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.

I guess I don’t understand how a data source be marked as primary or secondary, and who decides which is which.

I will illustrate my question with the following scenario in an area where I have some understanding: identifying billing verification (BV) discrepancies. Sometimes best practice is to model the tariff as defined at the physical contract with the end customer, and model the tariff as defined in the billing system, and model the tariff as defined on the website of the operator, and model the tariff as filed with the legal department and more… Now we can take these variants and conduct a parallel run and see if there are any discrepancies between the various dialects of what should be single version tariff spec.

How would you mark each version? Which is prime and which is secondary? IMHO for proper BV you want to model all, regardless. The end result of this exercise should be a single tariff definition company wide.

Apart from people randomly copying in other people on totally irrelevant emails, executive indecision is the single greatest curse of working life.

Wearing until recently an RA vendor hat, I was always puzzled by the (in)decision making process in many telcos. While it is evident that in many cases RA projects demonstrate financial merits which are usually easily quantifiable, it was always a challenge for me to understand the pathetic indecision phenomenon. The lamentable part of this paradigm is that the monthly revenue loss, which usually cannot be claimed back from the customers, is piling up and the overall system cost of a typical RA solution is often less than the monthly expenditure of the telco on bathroom tissue.

I was rather unimpressed by the full scale decision paralysis and an inability to action. The only thing brought into being are hundreds of pointless meeting where reports and judgments are made. I hope I’m wrong, but how else could someone explain to me the fact that a sales cycle of an RA system lasts for an average 15 months, for a system that costs less than a monthly expenditure on bathroom tissue, while not considering the daily leakage, which usually cannot be reclaimed a posteriori.

In this post I would like to provide a different perspective on the supposedly separate disciplines of fraud management and billing verification and to show that there is significant synergy to be gained by an integrated approach. Another objective is to obtain the feedback of the RA community.

Fraud management systems (FMS) and billing verification (BV) systems are among the technologies available to RA managers at telcos. Each technology tackles a different aspects of RA – fraud management handles mainly external attacks on the SP’s revenue while BV handles internal failures due to human error, misspelled product/tariff specifications or misinterpreted business rules.

Fraud management is a “cat and mouse” game between fraud perpetrators, usually well organized and technologically sophisticated criminal groups, and telecom service providers (SP). FMS comprise a large family of techniques that aim to tackle the wide variety of types of fraud. However, there is no final victory possible for two reasons: (i) New types of fraud are regularly invented and new fraud opportunities are created by the service and technology advancements of telecom networks, (ii) FMS have inherent technological and manpower limitations. Practical FMS discover new types of fraud after considerable damage has been done and are expensive to purchase and operate, as they require highly skilled manpower in order to be used effectively. One major shortcoming of FMS is that they can’t accurately prioritize quantitatively the revenue losses due to fraud, so system operators may waste much time chasing after the less costly frauds.

RA/BV systems has traditionally been viewed as a financial audit tool rather than as a fraud management technique. I would like to show that BV can enhance the capabilities of existing FMS by (a) detecting frauds missed by the fraud management system, (b) detecting suspected fraud patterns earlier, (c) helping tune the FMS’s detection algorithms to changes in legitimate customer behavior in order to avoid false alarms, and (d) assisting with content and eCommerce fraud prevention. The BV system’s ability to monitor and reconcile all of the SP’s revenue streams and to prioritize revenue loss sources are especially important. They enable the SP’s fraud management experts to focus their efforts in fruitful directions.

Both fraud management and BV systems process CDRs at a different stage and format. FMS process mainly raw CDRs or SS7 events, while BV systems process CDRs that are revenue bearing events and contain customer related information for billing (e.g. calling circle discount indicators, cell info, package info and much more). After the initial step of CDR collection, the information is processed quite differently in these systems. In addition, FMS are usually operated by technological experts while the BV systems are operated by personnel with a financial background.

I want to think that the performance of FMS can be improved by using effectively the capabilities and information available from BV systems.

The main desired features of a fraud management system are the following:

(more…)

Hello everyone, my name is David Leshem, a technology entrepreneur and one that thinks he knows something about RA and telecoms. I’m glad to post my first ever blog about RA and the world.

I’m based in Israel, and once I was gazing through a paper and saw an article by some anthropologist that tried to model world conflicts by drawing an analogy to a “coffee model”. Naturally, coming from Israel, one of the hot spots on the globe, since the days of Richard the Lionheart, I was attracted immediately. The main notion of this article was that countries that know to appreciate good coffee have a true hope for peace, and vice versa. Let’s look at the relatively poor quality of coffee in the US and the number of conflicts it has direct relation to. While in Israel Starbucks failed miserably since good quality coffee is appreciated and available at plenty of quality cafes. I was hooked. We, as a nation, have a hope?! I should have kept this article, even though it was a quasi serious one, it had an interesting point and something to think about.

Eric, in his recent blog, was asking whether RA could grow from a caterpillar into a butterfly. I would like to examine this further. I would like to suggest examining several models to validate this view. First let’s try and establish some common grounds where RA is highly regarded, where it is “persona non grata” and where it is in between stages. I would define the in between stage where RA is either paid lip service or of low importance. Having the privilege in the past to visit quite a few customers, I’m fully aware that RA importance depends on the management of a particular operator, yet, in many cases one can find common lines how RA is treated on a territorial basis.

The objective is to model the collective empirical experience we possess and so predict where RA could be develop to a butterfly status. It also would be interesting to propose a similar model for RA as the “coffee model” or alike. As an illustration I remember being asked by a CXO at a large Turkish mobile operator a delicate question…”why do I need this shit?” This question was raised after a couple of hours meeting with a large consulting firm. The opposite approach seen in a large Singapore mobile operator, where the second in command is responsible for RA.

Let’s and try and map RA on the globe:

Countries where RA is “persona non grata”: Turkey, most of Latin America, China, Finland, Middle East, Italy.

Countries where RA is in a between stage or paid lip service: US, France, Spain, Poland, UK? and some other former east European countries (sorry Central European countries), Israel. Well, actually in the US, RA addresses mainly the unique interconnect aspects for this market and Bellcore related table issues (NPA-NXX ect). This challenge is not really applicable for the rest of the world.

Countries where RA is highly regarded: Singapore, Australia.

I am aware it is an initial attempt to map the RA on the globe. This is where I would ask for your help and collective experience. Let’s try and categorize countries and cultures to start mapping where RA is prevailing. Having that we could jointly develop the “coffee model” for predicting where RA could become a butterfly.