substantive results. Accenture has seen
investment. But to generate such results,
many companies focus only on billing as
the program must address both the
the source of revenue leakage and ignore
business and technology sides of revenue
other areas where significant revenue
assurance issues—a perspective that is
can be lost—such as accounting, inter-
embodied by the approach Accenture takes
connection, roaming and network quality.
to address the revenue leakage problem.
Accenture’s ongoing High Performance
There are three factors critical to the
Business research has found that a
effectiveness of the Accenture approach.
building block of high performance is
The first factor is the creation of a formal
distinctive capabilities—a combination
revenue assurance department by defining
of unique processes and resources that
the department’s structure, strategy,
enable companies to out-execute the
processes and key performance indicators.
competition. A superior approach to
A formal revenue assurance department
revenue assurance is one example of such
enables a telco to take a disciplined and
distinctive capabilities that leading telcos
consistent rather than ad hoc approach
have adopted in their quest to become
to revenue assurance. The second factor is
high-performance businesses.
the use of a set of pre-packaged tools and
methods to select and repair for the long
Overcoming the obstacles term the process and system shortcomings
to revenue assurance that are causing revenue leakages. Such
In challenging times, telcos must move tools and methods help a telco to not only
swiftly to reduce their cost structures and deliver immediate results to its bottom line,
but also ensure the problems do not recur.
The third factor is the development and
implementation of the switch-to-bill
monitoring system and the associated
processes to support the ongoing review,
detection and repair of future issues that
could lead to revenue leakage and
bottom-line degradation.
Accenture revenue
assurance in action
While many telcos are still pursuing
initiatives that address only a small portion
of their revenue assurance issues—and
generally provide only temporary relief—
others are taking a more comprehensive
and proactive view of their operations to
minimize the instances of revenue leakage
and its impact on their bottom lines.
These telcos have adopted the Accenture
approach to revenue assurance and have
generated sustainable, positive business
results quickly.
One example is VimpelCom. Operating
under the “Beeline” brand, VimpelCom is a
leading Russian mobile carrier with more
than 58 million subscribers in Russia and
surrounding countries. VimpelCom teamed
with Accenture to implement a revenue
assurance program to properly account for
all revenue in the order-to-cash process.
As part of the project, the VimpelCom and
Accenture team established a revenue
assurance function to manage all revenue
leakage cases from end to end. The results
of the initiative have been significant.
VimpelCom identified and recovered more
than 3 percent of service revenue in 18
months after the rollout of the switch-to-
bill monitoring system. Because the new
revenue assurance function covers the
entire switch-to-bill chain, VimpelCom has
a much clearer picture of its main revenue
streams and where loss can occur. The
carrier processes more than 1 billion call
detail records (CDRs) and data transactions
per day with a reconciliation accuracy of
99.8 percent. Perhaps most impressive is
that VimpelCom realized twice the payback
than anticipated on its investment even
before the project’s completion.
High performance through
revenue assurance
Accenture research shows that high-
performance businesses proactively use
a downturn to improve their competitive
position—prudently cutting the right costs
while making the kinds of investments
required to prevent short-term urgency
from putting the company at risk in terms
of medium-term competitiveness and
long-term profitability. VimpelCom’s
experience illustrates the substantial
business benefits that can be derived
through a formal comprehensive revenue
assurance program such as the one
supported by Accenture’s approach. More
than ever, to excel in the present economy,
telcos must be able to effectively identify
and eliminate sources of revenue leakage
that can have a serious impact on the
bottom line. Doing so requires tight
integration between a company’s billing
and financial settlement systems, as well
as the ability to accurately and reliably
recognize revenue. It also requires active
measurement and management of credit
and cash flow and automatic monitoring
of adherence to contracts.
By investing in a sound approach to
revenue assurance that can generate
benefits in a matter of months, telcos
can develop a distinctive capability that
can help them address the pressure to
control costs and conserve cash in today’s
uncertain economic climate, as well as
position themselves for high performance
over the long term.
Copyright © 2009 Accenture.
All rights reserved.
Accenture, its logo, and
High Performance Delivered
are trademarks of Accenture.
About the Author
Roberto Pulice is a senior manager
responsible for the Revenue Assurance
offering within the Accenture Billing
group of Accenture’s Communications
& High Tech operating group. For
more information, please contact
roberto.pulice@accenture.com, or
please visit us at www.accenture.com/
billing.
About Accenture
Accenture is a global management
consulting, technology services and
outsourcing company. Combining
unparalleled experience, comprehen-
sive capabilities across all industries
and business functions, and extensive
research on the world’s most success-
ful companies, Accenture collaborates
with clients to help them become
high-performance businesses and
governments. With more than 186,000
people serving clients in over 120
countries, the company generated net
revenues of US$23.39 billion for the
fiscal year ended Aug. 31, 2008. Its
home page is www.accenture.com.