Back in the late 90s and early 00s, when Revenue Assurance officially acquired the title of “buzzword”, the industry was awash with innovation, crazy ideas and possessed a real edginess. Every different person you spoke to had found a new way that a telco could lose money, and chances are that you would never have thought of any of these by yourself. Vendors were entering the market, all with new offerings and approaches to help tackle the mysteries of revenue leakage. Industry groups were thriving with people keen to get involved and contribute. Let me then ask some questions to challenge whether RA has settled and whether that edge is disappearing:

- has the maturity model seen better days? The maturity model is often held up as what RA success looks like and what should be strived for. However, it seems to built out of what it took to make RA work in large, bulky, incumbants that generated revenues primarily from voice and maybe SMS. Is the alignment of maturity to first centralisation and then decentralisation; and controlled and managed processes, adept enough to allow flexibility in an environment characterised by changing business models, technologies and revenue streams?

- have vendor tools converged to a point of indifference? Fundamentally, it seems RA tools were built on improving reconciliation capabilities – across larger data sets, over more diverse data feeds, to handle more complex business logic, and present results more intuitively. But with advanced analytic techniques being more accessible, should we expect to see more innovation in how we use the wealth of data beyond reconciliation?

- has there not been enough work on measuring RA performance? Methods to calculate quantifiable revenue uplift, coverage of RA activity, controls established, processes decentralised back to operations etc have existed in various forms of acceptance for some time. Targets set on these become “easy” to meet and even easier to argue away if they are not met. Meantime, objectively determining the value of less tangible RA activities, such as those centred around preventative work, are lagging. In scientific fields, great endeavours in discovery are often preceeded by great improvement in measurement. Change what, how, or the depth to which you measure RA’s value and see what opportunity may arise.

- where is all the innovative thinking? This is no way meant to be disrespectful to the many people who spend time and effort looking at RA today. Conference attendances have fallen and annual events are being cancelled – if you ask attendees a consensus opinion, whether true or not, is that “it’s the same people saying the same thing, year after year”. How does RA bring back innovative, disruptive and challenging discussion that provokes wider debate?

So what might RA need? New thinking, new measurement, new uses of technology and new aspirations that challenge and bring out the best in RA practitioners? You be the judge.

Posts on talkRA rightly focus on the life and times of the RA practitioner but for a moment let’s reflect on a primary object of our work – that small 1Kb bundle of joy, we affectionately call a “CDR”.

While RA people may cry out asking what’s next for them personally, think of the CDR. 10 years ago they were front and centre for every fraud and RA manager. Fraud systems obsessed with building interfaces to collect them, while RA systems rushed to reconcile them. We deployed SS7 probes to check their accuracy and verified mediation systems fill with enough complex logic to entertain any CDR passing through on a quiet Sunday afternoon. Each individual CDR could be comfortable that the rated price that it was given would in fact turn, as if by magic, into real revenue. CDRs were important and everyone knew it.

But then it started to change. Fraud managers and analysts wanted more data and information on which to base decisions and while CDRs continued to be needed, understanding the fraud risk of the CDRs together with the customer profile (including subscriber information, payments data etc) became central. Competitive markets drove tariffs lower and plans with included call minutes became popular – essentially to the extent now that, like fixed broadband, the value lost from missing a CDR or rating one incorrectly is rapidly approaching zero. Fraudsters targeted the latest iPhone at the point of sale or split up prepaid packs before our a service was even activated, let alone creating CDRs. And products continued to be integrated into bundles, where the value does not derive from the usage itself but from the recurring monthly charges.

So spare a thought for our friend the CDR, and as you reflect, think also about the time in your day spent worrying about CDRs and all the places they may visit and be transformed by in their journey from switch to bill – is it still the best use of your time to give them such attention?

Looking at the language in a subject area can often provide fascinating, or at least interesting, insights into how thoughts and ideas change over time. A couple of weeks ago I asked Eric for a copy of all the posts ever put on talkRA. I had been playing around with Python’s open source Natural Language Toolkit (www.nltk.org) and wanted to test this on something familiar. Eric kindly obliged with the data and this is the result of my cursory analysis.

I used the more than 500,000 words in the talkRA blogs and responses as a proxy for the changing discussions in the world of revenue assurance. Some explanation first on reading the images. All words on talkRA were sorted chronologically so the first word written by Eric, in the first blog called “The RA Truck Stop” is in position 1, the second is in position 2 and so on up to a week or so ago. When you look at the image (click to expand) each time a word, or phrase, appears on a talkRA, the position number is noted and then plotted at that position. The more points on the graph, the more the word or phrase has been used, and the bigger the number for any individual point (or higher position on the image), the more recently it has been used. Hope that’s clear and so on to three quick pieces of analysis:

Firstly, I’ve taken some of the key phrases we hear. “Revenue Assurance” appears, not surprisingly, pretty consistently throughout the history of talkRA blogs. “Risk management” is emerging more consistently and “business assurance” is a late entry but starting to become more relevant.

Secondly, I thought I’d look at the business functions or processes that get talked about. Again you can see there is an interesting story to be told. “Billing” is a constant theme and the “switch” and “finance” are of interest but discussion on signalling and provisioning is limited.

Lastly, I looked at some (I acknowledge the list is incomplete) of the organisations where RA gets talked about. Again some interesting trends – I expect all readers will be familiar with the names mentioned and perhaps its safer if I let you draw your own conclusions.

I still have the data and the above are only my ideas. If any readers have any further words or phrases (preferably 2 words only) then provide a comment and in a week’s (give or take) time, if there is interest, then I’ll provide an updated graph with readers’ requests.

It’s been a while since I last posted to talkRA so in the interests of transparency, I now work for Ernst & Young and anything I post is my opinion only. With that now officially declared, on with the post.

Though I’m still an EY newbie, what has become apparent to me already is that lessons learnt in telecoms RA have a broader application across other many other industries and business processes.

It is common to hear that telco RA skills are well suited to high-volume, low-value transaction industries like financial institutions and utilities (as examples). It’s also an emerging (or even emerged) trend that RA skills are being used to tackle other challenges within a telco. Both the above are evident from where the software vendors are positioning themselves and taking their bets about where they believe the growth exists. This can also be seen in discussions within telcos about where to next for RA to continue to add value, and be seen to add value, once the low hanging fruit has been picked.

However, it would be unwise to think that only telcos or those with large volumes of transactional data face challenges with the loss of value through a business process. Some of the fundamental RA activities are around ensuring all calls, sessions, events etc that should be charged, are being charged; checking that all services provided are being charged for and that everything on the bill is charged in accordance with agreed terms. Hopefully nothing controversial in the above but remove the telecoms terminology and simplify – ensure everything that should be charged is being charged and this is at the right amount. If you can work with the complexity of telecoms data and business rules then working to achieve the same end objective within other industries should be possible.

And indeed it is, but while I haven’t yet experienced the complexity of telecoms data, I have found that there are more data quality issues that need to be addressed before making use of the data. It’s also fair to say that the business rules of how to treat that data and how to add value to it (e.g. price it), is equally complex outside telco as it is inside telco. As RA people we often complain of the complexity that the marketing people dream up when setting pricing structures but this is not unique to telco as revenue risks are sought to be stablised. In order to manage the risk of revenue variations due to both known and unknown external factors, I’ve seen many contracts established between organisations which seek to account for every possible variation (if oil goes up, your cost will go up by a factor; if shipping costs change, same story etc). And of course, where there is complexity, there is risk of error and loss of revenue or incorrect inflation of costs.

This leads me to my concluding remark. For most, if not all, organisations, the bill for telecoms services is not the most significant one. Organisations issue and receive invoices every day – many of which, at least on the issue side, are business-to-business transactions rather than business-to-consumer. The value of these B2B invoices and the complexity of the contracts negotiated mean that telco revenue assurance skills, methodologies and tools can, and should, seek a broader reach beyond telco.

All the best in 2011 to all talkRA readers.

I was trying to think about on how RA has moved, changed and re-invented itself in the 13 years I’ve now been involved, in some form or another, with RA. To my view there have been some movements and if I look at those, then perhaps I can have some liberty and crystal ball gaze to the future.

The first trend is the emergence of increasingly powerful software tools to specifically identify, address and help manage revenue assurance. There should be little doubt that this has helped RA investigate new areas of revenue streams for potential loss while also automating much RA activity. This can be very beneficial for those new to RA who can draw on this expertise to learn from the experience of the vendor and deploy an RA capability quickly and usually with some financial benefit. The contrast of this is that the maturity of the tool set exceeds the maturity of the RA people, who may miss valuable steps in understanding the underpinnings of RA work and how their business works. The risk is that this can produce an over reliance on RA to be “solved” by the software tool. The greater risk though is that RA is “defined” by the software tool and its capabilities and roadmap and not by the operator. Missing those early baby steps in RA can lead to a strategy that is aligned solely around the technology deployed and is hence, however well intentioned by the vendor, unbalanced.

This is a similar issue as faced by fraud management. In this case, I have seen many operators who struggle to adapt to new fraud types, until the vendor issues a software update, and will argue passionately that because their system does not detect that type of fraud, then it is not really fraud. When the software update though is deployed, it can be thought of as a fraud again.

The leads to the second trend which is the growing number of organisations undertaking services work in the revenue assurance domain. If RA got into the limelight first during the dot.com and tech busts of the late 90s and early 2000s then we should not be surprised that it has been reinvigorated through the latest GFC. The mantra around billing or charging accurately for every event is particularly powerful when revenue growth is limited. But perhaps these service organisations are also seeking to fill a void in the operators where, due to the reliance on technology as above, the ongoing return on investment from RA is not what was expected. But what might this void look like? Firstly, as RA becomes more operationalised into the business, the RA team comprises a greater number of staff whose role is orientated around the RA tool. I’ve mentioned this above already but it leads to a distancing from the real data and business processes and, more particularly, the need to think and challenge conventional ways becomes reduced. This is not unique to RA of course as increased reliance on computing and the automation they provide, means loss of the real experts in a system or process and replacement with defined work instructions that ensure consistency, if perhaps not always quality. You could speculate that this is how RA was able to come into existence in the first place as that level of complete and detailed knowledge held by system owners across the revenue chain was lost. This loss was not just from automation of course but the increased complexity that the automation enabled. The risk from this is that as RA becomes more automated, the room for thinking disappears as reducing cost becomes an increasingly important corporate objective. And so, I expect that we will start to see and hear of an increasing number of examples of RA missing some significant leakage or undertaking poor quality work. In fact, this trend is already evident as I have had vendors indicate to me that when they have done a proof of concept at an operator, they have found leakage that the incumbent RA system missed. By the same measure, operators have spoken to me about an increasing false positive rate, diminishing value of leakages identified and a greater role to alert a potential issue rather than alert, detail and then help in the resolution of these issues. This can only be due to looking for the same leakage day after day, month after month, rather than expanding thinking to look into areas not yet automated.

The last trend I want to comment on is the move from reactive to proactive RA – however that be chosen to be defined. A quote from Fernando Sales (Gerente General de Inteligencia Comercial, Telefonica Venezuela) in a 2009 Hugh Roberts presentation summed this up for me nicely: “the worst thing that I did was to set our [RA] department up as a profit centre – we are still paying the political price for this in our relationships with other business units, particularly IT”. Perhaps the quote does not align to the reactive-proactive issue but on further inspection it suggests to me that the creation of a function predicated around finding and recovering lost revenue can create a short, and even medium term, star but one that burns twice as bright for half the life. As an operator, leakage should reduce over time. Complexity may increase but so should RA operational efficiencies, new products may be launched but so should more effective detection mechanisms, new business models may be introduced but RA should know their own business and where the risks exist. And so, RA that built its business justification on leakage, will find it contributes diminishing returns and so investment becomes more difficult to justify. Looking forward then, I can’t see how any RA function will continue to justify itself on leakage – the question for each operator is how long. And so the move to the “nirvana” of proactive RA, where RA doesn’t have to find loss, it has to prevent it; and as importantly, the prevention of those losses are recognised as tangible and of business value. This is an issue RA must solve.

Against this back drop, it should hardly be surprising then RA people and vendors have sought to reinvent and legitimise themselves in many different ways. This includes aligning to more established functions, extending its remit beyond traditional switch to bill audits, moving into cost domains, moving from reactive to proactive, supporting transformation efforts and seeking creditability through industry standardisation. This post is not about my view on any of these but it is important to think on the motivation and rationale for any extension beyond traditional RA and understand in what direction, sometimes irreversible, this may take both the individual function and the overall discipline. The risk for RA is that it becomes too tool orientated and too operationalised such that it starts making errors (including errors of omission) while all the time returning less value. RA loses its attention to detail and understanding of the business and so become part of the problem not of the solution. Further the standardisation of RA techniques see the gradual removal of the strategic thinkers from RA teams and to vendors, consultancies, other functions or other industries.

Having forecasted gloom, I believe RA still has the opportunity to add real and lasting value but to do so needs to address the following, and probably within the next 12-24 months:

· Developing software tools that expose data and its treatment to the RA function to ensure the end-to-end process is transparent and understood by RA

· Having the different standards organisations, define RA by the work that needs to be done and not by what the tools that seek to address can do

· Defining “proactive” RA and a value proposition that extends beyond financial measures and ensuring this is communicated and understood at the most senior levels of organisation

· Enhancing the alignment in RA between data integrity activities and process improvement to drive root cause resolution; and using tools and techniques already developed in these areas

· Extension of RA and acceptance of its methodologies across other industries to allow cross industry movement of RA people

· Learning by telco RA of how these challenges are met in other industries and incorporating that into best practices

I’ve recently returned from attending Beacon Event’s 10^th annual Asia Pacific Billing and Revenue Assurance conference in Bangkok. While I’d planned and hoped to provide a daily update, that proved too difficult with an unstable hotel WiFi connection (missed revenue opportunity?) and so this comes to you a day later and 7500 kms away from the conference.

Tony Poulos provided a timely reminder within 10 minutes of the conference start when he spoke of the multi thousand person Billing events that used to be staged at Earl’s Court in London in the last 90’s and early 00’s. Of course these incorporated fraud and revenue assurance as well but while those days are long gone, there was a healthy 150 or so people in attendance.

If the agenda reflects what people want to hear and know about, then these are things for us to be aware of:

- why not simplify pricing constructs to minimise the likelihood of revenue loss but also better manage customer experience and prevent bill shock?

- What role should RA have in transformation projects? Everyone, not surprisingly, agreed RA should be involved but its ability to halt a transformation activity if KPIs are not being met was more contentious

- Where should call senders sit in an overall RA strategy?

- Where should RA sit in an organisation and should it be integrated with other functions including fraud, credit management, marketing, product management or extend its remit to business assurance and revenue protection?

- How can RA and billing cooperate more with the traditional enemy of Marketing?

- The increasing importance of analytical support for RA.

- What unique challenges exist for multi play operators, and is the risk of loss from bundling and discounting greater than the risk on a single product line alone?

- What does preventative RA or proactive RA actually look like?

- What does it mean when the customer service group has a lower tolerance for leakage than the RA group?

- Why is prepaid fraud so often overlooked and neglected, despite the significant amount of money sitting on the platform?

Some of these may resonate with you and some may not and, in large part, that comes down to the unique operating environment in which everyone works.