The news is everywhere, but in case you missed it over Christmas, the TM Forum has launched its benchmark study for revenue assurance maturity in Communications Providers. The maturity questionnaire takes less than 90 minutes to complete, and the benchmark study is open to members and non-members of the TMF. If you are interested in participating and comparing your RA maturity with telcos from around the world, you can mail me at maturity@revenueprotect.com and I will be glad to help.

Telenor was amongst the first to join the maturity benchmark, and will be submitting results taken from across the Telenor group. In December, I talked with Einar Nymoen of Telenor about their RA program and why they joined the maturity benchmark. You can find the interview here.

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It turns out that cVidya’s CEO, Alon Aginsky, is listed as a ‘partner’ of business angels group AfterDox. The group’s intriguing name reflects the fact that the investors are all former Amdocs executives. You can see Alon’s AfterDox listing here.

It is no surprise that Amdocs executives can afford to put their feet up and start a new hobby by providing seed capital for new businesses. Amdocs always makes plenty from good old telcos. But can Alon have made so much money from cVidya, and can he have enough spare time, to afford to copy his friends from Amdocs? cVidya, unlike many of its revenue assurance competitors, still relies on VC funding. Now is not a good time for any backers of a small software company like cVidya to look for an exit. Sticking with the investment can be tough too - rumours are that cVidya have recently had some staff cutbacks. So in difficult times like this, you have to wonder what advice Alon gives to those businesses he works with. Perhaps, if he really is an angel, he should share it with all of us. From the looks of several companies in the RA sector, there will be plenty of people willing to listen…

Last month I told you about a great article which explains some of the elements of the Telenor Revenue Assurance Program (TRAP). Telenor is an international telecoms group, with a controlling or minority stake in various affiliated national operations across both Europe and Asia. Recently I asked Einar Nymoen, Project Director at Telenor Global and the man who overseas TRAP, to tell me more about how Telenor Group tackles revenue assurance. Einar very kindly shared his insights and experience with me.

Eric: To begin with Einar, can you tell us a little bit about the history of the TRAP program, and its purpose?

Einar: We need to go back five years. We started in 2003 with what we call the Telenor Revenue Assurance Program, or TRAP. The idea in the beginning was to implement a common method for control development. We travelled around and ran what we called ‘implementation projects’ in the affiliates of Telenor. We had two aims with these projects. One was to set up RA organizations in the affiliates if they did not have one beforehand, and also to set up the first set of controls covering a specific focus area. After a while we gradually changed the focus from setting up new RA organizations to establishing the TRAP network, doing performance monitoring and such activities.

Eric: You wrote this article that was included in the TM Forum’s Revenue Management newsletter. It mentioned the fact you used some of the thinking that came from the TM Forum. Could you please explain a little about why you used the TM Forum’s work as part of your TRAP program?

Einar: We need to relate what we are doing to what is happening in the industry. I find the TM Forum very good as a frame of reference. More concretely, with the maturity model we wanted to benchmark ourselves against the industry. So in addition to is using the benchmark internally, we are going to join the TMF study.

Eric: Did you look at alternative sources for benchmarking and guidance?

Einar: We have been discussing benchmarking for quite some time. We followed the benchmarking activities in the TMF with the operational benchmarks. We decided we will not use those on the group level, but instead focus more on strategic KPIs. As I wrote in my article we combine the maturity matrix with what we call the Coverage KPI, which is the first one we implemented. The idea with the Coverage KPI is to measure what degree we have control over the value chain. This fits very well with the concept of the maturity model.

Eric: Do you apply the Coverage KPI and the maturity measurement across all the Telenor affiliates, or is it a voluntary activity where some may be in, and some may be out?

(more…)

From time to time I get asked what the purpose of talkRA is. It can be hard to explain. All of the authors want to improve the discipline of revenue assurance, revenue management, business intelligence and fraud management, but that takes more than what we are trying to do on this site. We are not trying to compete with the many organizations already working to improve those fields. In a democracy, one way to promote change and improvement is to form an association of like-minded people with a common agenda. We are not trying to be a group of like-minded people; we embrace and encourage the communication of different points of view, even if we personally disagree with them. Another important element of an effective democracy is the freedom to express a point of view, and have it heard by others. That is how we are trying to help. If everybody shouts at once, then nobody gets heard, so we are offering a limited group of people the opportunity to get their views heard by everyone working in the field, all around the world. To help explain the purpose of talkRA, I have put together a mission statement, which you can read here. If you want to make an observation about the mission statement, I suggest you comment on this post. However, I will warn you of one thing: talkRA’s mission is to encourage debate, and that part of its mission is not open to debate… ;)

I was struck by the following passage when reading about the new strategic plans that ex-BT CEO Ben Verwaayen had unveiled for Alcatel-Lucent:

Alcatel-Lucent’s plan is to combine the trusted capabilities of the network environment with the creative communications services of the web (Web 2.0, Web 3.0 and beyond). This transformation will allow billions of customers to use millions of websites from any device guaranteeing security, quality, privacy and billing integrity. The overall service experience for end-users – consumers and businesses – will be improved and greater value will be created for every player in the industry.

What struck me about this passage was that it is pure fantasy. Those of you who are as equally pedantic as me (or who just read the title of the post) will have noticed the offending word. A guarantee is not just a promise, as we all know promises get broken (with astonishing regularity when it comes to the big business of electronic communications). A guarantee implies somebody will pay out when the promise is broken. But who is going to pay out on this implied ‘guarantee’ of security, quality, privacy, and billing integrity? I can tell you who it will not be. It will not be Alcatel-Lucent. Buying Alcatel-Lucent’s stuff makes them no more responsible for how it gets used than Boeing would guarantee their planes as crash-proof no matter what the pilot does, no matter how their plane is maintained, and no matter what weather the plane is flown in. So Alcatel-Lucent is not giving any guarantees. Who is then? Is it the operators? Nope. As a customer, I knew Ben Verwaayen’s BT was no more inclined to give guarantees of this type than any of their competitors, and they will not be doing so in future. Operators are right not to make guarantees in such circumstances. First, operators have the mirror problem of suppliers like Alcatel-Lucent: they may be decent pilots, but ultimately cannot be held responsible for every detail in the engineering they rely upon. Second, people are people, and they make mistakes for all sorts of reasons. Until telcos can do away with people completely (the headcount reduction at places like BT still has a long way to go before they achieve that goal) they will make mistakes. The only sure-fire way to reduce error is to make things simpler. The last time I checked, the new services offered through web 2.0, 3.0 and beyond(!) might sometimes make things simpler for the customer, but not for anyone else. Whilst operators will keep on making - and breaking - promises, they will never give a guarantee (unless they just use the word as marketing-speak for promising something but not really expecting anyone to be upset when the promise is broken).

In future, will there be a guarantee that customers will get security, quality, privacy and billing integrity? Of course not. The day that you show me a telco willing to make that guarantee - a genuine guarantee that would be backed with a financial payout every time they failed to keep their promise - is the day I will show you their newest customer. It will also be the day when I can show you a risk manager who is either extremely nervous or extremely well paid. People have been making wild claims that new engineering and technology would solve all problems ever since man invented the wheel. The wilder the claim, the worse the comeuppance. The fate of the ‘unsinkable’ Titanic is a good example. If people are part of the process, failures are inevitable. And that is something I can guarantee ;)

The top team of Indian revenue assurance vendor Subex has been doing the public relations rounds recently. CEO Subash Menon gave an upbeat, but not very informative, interview to Indian newspaper The Hindu. What Menon says is less interesting than what he does not say. For example, he emphasizes strong revenue growth. However, after last year’s poor financial results, the priority for the company was identified to be a significant improvement in profitability, with only a modest revenue target. Indicating that the company will be ‘back in the black’ is a long way short of promising that original profit forecasts will be realized. There has to be a suspicion that Subex’s strong revenue growth is being bought at the expense of thin margins. You can read the interview here.

Meanwhile Subex CTO Mark Nicholson and Subex’s customer Verizon are all over this article about revenue assurance. There is nothing particularly new in the article, but once again we hear about Subex’s branding concept of the Revenue Operations Centre (ROC) as if it were the be-all and end-all of revenue assurance. A deeper insight would have highlighted the conflicts between the different visions for revenue assurance that are suggested elsewhere in the article. For example, the ROC is essentially the idea of revenue-assurance-as-monitoring, with people employed to sit at desks each day and respond to alarms when things go wrong. This does not fit particularly well with ideas that revenue assurance should be branching out into the analysis of product profitability. Assumptions and decisions about pricing points and margins may need to get reviewed from time to time, but not on a day-to-day basis, and not by the kinds of people who would work in a ROC. Even if such reviews do highlight problems, you would not respond to them in the same routine way that you might respond to an error in transaction data. Might the ROC, with its emphasis on routine data crunching, end up becoming a straitjacket that prevents Subex diversifying into more intelligent areas of business performance enhancement?

I should send out reminders in advance, because, in all probability, you have forgotten to celebrate International Revenue Assurance Day (December 2nd). You might argue that there is no such thing as International Revenue Assurance Day, especially as it was the result of a unilateral decision I made two years ago. However, I can honestly say I have received no objections to that unilateral decision. In some quarters that would be interpreted as unanimous and unequivocal support ;)

I will not bore you with by detailing all the celebrations I personally have planned for today. It is sufficient to note that, as every year goes by, I feel that our fledgling black art of revenue assurance has grown up a little, and that is something worth celebrating. One day I hope to see our baby all grown, having turned from the exciting-new-buzzword-on-the-block into the mature, sober, sensible (and possibly boring) science it has the potential to be. Part of the reason I blog is to keep a record of its growth. Think of the blog posts as the metaphorical equivalent of a scrapbook - a record of events for a discipline that sometimes lacks a memory. This time last year I gave a summary of events in revenue assurance over the previous year. Today seems like a good day to say “happy RA!” and review what happened over the last twelve months…

December 2007
Gartner moves revenue assurance from ‘hype’ to ‘hot’ on their carrier hype cycles.

Subex rebrands, dropping Azure from its name and launching a data integrity service.

January 2008
Poor financial controls are cited as one of the reasons for the collapse of US firm InPhonic.

Data integrity issues cause trouble for UK telcos Virgin and Carphone Warehouse.

In the branding wars, WeDo’s rebranding exercise is a modest affair. Meanwhile, Subex runs adverts on television.

February
cVidya launches a new product to verify dealer commissions. About the same time, cVidya’s Chief Scientist, Gadi Solotorevsky, launches his own blog.

March
TMNG tries to broaden the appeal of revenue assurance outside of telecoms.

Papa Rob appoints his son as new membership czar for GRAPA. Meanwhile, an investigation into GRAPA membership numbers reveals that claims about membership activity are grossly exaggerated.

April
ECtel buys all the assets of Compwise in a US$1.3M deal.

UPC Ireland wins an award from ACL for the way they adapted ACL’s product to meet their revenue assurance needs.

Pakistan’s telecoms regulator reports that grey traffic costs Pakistan US$47M annually.

May
Razorsight is caught stealing the intellectual property of rivals TEOCO. The court case is settled with an order that Razorsight pay US$4.5M in compensation.

Subex announces big losses in their year end accounts. CEO Subash Menon describes it as “a disastrous year”.

The TM Forum finally approves the new Revenue Assurance Maturity Model.

June
The ceremony for the World Billing Awards is held in Amsterdam. Hugh Roberts presents the Award for Best RA Project to cVidya’s Eli Krakauer.

Employees of RA vendor ATS win an award from AT&T.

July
cVidya and BT’s Geoff Hammond prominently launch the World Revenue Assurance Forum. I blog about the legitimacy of some of the claims made, including that it is “by the operators, for the operators”. Without explanation, the World Revenue Assurance Forum disappears as suddenly and as unexpectedly as it appeared. BT will later boot me out over the incident.

August
talkRA is launched! Experts from all across the RA industry join talkRA’s team of authors, whilst my blog is migrated from its old home at revenueprotect.com. At almost the same time Morisso Taieb of Bezeq forms a new RA group on LinkedIn.

Telstra’s CEO praises the success the success of their platform migration and highlights the consistent RA metrics in the year end results call with stock analysts.

September
Connectiva secure another US$17M of VC funding.

Reliance Communications refer to enhancements of revenue assurance and fraud systems in their annual report.

October
TEOCO uses the money received from Razorsight’s settlement and buys LCR software vendor Vero.

ECtel launches its social network. The Integrated Revenue Management Alliance (IRMA) is a two-tier community, with some sections open to the public and others restricted to ECtel customers only.

Subex’s half-yearly results show a degree of turnaround, but include heavy exceptional losses.

November
GRAPA announces the launch of its professional certification program, and a membership vote on its standards.

Following the announcement of their Q3 figures, ECtel reduces its revenue guidance for the year.

That was a busy year for revenue assurance, with a real mix of good news and bad news. I am hoping, and expecting, that the next 12 months will be just as eventful.

One difficulty with revenue assurance is the preponderance of metaphors that people use when talking about it. These metaphors may help with explaining the purpose of revenue assurance, especially in the absence of good public data to prove the point. However, all metaphors have their limits, and they can also lead to misunderstanding. Take the metaphor of a ‘leak’ for example. Water goes in one end of a pipe, and comes out the other end. Not as much comes out the other end, because some is lost through leaks. Okay, but does this explain leaks caused by errors in rating? If water pipes could have rating errors, you might end up with more water coming out than went in…

Despite this, I am as guilty as anyone of using metaphors. In case you do not believe me, let me introduce you to one of my favourites. J.F. Kennedy said:

The time to repair the roof is when the sun is shining.

If that is true, than an economic downturn should be worst for any telcos that have not already invested in revenue assurance, and less of a trouble to those that have. But I expect most vendors will be thinking the other way around… ‘look the roof is leaking! and it’s pouring with rain! better pay someone to get up there and fix it now!’ I think the problem with JFK’s metaphor is pretty apparent. Any time is a good time to fix the roof. When the rain comes pouring in through your roof, fixing it will be harder, but that does not mean you can afford to sit and wait until the sun is shining again.

That is one way to interpret the metaphor. On that reading, vendors would be roof-menders, and if a telco has not mended their roof already, they had better get a vendor and do it now. But there is another way to apply this metaphor to revenue assurance. Now, I do not know about you, but if I paid someone to fix a roof, I would not expect that the roof still needed fixing on a daily basis forever more. If it did, I would probably argue that the roof had not been fixed properly to begin with. If the roof was fixed, there would be no leaks. I could sit snug and warm and dry, and not worry about it. I would not be walking around my house, looking up at the ceiling, and saying “where is the next leak going to come from?” I would not look up, find a leak, put a pan underneath to collect the drops, and start commenting to my family: “look at all this water we have collected - what a victory for our anti-leakage program!” In short, if you fix the roof properly, the job is at an end, and you can stop worrying. There is no ongoing benefit, because there are no more leaks. You would not employ a team of people to keep looking up at the roof, ready to raise the alarm and run with a pan to recover the rainwater.

If we stick to this second way of interpreting the phrase, what would fixing the roof mean? It would mean building (or re-building) the roof so nothing went wrong. It does not mean waiting to see if something goes wrong, but spending a lot of time and money trying to deal with the consequences. A leak is, purely and simply, a mistake. Fixing the roof thus means having a business which does not make mistakes. Its decision-making processes are lined up correctly, just like the tiles on a roof should be lined up correctly. Each decision fits the needs of the business. Whether a big decision (how should we price this new product?), or a small decision (where does the decimal point go in this new rate to be implemented?), the right decision is made. People take care to avoid mistakes, just like the roofer is careful to ensure the roof will not leak. Because individual people may not be reliable, you ensure the way they work is designed to avoid mistakes. That is what fixing the roof means to me - but it has nothing to do with what the vendors sell.

This week I read a news story about how obese people wasted a lot of money on products that misleadingly promise to help them lose weight, but which do no such thing. That got me thinking. There is a simple reason why the pharmaceutical industry is always looking for drugs to solve every problem that a person can have. Drugs can obviously be monetized. Whether the patient pays, or their insurance pays, or a taxpayer pays, then somebody pays for every single pill. In contrast, prevention is not easily monetized. It is harder to make money from telling people to take some exercise, eat well, and take care of their body. It is easier to make money by waiting until people get sick and then stuffing them full of drugs. On the flip side, insurance firms and healthcare services recognize that they will spend a lot less money if people try to be healthy, and spend a lot more money if they do nothing about it. It is worth remembering that big tobacco in the US was eventually forced to admit the consequences of smoking because individual states had pursued them with huge bills for healthcare costs.

Here comes another one of my favourite metaphors, and this one is especially for the revenue assurance industry. Health is wealth, and plugs are drugs. A healthy business is a wealthy business, because the fundamentals of operations are sound. Mistakes are not made, so money is not lost. The job of revenue assurance in these companies is to promote health, by promoting prevention as superior to cure. On the other hand, plugs are drugs. Leaks are a symptom, so plugging them gives instant relief. A business that spends all its effort plugging leaks is a business addicted to the drug of fixing a problem, but may do so at the expense of not addressing the underlying causes. The business is sick, but deals with the symptoms of illness, instead of becoming well. The drug is addictive because there is an obvious and measurable benefit. However, life with those benefits is wrongly compared to life without those benefits. That is like persuading a sick man to keep popping pills because he will suffer more without them. Instead, the benefits of popping pills should be compared to the benefits of being healthy. The sick man should also look at the cost of his drugs and change his lifestyle so he does not need them in future. Prevention is better than cure. The question for the revenue assurance industry is which do they prefer to sell - health or cure? Are we trying to make the difficult but virtuous sell of promoting the equivalent of healthy living for telcos? Or are we happy just to push the drugs and make money by exploiting the sick? ;)

In my opinion, we have an awesome team of revenue assurance bloggers contributing to talkRA (and I am not just saying that because I am one of them.) In a few short months, we have established our formula for promoting the development of revenue assurance. The team comes from all backgrounds - telcos, vendors, consultants - and from all over the world. Crucially, the authors are doing something very different to anything found elsewhere. Instead of playing safe, the talkRA team is pushing back the boundaries of debate and moving the discipline forward as they do. They say you cannot make an omelette without breaking eggs. If that is true, then this crew are cooking up the future of revenue assurance, and it tastes good.

The talkRA team are masters of their domain. But even a team as strong as talkRA’s will occasionally make room for a new member. I am very excited to announce that Hugh Roberts has agreed to join talkRA. Most of you will know who Hugh is already, but for the rest, let me briefly mention some highlights. Amongst his many roles, Hugh is a seasoned and prolific commentator and journalist, with over 150 articles and 300 public presentations to his name. Hugh is Senior Strategist for Patni Telecoms Consulting, is a Non-Exec Board Member of Teleonto, and is Consultant Director for BSS/OSS and Revenue Management at IIR, the conference company. As part of this latter role, Hugh serves as Chairman of the World Billing Awards. During his career, Hugh has been a genuine thought leader who has consistently remained ahead of the curve. It is a privilege to have him on the talkRA team.