I recently found myself occupied with new endeavors (smart grid related topics etc). Seeking complete closure, I’m somewhat troubled why RA attracts only limited interest from the “typical” telco CXO.

TalkRA is discussing various RA techniques and standards; It had been read by a small and quality community of RA professionals. Yet it would be safe to assume its coverage is limited to a small number of RA practitioners.

I will try to offer a suggestion why…

The highest art of any trade is being able to answer the “what if not” challenge. I presume no one would dare to ask “what is the cost of not have a billing system?” or “what is the cost of not having a customer service department?”

Yet, I’m not so sure what would be the reply if we challenge the RA function and the related costs it involves. Sure, there are rather useful RA dashboards, and there is documentation about the right way of doing business by the TMF, Papa Rob and plenty of consulting firms. We’re also well familiar with fancy ROI figures which support the cost-benefit argument to implement an effective RA policy. However my challenge is being able to reply to a simple question: “what is the cost of not having an RA?”.

For sure one can craft a reply and mention SOX as a supporting argument. Others would mention proper financial controls. In some cases we can offer an uphill reasoning that we need RA to demonstrate that the telco is taking all the proper measures to shield itself from class action law suits when billing is not right.

To my ears, these are somewhat whining arguments. I’m looking for a clear and decisive answer, similar to one where no one dares to ask the cost of not having a billing system. At least in the case of billing, the reply lays within the question. Can somebody offer a similar answer for RA?

talkRA might consider offering an exciting prize for the best reply!

Recently I stumbled upon this story about Kenyans making a cheap mobile phone charger for their bicycles. What strikes me is the fact one would expect it is in the best interest of a telco to give such a device to consumers. The logic is self explanatory:

no power = no calls
no calls = no revenues
no revenues = no telco & no RA as well….!

No one could dispute that to have revenue assurance we must first have revenues.

The cost of the charger is $4.50. Yet no one gives it away for free to the consumers. Amazing.

By contrast, in Kenya the life insurance companies are providing free drugs to AIDS patients. Drugs which claim to extend life expectancy of their customer bases and so improves their financials… The math seems pretty simple: as long as the person is alive he/she is paying the monthly premiums or at least not claiming on their life assurance policy, which improves the financials. It looks like the telco CXOs and the RA never thought about a parallel analogy in their domain.

One comment though, a CFO of one telco in Africa mentioned once that they provide free AIDS drugs to extend the life expectancy of their customers. Seems as they didn’t think beyond that to also providing manual phone rechargers.

Of course there are hand operated phone rechargers, Nokia has one. There are also solar rechargers. I even recall one top-notch finger-revolving recharger, but none of these come close to $4.50 recharger to use with bicycles.

On a personal note I thought that telcos already altered their engineering DNA by adopting the same techniques as mass consumer companies or copying how retailers conduct business. Seems as, at least for some, there is still a way to go.

It seems Russian communications providers have broadened the definition of RA - to include blocking VoIP.

It is obvious Skype and IM erode prime revenues for any telco. The question that matters is whether they can find alternatives to compensate. It seems Putin and his buddies came up with a simpler solution: say Skype is a threat to national security (no one can argue with that) and, by the way, also a threat to the personal wealth of a few super-rich individuals.

I hadn’t conducted any further research whether this modus vivendi occurs between Skype and other countries or operators. It seems the old saying that “pornography is a matter of geography” also applies to RA.

I would like to share with you an article I stumbled upon that made me smile. Its title is “Life under the Chief Doublespeak Officer” and it was written in 1989 by William Lutz. In my view, it is as relevant as ever.

In this blog, I would like to challenge the definition of RA, following similar lines to the article above. I offer an idea why this function attracts only modest interest within a common telco.

No one would argue that the fundamental definition of Revenue Assurance is about assuring the telco makes money, this month. This necessitates that Marketing, Sales, and Operations have a joint and collective role in managing a customer experience that delivers the brand promise.

Yet, in how many telcos do RA managers have the freedom to evaluate the above functions, without first going through a career change opportunity?

Let’s see.

Marketing defines the brand promise

Marketing identifies the most profitable customers and what they value. Marketing documents and understands all aspects of the purchasing decision. It defines the attributes of product performance. It determines the brand promise and communicates it to the marketplace. In an ideal telco, Marketing and Operations work together to translate the customer experience into specific processes and actions through which the organization can deliver on the promise. If the brand cannot deliver on this promise, it is destined for failure.

• In how many telcos is RA an active contributor in these processes?
• In how many telcos does RA have any say in these topics?
• Would someone allow RA to review market research findings about brand strength?

Sales effectiveness

Without a skilled and productive sales organization, few firms can survive, especially these days. The sales function takes place in a constantly evolving environment. Sales organizations must adapt to continuous changes in their products, customers, competitors, and markets. Intense competition places great value on understanding and responding to current trends within and across industries.

• What RA department would call up residential customers and ask their view on the telco business?
• What RA department would pay a visit to a large corporate customer to learn about the issues that prompt them to take their business elsewhere?

Operations creates the right infrastructure and processes to deliver the brand promise

The brand promise is only as good as the internal processes that deliver it. Every process should be designed, monitored, and evaluated on its ability to deliver against brand promise. This includes defining and removing internal obstacles and then strengthening the organizational ‘enhancers’ (like communication systems and technology).

Successful organizational alignment means that Marketing and Operations have a joint and collective role in designing and managing a customer experience that delivers the brand promise.

• What RA department would call the call centre to experience the promises that Marketing states in its ads… without risking being right-sized by the COO immediately afterwards?
• What RA manager would propose metrics to evaluate operational effectiveness?

Conclusion

I guess I made my point. I would be intrigued to hear your comments.

I guess in a way I repeat myself. I admit I cannot help it. Returning just a couple of days ago from the US, and experiencing the impact of the financial crisis, is beyond any impression I can get from media reports and commentaries.

The US; a small town in Florida. A meeting on a Monday morning. An agenda, open issues, action items and all those mundane topics which you find in every meeting. However this time it was somewhat different. This time you see the faces of people that, instead going into through the listed issues, simply don’t care about the agenda. Instead, they discuss, in length, the breaking news of the morning: layoffs of 53,000 Citibank employees. Later that day, nobody was sure how to comment when CNN reported that, for the first time in its history, GM had stopped paying its dealers due to cash shortages. The gravity of the situation now leaves little room for imagination.

My personal view is that this crisis is far from reaching its bottom. Americans have maybe started to understand the scale of it, but there is still a long way to go before they fully comprehend. They still drive huge cars (by the standards of the rest of the world), care little about energy and do almost nothing about switching to sustainable energy sources. Nobody seems to be installing solar panels on the roofs of the houses in sunny Florida. The American car industry, which is one of the prime pillars of the American economy, is doing badly. American cars are sold mainly in the US and fail in international markets, because of their size, mediocre reliability and rather unappealing design. In California, the prevailing cars are no longer American-made. Korean, Japanese, and German manufacturers have taken their place. The American car manufacturers must understand what has gone wrong, or else they will suffer the same fate as the British automobile industry, which received generous government aid and ended by being sold for less then the value of its debts.

Meanwhile, the average white collar, middle class American is still overly concerned with the cost of a cup of cappuccino at Starbucks. On average, they spend $1200 a year on Starbucks’ hot water and coffee beans. Until they change their priorities, the effects of any economic stimulus will not radiate across the whole economy. At least this is my view. So far, no financial magazine expressed any interest in these views of mine…

However, along the same lines, all telcos and vendors are lowering their revenue forecasts. Sprint announced a new package – everything for $99.99/month. No small print. Unlimited everything - calls, SMS, MMS and data. I guess Sprint will soon be joined by others in the race to offer the best “eat as much as you can” offers.

The papers, any papers, even in a small town in Florida are filled with advice - on how to promote your value within your corporation. They are all full of recommendations on how to be a ‘big picture’ person, on how to justify your job, on how to… yada yada…

Where does revenue assurance fit into this new world order? In my previous blog I discussed the role of RA and where it stops. I’m afraid it was indeed a bedtime story. I would like to challenge the RA managers and ask them how they wish to justify their job when telcos start to adopt an ISP mentality and offer unlimited bundles of everything. What is the cost of the marketers offer? I hope someone did the “fear-greed” analysis prior to launch. Needless to say, I hope it was the RA manager that took up the challenge and questioned the level of profitability in front of the Board of Directors. Otherwise, unless I am missing something, why would anyone see a need for RA in this new régime? I sincerely hope that RA managers can reinvent themselves, and remain relevant.

Many years ago, in the year of 2001, there was Genie, the mobile internet portal by BT. Genie was an attempt by BT to unify various global brands into one as well as address the mobile internet. In the UK it was BT Cellnet, in Germany VIAG, Telfort in the NL and Digiphone in Ireland. Nowdays after change of ownership it is known as O2.

When I met the Chief Data & Marketing Officer of O2 and President of Genie, a long time ago, his vision was clear: data is data, and kilobytes are kilobytes. Just as customers pay the kWh cost for the electricity used to power their fridge or TV, mobile internet customers, he believed, should pay for the data they consume. To make life simple, the cost of each KB should be the same, whatever the customer is using it for.

I was hooked. This felt so good, like the feeling I get prior to making a smash in tennis. Yet there was some degree of doubt. So I asked the guy softly, if you are going to charge for a banking balance query say £0.80, and it usually comprised of 80 bytes, that means 1 byte costs £0.01. Would that mean when I download a 100kB web page, I should pay £1,000?

You would agree there was no point to continue the discussion. After all I was a vendor, he was a potential customer and a popular keynote speaker. So even though it is a vivid case of a fundamental flaw in the business model, it was not my role to confront him with blunt questions. The end result of Genie is history.

The one guy that made money from Genie, and similar failures along the way, is Matt Haig. He wrote Brand Failures: The Truth about the 100 Biggest Branding Mistakes of All Time.

Let’s take a step back and discuss the telco business as a business with the objective to make money, or at least not to loose money. Whose role it is to make sure that the marketers come up with the right tariffs? As a good and old friend of mine once said (when he was still a Billing manager), “every time the marketing guys get drunk, I have a new tariff”.

I would like to think we can all agree, that when the tariff is wrong, and costs the business money, that finding leakage related to the tariff is less important than understanding why the business chose a bad tariff to begin with. I’m quite puzzled by the fact that I can’t recall a single telco where RA helps to evaluate which tariffs to launch and which tariffs to scratch.