Let me share a secret. My interest in RA accounts for only half of my interest in talkRA. The other half of my passion is exploring how cheap modern technology can open up new possibilities for communication and interaction. The RA community is niche, geographically distributed, and not particularly wealthy, making it a perfect testing ground for comms innovations. Also, we work in telecoms, so there are no excuses for not eating our own dog food!

The experience has taught me a lot about what techniques work and which do not work. It has also proven that empiricism beats theory every time. Never mind what I think will work, and never mind what you think either! Neither of us knows what forms of communication will lift off, and which will crash land. To find out, you have to try things. So, after mocking your ability to forecast what will be successful, I am curious to hear suggestions for what talkRA could do next… and what you might like to do next, if given the chance. As far as I am concerned, the crazier and more unexpected the suggestion, the better. But before you send your answers on the back of a postcard (or, preferably, as a comment to this post) then let me briefly review what has been attempted so far, and some activities that we are unlikely to compete with.

• Blogs. Well, duh. But it is worth a mention because we do it well. Looking at the Alexa rankings, talkRA is the top RA blog in the world. Why? My belief is the site’s popularity comes down to one simple proposition: a high turnover of informative and entertaining content. Yeah, that may sound arrogant, but when the choice is this site or a blog where every post is selling you training, or a blog where every post is selling you software, then it is not hard to be relatively informative and entertaining. Maintaining this site’s quality is very important. That is why, despite the desire to increase the volume of posts even more, we will never do what GRAPA does, and issue an open call for literally anyone to write a blog. Otherwise you end up with the depressing experience of reading Henry Whyte’s blog: first post = hello world!; second post = my plans for 2009 and why we should all blog more; third post… there is no third post. And yes, I know GRAPA creates lots of sites just so they boost their rankings through all the spurious links between them, but good content beats everything.
• Podcasts. This has been quiet for a while, because they are a pain to schedule and produce. However, they were surprisingly successful, even when erratic, and I expect they would be successful again, if resurrected. In short, there is a smaller but very hardcore audience that wants to hear interesting people saying interesting things about RA. If blogs are enjoyed during a 5-minute break at the desk, podcasts are enjoyed for an hour at 30,000 feet. The trick, then, is to find high-quality guests (and to let them do most of the talking whilst I stick to asking questions).
• Twitter. The use of Twitter has been stop-start, but in recent months the practice of feeding all blog posts to Twitter has driven a big growth in website traffic. Those dedicated tweeters seem to find it a useful form of news ticker, whilst they also spread the word on the posts they find most interesting. However, one thing we have not done is to foster and encourage unique posts in the Twitter community, or to reverse the flow and bring Twitter posts into the website.
• Facebook. This format does not seem to work for RA. People will join, as proven by the absurd accident that was the Facebook RA group (which I created just to stop Rob Mattison grabbing the name). People joined, looked in, but did not know what to do. Which brings us to the next interaction format…
• Online forums. Morisso Taieb got first mover advantage as soon as LinkedIn enabled people to create forum groups, and he has never looked back. He leveraged his long list of contacts and the inherent advantages of the LinkedIn proposition to maximum effect. Well done to him. As a result, he attained critical mass, and there is no point competing with him. Everyone who has tried has been a miserable failure in comparison. To try to compete would be like firing up a new star in the immediate vicinity of a massive black hole.
• Wikis. Though it would be tempting to set one up, and these have been successfully deployed to aid RA in some telcos, I find it hard to believe that a wiki would work for the RA community in general. I have seen wikis fail even when they address topics that appeal to lots of hardcore teenage internet nerds. Wikis work if there are plenty of freaks with a passionate desire to do the right thing. Hence, Wikipedia works, Wookieepedia works, but the RA page on Wikipedia degenerated into a spam bucket abused by scum buckets.
• Email. This is hardly a new technology, especially when there are news reports saying email is bound to be replaced by better comms technologies in the next decade or two. However, it still serves a purpose, and could be made to work harder for RA. Those ubiquitous emails selling little blue pills actually result in people buying more little blue pills, and GRAPA’s spam was the bedrock of its promotion. In contrast, talkRA’s reliance on word of mouth puts us at a disadvantage. I have always steered clear of spamming people for one basic reason: I hate spam. But should we relax our position, and let people subscribe to email newsletter-digests?
• Video. Considering the absolutely lousy figures GRAPA used to get for its podcasts, I have been surprised that some of its YouTube videos are now approaching the 500-view mark. However, there is no way to measure how many of these were multiple views by the same person, or the result of artificial promotion to existing GRAPA-philes/fools. Their most recent video has much less impressive numbers, which makes me think that even the silliest person will eventually realize that watching adverts is a waste of time. Videos are an obvious outlet for GRAPA: creating infomercials is just a natural part of their business model. In contrast, Tony Poulos’ video interviews are very interesting, whilst avoiding hard sell. However, Tony is backed by a different business model, and it does not apply to talkRA either. Could it be worth the trouble for talkRA to offer its own online videos? Would they be interviews, like the podcast? Or tutorials? Or some other kind of bulletin? And what would be talkRA’s motive in going to all the trouble to provide online video? I am not convinced we will ever deliver video content, but it would be interesting to know what other people think.

Did I miss something? Is there another interaction technology that is sufficiently widespread and popular that it could be harnessed for the RA community? Is there something new and unproven but which is worth the gamble to set up? Feel free to interact… by leaving a comment.

Hats off to risk vendors Active Risk, who are doing some research into an area long neglected. When recruiting, it is important not to judge the quality of a candidate based solely on their qualifications and experience. Personality counts for a lot too. Active Risk is doing psychometric testing of risk managers; see here. They found that 60% of risk managers are ‘reactive introverts’ per the DISC methodology. But Active Risk questioned if this personality type has the powers of persuasion needed to transform the culture of a business, and highlighted the importance of employing risk managers who can drive change. The other 40% of risk managers are inherently ‘proactive’. 30% are ‘proactive extroverts’ (aka ‘evangelists’) whilst 10% are ‘proactive introverts’ (best summarized as ‘demanding butt-kickers’).

You can find out your DISC personality type by taking the online test at Active Risk’s site. For the record, I am a proactive extrovert, but with a distinct streak of proactive introvert. Perhaps that explains why I keep mouthing off in public, complaining that risk management is too reactive… ;)

Because I keep tabs on what is happening in revenue assurance, I end up glancing over an awful lot of job adverts. However, I had to share this advert with you. The phrase that stuck out was:

experience in TELCO a plus (not a must)

Trust me when I say that I dislike being a sourpuss about the evolution of revenue assurance, but there is no hiding the truth. We have not progressed very far if a job as a revenue assurance specialist does not demand a passing knowledge of how telecoms companies work, never mind any experience or training in revenue assurance. I do not want to exaggerate the problem – this is obviously a junior role. At the same time, I think it inevitable that the global telecoms workforce is bound to contract. Cost efficiencies are needed in saturated markets, the trend is towards reducing cost bases through mergers and streamlining of group operations, and we know that even if we get explosive growth in some kinds of services (such as data traffic) this will not equate to explosive growth in revenues. On that basis, if vacancies open up in one telco, it should be increasingly likely they can be filled by experienced staff from other telcos. But this advert does not ask for specific experience, or relevant qualifications, or anything other than a general aptitude for using computers and working in an office environment. I can also sympathize with the employer; employing and training somebody with no experience may be cheaper than paying a premium for existing knowledge. All of which leads me to two conclusions:

1. We must be realistic about career paths in RA. If experienced RA practitioners have to compete with inexperienced people, then we must be failing to persuade HR functions and hiring managers that it is worth paying a premium for RA experience, qualifications etc.
2. You cannot demonstrate value by preaching to the converted. Many of the arguments made about the value added by RA only influence the people who already want to believe they are true. Pie-in-the-sky promises keep backfiring on RA people because nothing is gained by rigging the measurement of our own performance; other people have to tell us how much they value what we are doing. If they see the value, they see it. If they do not, they do not. Making the value apparent means accepting yardsticks that the rest of the world can understand, not devising complicated schemas that lots of RA people do not understand – or that sensible RA people will dispute.

These are grim conclusions if you like to think of RA as a route to getting rich quick. The irony is that is exactly how RA is sold a lot of the time: a short cut to riches, whether by using software to pick the legendary low-hanging fruit or collecting certificates from training courses that never fail a single student. The only sure route to success is to deliver indisputable value and to do it in a way that separates the superior performers from the also rans. And that means solid data that shows a clear and measurable divide between best practice and the alternatives. We need fundamental and consistent ways of scoring RA performance, and those scores have to be acceptable to the customers of RA, not only to its suppliers. For me, this means measures that transparently connect RA’s work to the figures in the accounts, the profits reported to the shareholders, and the cash paid out as dividends. That is the real must-have for RA, if we ever want to identify the A+ practitioners of RA, and underscore the value of employing the best.

It seems that old pal Nixon Wampamba cannot escape the evils of simboxes. Last December he was in the news after the arrest of eight fraudsters. This year, Nixon’s Airtel team is being described as ‘less vigilant’ than his Ghanaian peers… and indirectly held responsible for USD9M of simbox losses suffered by MTN Ghana between March and October; see here. According to the story:

Figures from the National Communication Authority (NCA) indicate that in September, 2011 alone, it detected 5,454 SIMS being used for SIM boxing, out of which 21 (0.39%) were Vodafone SIM cards, 64 (1.2%) were MTN and Tigo SIMs combined, and the remaining 5,369 (98.44%) were Airtel SIM cards.

When approached by the press, Nixon gave as good as he got, and managed to turn the tables on his would-be detractors by highlighting the expensive retail tariffs of competitors:

“Since we launched our 8-8 flat tariffs the SIM Box fraudsters have gravitated to Airtel, so maybe if any telecom operator beats our rates, then they may also have the SIM Box fraudster gravitating towards them…”

Nixon went on to say:

“It is true that our SIMs still remain the most attractive to fraudsters due to affordability, but I can tell you that over time the NCA’s detection of Airtel numbers in SIM Boxes has reduced from about 500 a day to 100 day – a clear sign that we are winning against the fraudsters gradually…”

Both Nixon and the fraudsters are engaged in a long and hard fight. Good luck to Nixon, and let us hope that by next December, Nixon will be enjoying better headlines.

As previously reported on talkRA Malawi’s regulator is imposing a ‘revenue assurance’ system on its operators, even though the operators insist it infringes customer privacy. In a new joint statement, the operators have reiterated their position:

“We therefore continue to alert our customers and members of the general public that, once the system is implemented in its current form, the operators will no longer be in a position to safeguard the privacy and confidentiality of customers’ communication activities, as we understand it to be our obligation under our respective operating licenses, subscriber contracts, the Communications Act (1998) and the Constitution of the Republic of Malawi.”

There is no sign that the Malawi Communications Regulatory Authority (MACRA) intend to back down. MACRA Director General Charles Nsaliwa reportedly told the press that:

“The system will ensure quality services from operators and will only monitor Call Detail Record (CDR) which operators already submit to Macra on request…”

Meanwhile, Malawi’s Nyasa Times has reported excerpts from the legal advice given to MACRA about the new system. If reportedly accurately, the advice suggests the need for law reforms and public consultation before the system is implemented. It also suggests that Malawi’s operators are already paying their fair share of tax:

“Operators already submit all the information required by the system, both as regards revenue and quality of service. In respect of the former, they are audited annually by reputable auditors and do submit accurate revenue data to MACRA…”

Something smells rotten. CDR data cannot be used to ensure the quality of services. National regulators habitually determine service quality through tests that simulate the user experience, not by scrutinizing operator CDRs. It looks to me that Malawi’s regulator has stopped serving Malawi’s public, misleading them that their privacy should be threatened for a ‘quality’ benefit that cannot be delivered in the way they are suggesting. The real purpose of the system is evidently to prevent tax evasion by Malawi’s operators, which begs the question of why the system is needed if existing audits find no discrepancies. Customers deserve to be told the truth of that, and not told some nonsense about improving service quality. Malawi’s citizens can then decide who they think is less trustworthy: the operators when paying tax, or the government when reviewing every call made in Malawi.

Look here for the Nyasa Times’ article on MACRA’s legal advice, and here for more on the public statements made by operators and the regulator.

Every now and then I happen upon a new RA website that I have not seen before. Most of them aim to promote a consulting or software firm; on one of these sites I recently found the following emphatic statement:

Revenue Assurance as a Profit Centre

Revenue Assurance should not be considered a cost centre. A good RA function can provide positive benefits to the organisation.

Hmmm. Sometimes I sit on the fence when others instigate debate about whether the Revenue Assurance Department should be a cost centre or a profit centre. I well remember how Hugh Roberts asserted at one conference that RA should never be a profit centre. My response then was to offer counter-arguments about why execs should have the freedom to set meaningful targets for any function, and if the primary role of the RA function is to improve the bottom line, then RA should be given a relevant target and measured against it. But in truth, it goes against my nature to give dogmatic answers to questions like this. My golden rule is to be pragmatic and to select an approach that best suits the business and its objectives. So when I hear arguments that the RA Department should always be a profit centre, or always be a cost centre, I recoil from both. However, if forced to choose a rule of thumb to apply generally, I know which side is right. Hugh Roberts is correct – in general, making the RA Department a profit centre causes more harm than good.

To boil the argument down to its essentials, we should quickly clarify what is a cost centre and what is a profit centre. According to Wikipedia, a cost centre is

… a division that adds to the cost of an organization, but only indirectly adds to its profit.

and Wikipedia gives the following description for profit centres:

a part of a corporation that directly adds to its profit.

A profit centre is like a business in its own right – it has revenues and costs. A cost centre could not exist in its own right, because it only generates costs. For this distinction to be useful on a management basis, it means a profit centre must sell something in order to generate its revenues. It could sell to outside customers, or it could sell its services to other parts of the business. For me, the key notion here is that there must be a sense in which profit centres sell something that its customers want, and would voluntarily pay for. So it is meaningless to describe a unit as a profit centre if its ‘revenues’ are really a form of ‘tax’ i.e. if internal customers are forced to pay for the service, whether they want the service or not. Hence, a function like R&D would naturally be a cost centre, whilst a sales function would naturally be considered a profit centre.

Having established our context, the next question is straightforward. What service could RA sell? It could sell the ability to prevent, find and/or fix mistakes. And therein lies the problem. That is not the kind of service people willingly choose to buy, at least not in the amounts that would be healthy for the organization as a whole. The benefits of the service provided by RA are not easily correlated to the costs of the service. As with R&D, RA exhibits no straightforward and predictable relationship between the amount you spend on it and the value you generate from it. Yes, you need R&D if you want your business to innovate. Yes, you need RA if you want to reduce leakages. But no, spending twice as much on R&D will not generate twice the return, and nor will that equation work for RA. You can spend a lot on R&D and get nothing of value. You can spend a little on R&D and get lucky, generating a lot of value with a breakthrough that comes along at just the right time. The same is true for RA. You can spend a lot on discovering there are no issues and that your business makes few mistakes. You can spend a little and discover there are plenty of easy pickings. But if RA is ‘profitable’ that rather implies your business is rotten and full of holes, allowing leakages to pour through it. In such circumstances, would it be reasonable to expect other profit centre managers to be willing customers of RA? From their perspective, RA creates a lose-lose scenario for the internal customer. Either RA generates less return than it costs, or it finds and reports all the shortcomings and faults of the customer. That means there is no natural selfish motivation for the managers of other business units to buy the services of RA on an ongoing basis. Their only motivation would be to buy RA services because it is in the best interests of the company of a whole – defying the original logic of splitting the business into profit centres and cost centres. The thinking behind profit centres and cost centres is that there can be internal markets and exchanges of value within a business. This pushes RA into the realm of a necessary cost that individual units would not willingly pay for unless they are compelled to do so. Even if a unit did want to employ the services of RA to find issues and clean things up, they would want to do so on a temporary basis only. Eventually there has to be reckoning where the issues are resolved and the RA service can be terminated because it is no longer profitable – hence still pushing RA to be a cost centre in the long run, even if it did generate a profit in the short run.

When creating internal markets for RA, there is a temptation to confuse two economic essentials: the value of mistakes and the cost of preventing and addressing them. It is flawed to assume that the value of mistakes found by RA must be higher than the cost of the work done by RA. Even if it is often true that RA generates more value than it costs, this is not a logical or practical necessity. Indeed, the very fact that RA can generate more value than it costs shows the imperfection of how we run businesses in real life. A perfect business would suffer no leakage – and would know this without needing the checks done by an RA team. Error-free processing would be built in to processing; perfect design would eliminate the costs associated with errors. An RA function could never be a profit centre in a perfect world, because it would generate no revenue. Of course, the world is far from perfect. This is why it can pay off to invest in RA over a finite timescale. The key point here is that the timescale should be finite. Eventually the business should have cleaned up its historic mistakes, and get better at avoiding new ones. A mature RA function helps the business to evolve, and get to a stage of maturity where it makes fewer and fewer mistakes. To repeat an oft-used phrase, RA should aim to put itself out of business, and that means it cannot survive as a profit centre. A profit centre is a kind of internal business, and for RA to keep profiting, the rest of the business must keep leaking. But this is unhealthy for the organization as a whole, as money is spent on the never-ending fixing of leakages, instead of preventing them.

The job of RA is like separating oil and water. A shaky business can create an impression that oil always needs to be extracted from the mix with the water. But in the steady business, the oil and water separate naturally. The RA function can help the bottom line on a permanent basis, as well as in the short term. It does this by helping the business to run smoothly, not by encouraging a violently messed-up mix where managers cannot tell good from bad. Seeing the business a whole, and not from the perspective of a profit centre, RA can find the sources of pollutants within the revenue stream, so it can stop them at source. But if RA has to generate profit, it has no incentive to behave like this, so will not behave like this. That is why, as a rule of thumb, Revenue Assurance functions should be treated as cost centres in the long run, even if they can generate profits in the short run. Without the freedom to think of the business a whole, the RA team becomes another cause of sub-optimal business performance. To think of the business a whole, RA practitioners have to be released from the obligation to generate a measurable internal profit.

Whilst my thinking on RA is long-established, I recognize the organizational and motivational reasons to be pragmatic. I would never say ‘never’ with respect to making the RA Department a profit centre. If I believed a business could treat it as a temporary stage in its evolution, then the RA unit could be a profit centre. The question here is whether we could rely upon this temporary compromise. Once RA is established as a profit centre, it will be easy to forget, and hard to motivate, the later transition of RA to a cost centre with a truly holistic perspective that embraces prevention as well as detection of leakage. Nevertheless, I am heartened that greater minds have already realized this difficulty, in a much more universal way than I have. This point about RA is really a specific example of a general problem: whether it is appropriate to conceive of a business as a series of units with an internal market and internal flows of revenues. Answers to this general question can illuminate our perspective on whether the RA function is a profit centre or cost centre. With that in mind, I turn to the wisdom of management guru Peter Drucker. Drucker was thinking of the interests of the business as a whole when he asserted his ultimate answer:

The only profit center is a customer whose cheque hasn’t bounced.