Revenue Assurance

Impact Measurement
Catalyst
Making an Impact!

Dublin 2011
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 Business Challenge

How to measure and report the overall

business impact and benefits of
Revenue Assurance activities including:

Reactive

Preventive

Risk Reduction

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 Creating a Solution

Defining an agreed and unified impact

measurement model for all types of Revenue
Assurance activities

Leveraging the experience of a large team of
service providers and vendors for initial
development and validation

Proving the model in realistic scenarios

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 Participants

Champions:

British Telecom

China Unicom

China Telecom

MTS Allstream

Swisscom

Telefonica Group

Telefonica O2 Slovakia

Vendors:

cVidya

Ericsson

Huawei

Progress Software

Synaptitude Consulting

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 Solution Components

Reactive Revenue Assurance Impact Model

Proactive Revenue Assurance Impact Model

Revenue Assurance Risk Reduction Impact Model

Revenue Assurance Impact Unified View and

Management

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 Proactive Model

Evaluating the Revenue Assurance

Impact Measurement prior to deployment

Testing scenarios to measure the
business impact if the recommendations
of the Proactive RA group were not put in
place

Uses the basic framework of the
Reactive/Traditional RA model with few
adjustments

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 Demo Scenario 1 – VAS Refunds

A subscriber is requesting service from content provider via the CSP
network

CSP collects the payment from the subscriber and pass it to the
content provider, less its agreed revenue share.

Leakage point: The subscriber is not satisfied with the content, he calls
the CSP and get a refund, but the CSP does not deduct it from the
payments to the content providers

Proactive RA Controls:

Audit the refund system for content items, and verify the deduction
from the content provider payment

Reactive RA Masurement:

Audit/Analyze the specific content traffic at the control point, and
calculate the revenue loss amount of the content item till date.

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 Demo Scenario 2 – VAS Mischarge

An advertising provider sends advertising SMS to the subscribers
via the CSP network

The advertising SMS has no cost to the subscriber

The CSP fails to charge the advertising provider for the SMS traffic

Leakage Point: SMS traffic with no charge

Proactive RA:

Monitor the mediation system for all SMS traffic and assure the
advertising SMS with 0 charge to the subscribers, are charged
to the advertising provider

Reactive RA Measurement:

Audit/Analyze all the advertising SMS traffic (at control point-
mediation) and calculate the revenue loss amount of the SMS
Item till date.

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 Reactive Model
Revenue Loss during No Solution, temporary
Revenue Loss & Permanent Solution + Periodicity

Solution Cost
Revenue Recovered
Revenue Testing Cost
Loss

Overall Recovery Temporary

Solution Cost
Recovery Realized
Charges Revenue Permanent
Solution Cost

Net Earnings = Overall Recovery – Solution Cost

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 Proactive Model

Iterations Solution Cost

Subs
Launch cribers Testing Cost
Delay
Potential
Revenue Temporary
Loss Solution Cost

Periodicity ARPU
Permanent
Solution Cost
Maturity

Net Earnings = Potential Revenue Loss – Total Solution Cost

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 Preventive RA Impact Calculation Formula

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 Demo Scenario – VAS Mischarge

An Content provider sends Content/ commercial SMS to
the subscribers via the CSP network (e.g. news, Game
score etc)

The CSP fails to charge these commercial SMS to the
Subscriber for the traffic

These SMS has no cost to the subscriber

Content provider is collecting Revenue Share from the
Service Provider.

As a result of this Leakage, the service is not charged to the
end customer/Subscriber of the service provider. Now the
Service provider is settling an amount to the Content
provider but not getting any revenue out of the service for
the end customer or subscriber.

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 Demo Scenario – VAS Mischarge/cont

Detection: A financial review of the SMS product showed no revenues.

Leakage Point: Commercial SMS traffic with no charge for this content
provider service, as charging function was not detecting it due to
mismatch in configured parameter.

Reactive RA Financial Impact calculation:

Audit/Analyze all the SMS traffic with “0” Charge of this specific
service from the content provider( at Control point) and calculate the
revenue Loss amount of the SMS Item till date (Revenue Loss).
For solution/Correction , Modify the Charging function and deploy
in the production (Cost). Calculate the Revenue Earned by this RA
practice by using the Formula:

Revenue Loss = Revenue Loss during No Solution, temporary &
Permanent Solution

Net Earnings = Overall Recovery – Solution Cost

** Use the excel tool to demonstrate the calculation

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 Risk Reduction Model

The model includes:
1. An inventory of RA risks
2. An inventory Measures (aka controls) – taken from
GB941 E
3. A mapping from the inventory of Controls to the
inventory of risks. I.e., which controls mitigate which
risk, and what is the contribution of a control to the
reduction of the likelihood that the threat will
materialize, and to the reduction of the possible
impact of the threat if it materializes
4. A methodology to calculate the overall residual risk
reduction, at the level of the processes and LOBs

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 Risk Reduction Model/Cont.

Applying the model requires the following steps:
1. A risk assessment of all the RA risks included in the
model. The risk assessment should be done by
LOBs and Processes
2. Review of all the relevant existing
Controls/activities/measures – assessing their
quality, and mapping them to the existing inventory
of Controls in GB941-E
3. Following these two steps the model will
automatically calculate the amount of the residual
risk reduction, and will be able to recommend which
new controls can be added to maximize the risk
reduction.

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 Risk Measurement & Monetization

Activity based Monetary Value

Risk Value

ARPU Weightage

Number of identified Initial Risk Value

error cases (Activity based)

Maturity
Actual
Completion (%)
Time taken to
Identify & fix leakage

Monetary value arrived through issue identification and rectification

Total Risk during short term and permanent fix

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 Unified View and Management

Avoiding Loss Recovering Mitigating Loss

via Revenue via via Risk
Proactive Model Reactive Model Reduction Model

Measuring and Managing Total Business Impact for the CSP:

• Financial
• Customer Satisfaction
• Time to Market

 Unified view integrates, aggregates, enriches impact data

 Unified management allows click-through to underlying
business processes as well as drill-down to detail data
 Process simulation validates models and business processes

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 Benefits

Support Revenue Assurance to evolve beyond just

finding and correcting revenue leakages, to
becoming part of new product planning,
preventative activities, and risk reduction initiatives

Suggesting an agreed model and best practice that
measure and quantify the financial impact of all
Revenue Assurance activities

This model will enable communication service
providers to better prioritize and budget their
activities according to the associated financial
impact
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 Service Provider Quote

“Measuring and reporting the financial impact of

revenue assurance, including the value of
preventive and risk reduction activities, is a high
priority industry challenge. This Catalyst is setting
the ground for a framework of best practices and
an agreed upon industry standard.”

-- Loreen Edkins, Senior Enterprise Architect –
MTS Allstream

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 Service Provider Quote

“I am delighted to be part of the expert Team, which

is improving methods for the better performance of
CSP´s Revenue Management.”

-- Ivan Hlavanda, Revenue Assurance Manager
- Telefonica O2 Slovakia

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 TM Forum’s Outputs

Enhancement for the TM Forum’s Revenue

Assurance Solution Suite

Establish a basis for a benchmark study

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 Thank You!

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