Eric

Eric Priezkalns is a founder of talkRA. He is a widely recognized expert on risk management and business assurance for communications providers. After a successful full-time career, Eric now splits his time between occasional consulting projects for trusted customers, and his many other passions. Eric was Director of Risk Management for Qatar Telecom and has worked with Cable & Wireless Group, T-Mobile UK, BSkyB, Worldcom UK, and Nawras, as well as advising various software developers and system integrators.

Eric is a qualified chartered accountant; he trained whilst employed by the Enterprise Risk Services division in Deloitte's London office. His Masters in Information Systems was earned with distinction, and he holds a first-class degree in Mathematics and Philosophy.

In 2006, Eric was already a popular speaker at conferences, but he decided to reach out to a broader audience with the first blog dedicated to revenue assurance. Many have since copied him, but none have matched his output.

Eric was the first leader of the the TM Forum's Enterprise Risk Management team, a founding member of the TM Forum’s Revenue Assurance team, and he developed the original Revenue Assurance Maturity Model. In the UK, Eric is known for his critique of billing accuracy regulations. In Qatar, Eric was a founding member of the National Committee for Internet Safety. Eric currently serves on the committee of the Revenue Assurance Group, and he is an editorial advisor to Black Swan.

Would you invest in a business that loses money? Probably not. Or, at least, you are more likely to invest in a business that makes money. That is why investors read the numbers reported in the press, and rely on auditors to check financial statements. What if you already own the business, and were considering investment in some new machinery? Again, you might buy the machinery if you thought it would generate profits, but not if the cost outweighs the returns. That is why accountants go to a lot of trouble to map costs to assets, and hence determine which assets are driving profits, and which are not worth keeping. So would you make a major investment decision, knowing you will be ignorant of the returns generated by the investment? That is exactly how most telcos are run, according to a new report from the TM Forum. Net global capex network investment is estimated to have cost USD354bn in 2014. In response, the TMF’s Network Asset Management team conducted a survey into how telcos track and manage their network assets and the returns they generate. The findings make for grim reading, including the fact that 57% of surveyed telcos had no data on whether existing assets were generating a positive return or not.

I found the survey results to be confusing in some respects. For example, 29% of telcos stated they do not bother to measure any returns generated by assets, after they have been deployed. But what are the other 71% measuring, if more than half of telcos have no data to determine if an asset is underperforming? Perhaps they are measuring returns across a class or category of assets, which may be some help but still fails to provide sufficient detail to improve future investment decisions.

The conclusions about data integrity were equally grim. On average, respondents believed their network inventory records and fixed asset registers were only 74% accurate. Their expectations were also low, believing that accuracy levels below 90% would still be ‘acceptable’.

Reading between the lines, I draw my own conclusions from the messages about poor data quality and scrappy methods for measuring returns. Determining the profitability of a network asset would involve a lot of hard work, so mostly we do not bother. This is understandable from the perspective of the poor schmo who is asked by his unreasonable boss to generate numbers without receiving the data, tools, and thanks that such a task demands. But from a collective, corporate perspective, this blind spot in decision-making is nothing less than insanity. How many of you have worked in a telco where the stationery cupboard was locked to prevent people using too many staples, or where your phone calls were scrutinized to determine they were all made for genuine business reasons? These things are controlled because they are easy to control, but the values involved are trivial. In contrast, the amounts spent on network capex are enormous, but hardly anyone can say where the money was best spent, or where the telco failed to generate the results it hoped for. If we do not gather the knowledge, we cannot learn from the past. In the case of network asset expenditure, that means we are doomed to repeat our most expensive mistakes.

Bookmark and Share

It is funny how governments get really keen to protect their people, when this coincides with threats to the amount of tax they collect. Ghana’s Communications Minister, Dr. Edward Boamah, has promised a crackdown on simbox fraud; you can read the story at GhanaWeb. Boamah said he was keen to screw more tax money out of people making phone calls… ahem, I mean he promised to keep the cost of international calls artificially high because it is a great way to make money… ahem, I mean he was deeply concerned that…

People are losing businesses because when you receive a call it appears [with a] Ghana number… sometimes you think it is somebody calling you to ask for [a] favour so you don’t even pick, so you miss an important call.

Yeah, right. Who would doubt that missed calls caused by inaccurate CLIs is a top priority for Ghana’s government?

Bookmark and Share

Some events are so memorable that people will always recall where they were, when they experienced them. I will never forget where I watched Germany’s 7-1 World Cup semi-final victory over Brazil. It was in a seafood restaurant in Portugal, accompanied by Tony Poulos, international telecoms personality extraordinaire, and Sérgio Silvestre, WeDo’s Chief Marketing Officer. We had spent the day at WeDo’s Braga office, discussing their product suite and development plans. At the end of our work, I commented that the semi-final was that night, so it would be good to eat somewhere with a TV. That evening, as the goals flew in, our jaws dropped, and I found myself applauding the Germans along with the other diners. Whilst the screen was filled by the shocked faces of Brazilian fans, my sympathies were mostly with Brazil’s goalkeeper, Júlio César. He had been a hero in earlier games, blocking penalties and keeping his team alive. But he was overwhelmed by the German tide. It was oddly appropriate to watch that game in the company of two of the best advocates for business assurance. That is because business assurance is to telecoms what the goalkeeper is to football.

In football, the goalkeeper is the last line of defence. When everything else has failed, he is tasked to make the save. And when the ball finds the back of the net, it is easy to blame the goalkeeper, saying he has not done his job. But when the ball finds the back of the net seven times, it becomes clear that the goalkeeper is only one player in the team. He can influence the result, but is not responsible for it. The same is true for business assurance, and leads to the greatest mistakes when setting targets for a revenue assurance or fraud management function, and the worst foolishness when measuring their performance. Was Júlio César responsible for Brazil’s defeat? No. A different goalkeeper might have made another one or two saves, but the Germans had so many chances they would still have won. So why measure a business assurance department according to how much the telco leaks, or by how much the department saves? When it comes to leakage, we are measuring the performance of the whole business, not of one section. And the business will most reliably win if it has a strategy to prevent leaks occurring, not by depending on an incredible goalkeeper and expecting him to make a series of miracle saves.

Even the worst goalkeeper will make saves, if his team allows enough shots on goal. At the same time, no goalkeeper is good enough to save every shot. So the best defensive policy is to not allow the opposition any opportunity to shoot. By the same token, the best policy in telecoms is to prevent the mistakes that lead to leakages. However, this requires something more than a goalkeeper. It demands a strategy for how to defend, and for the whole team to play their part in executing that strategy.

A goalkeeper is expected to react to whatever comes his way, whichever direction it comes from. I have often said that assurance is the goalkeeper of telcos, and the metaphor reflects the realities of how most telcos approach assurance. However, the problem with the analogy is that it emphasizes the passive aspects of assurance. It suggests that business assurance is there to make saves at the last moment, by leaping this way and that, without having any plan or design. Goalkeepers respond to events on the field of play. As the Brazilian team showed against Germany, energy and passion are not substitutes for organization. Brazilian players ran around without discipline. They had no sense of what their defensive responsibilities were, or how to work together to impede the Germans and win the ball back. The German team, in contrast, showed how effective a team can be when everybody understands what they are meant to do, and how they will work towards their common goal. Good defence requires more than the individual brilliance of the goalkeeper or the desire of outfield players to make as many tackles as possible. Defence requires leadership. The same is true for business assurance.

Goalkeepers can be leaders on the field of play. A good goalkeeper will talk to his teammates, telling them what they should be doing. If he needs to rapidly bark instructions to a fellow player, it is understandable that he may sometimes be loud and abrasive, and might temporarily upset his colleague. But that is better than having a goalkeeper who is too timid, and who leaves the outfield player unaware of the risks around him, leading to a goal being conceded. Assurance functions need to be respected, when they give directions to others. If nobody else can see the gaps in the defensive line, it is vital that business assurance speaks up, and is heard. Sometimes it needs to shout. Being in a unique position thanks to the data they receive, business assurance must tell others what they see, and how this should be translated into definitive steps that will improve the company’s defences.

Whilst goalkeepers give instruction during a game, even this form of proactive intervention is not enough to organize a reliable defence. Before the game begins, each player needs to know their defensive duties. The coach must have an effective strategy, and he must be able to communicate it to his players using language that they understand. And after the strategy is communicated, it will need to be reinforced through training. It is not enough to speak to people in abstract and theoretical terms. Asking people to be good is pointless, if they do not know how to be good. You have to show people what you want them to do. That involves making them deal with specific scenarios during their training. It also means their real-life performance should be analysed and critiqued. This is also true of telcos, where we understand that the role of the coaching team is fulfilled by the telco’s executives.

Whilst the head coach is responsible for all aspects of attack and defence, there may be other coaches with more specific focus on aspects of defence, and on how the goalkeeper plays. At the same time, the coaches should be harmonious, and work from a common understanding of how the team will play. Neither the attacking nor defending strategies will succeed, if they contradict each other. So if an executive team fails to devise a defensive strategy, or if they make demands which are contradictory, then the goalkeeper cannot be responsible for the losses that will inevitably follow. This is true even though the goalkeeper is the one who recovers the ball from the back of the net, and hence becomes the easiest person to blame.

Continuing our metaphor, business assurance increasingly needs to step up to a coaching role. Diving around and making flashy saves is not a long-term strategy for the success of the individual, or of the team. We also need to advise on the company’s strategy, as well as its tactics and operations. That is the only way to properly identify and address the defensive risks that are the root cause of leakages.

The strategic voice of assurance will never be the loudest one in the corporate team. The head coach – the CEO – needs to listen to many voices, and to determine the balance between attack and defence. The CEO needs to find ways to win games, in addition to avoiding defeat, and that will always mean taking risks in order to win new revenues, as well as taking sensible precautions to secure existing revenues. When listening to many voices, the CEO cannot avoid being influenced by the quality of the advice he receives from different quarters. If an attacking coach gives very good advice, and a defensive coach gives mediocre advice, then it is right that the attacking coach should have more influence over the team’s overall strategy.

Business assurance often has a uniquely advantageous view of how the whole team is performing. The data collected should be turned to strategic advantage, not just used to identify and fix operational faults. Like a goalkeeper, we see things that others might not. But it is not enough to have good information; we must also give good advice. That means synthesizing the information we have into realistic proposals for improving the teams’s defensive strategy, whilst understanding these improvements should not compromise the other objectives of the team. If we do that, we deserve to be coaches, and will need to make fewer saves. Otherwise, we will only influence results whilst standing between the posts, during those moments when we are the last line of defence.

By using the analogy of a football goalkeeper, I hope I have communicated some complicated points using a language that is easy to understand. In that respect, I am also trying to be a coach. Coaches succeed if players intuitively comprehend what they have been asked to do. The coach should choose his words to best suit the language understood by his players; the coach should not expect the players to learn difficult terminology or strange ideas just because that is how the coach likes to talk. The history of business assurance shows we can be very good at coaching. The word ‘leakage’ is a great example of how we have used intuitive language to express complicated ideas, and hence to successfully influence how others think and behave.

Business assurance has grown from nothing to a mainstay in telcos worldwide. The phrase ‘business assurance’ shows we are expanding well beyond the founding scope of revenue assurance and fraud management. At the same time, we can do more. If we do not keep pressing forward, we will become increasingly irrelevant, and deserve to be relegated to obscurity. It is not enough to complain that others do not understand, or that execs spend too much time talking to their marketing people. If we use the information we have, and speak to people in a language they are comfortable with, we will persuade.

We are more than a safe pair of hands, fit only to dive around and catch the ball. We also have brains, and voices, and we can help the business to organize itself and adopt winning strategies. Any CEO can imagine himself the coach of the Brazilian football team, and being in a situation where scoring a goal is meaningless, because his team is already seven goals behind. They understand that attack will not bring victories, if there is inadequate defence. But they may never have received good advice, that quantifies some of the risks faced by the business, and offers pragmatic solutions to its worst defensive frailties. We can help them. If we are good coaches, we not only succeed as goalkeepers. We will succeed as goalkeepers because we will need to make fewer saves, but we will also become more important to the whole team.

Bookmark and Share

In September I asked for opinions about changing the content of talkRA. Some of the responses reminded me of things people have been telling me for ages, both offline and online…

  • What happened to the lunchtime teasers?
  • Those quizzes were fun. Do more.
  • I liked doing the LTT, are you going to run more?
  • When will the L.T.T. return?
  • Do more of those puzzles you used to have.

There is no doubt about it: Lee Scargall’s L.T.T. developed a devoted following. Despite being incredibly busy with overseeing risk for the whole of the Ooredoo Group, Lee has bowed to popular demand, and made time to write a new question. Tune in Monday, quiz fans!

Bookmark and Share

Are some mobile operators pushing their luck, when they ask victims to pay huge bills after criminals steal their phone? That is the conclusion of Richard Colbey, a British lawyer who recently took up the case of Osian Rhys Edwards, a schoolteacher who fell victim to the criminal gangs that target tourists in Barcelona. You can read the full story in The Guardian.

Vodafone barred the stolen handset after GBP15k (USD23k) of premium rate calls were racked up, within just hours of the theft. Rhys Edwards claimed he informed Vodafone of the crime but the operator said it had no record of his call. Instead, Vodafone pursued payment in full, and then offered to reduce the bill to GBP10,500 (USD16,440) whilst allowing Rhys Edwards to pay it off over many years. Vodafone also threatened to damage his credit rating. But given that Barcelona is known to be afflicted by this criminal scam, does it seem reasonable to allow such heavy premium rate use, before the telco intervenes?

Vodafone’s behaviour so outraged Colbey that he agreed to represent Rhys Edwards for free. His comments on Vodafone’s legal position are worth reviewing.

Vodafone’s position looked legally flawed for several reasons…

What I thought particularly outrageous was that Vodafone was threatening to report Osian to a credit reference agency without first getting a court judgment. The power large organisations have to do this gives them an unfair advantage in any dispute with consumers…

I set out Osian’s case in a forcefully expressed letter to Vodafone’s “General Counsel” (a US term for chief lawyer), demanding, somewhat unrealistically, a complete capitulation and compensation for the stress within 24 hours… We huffed and puffed in emails as litigation lawyers do, and within a few days had reached agreement that Osian would pay nothing for calls after his phone was stolen, but wouldn’t actually get any compensation. I expect a judge would have reached the same conclusion…

To its credit, and slightly to my surprise, Vodafone did not insist the settlement was subject to a confidentiality agreement. I hope that this will encourage others faced with similar claims by phone companies to stand their ground.

The issue has trundled on for a decade and no company has yet wanted to test its position in court. This is almost certainly because the companies are getting legal advice largely in line with my own view that they could not win, and they would have no choice but to change their policies once a precedent was established.

Bookmark and Share