Archive for the Interviews Category

People keep asking me about Subex, the Indian business assurance vendor, like I should know all about its inner workings. Or rather, they ask like I should know about its inner workings and know if there is any truth to this-or-that rumour which floats around those internet chatrooms for people who talk a lot about share prices. I find this odd. Firstly, I do not work for Subex. Although I try to keep an eye on their business, if they intend to keep a secret hidden in their headquarters in Bangalore, I am unlikely to discover the secret from my vantage point in the UK. Secondly, internet gossip about share prices is about as reliable a source of information as that ubiquitous internet spam which begins by saying: ‘here’s one weird tip to…’ and ends by saying something like ‘…remove all wrinkles from a 90 year old face’ or ‘cut your tax bills in half’ or ‘purchase an iPad for less than $10′. If you take internet chat seriously, then you must be in the wrong line of work. Unless you are following my internet chat, in which case you are a very wise person indeed and you are bound to have a successful career. That is because I only tell you good stuff. And that is because, when I want to find out stuff, I ask people who might know the answers. So I asked Subex CEO Surjeet Singh what he thought about his company’s last set of results, and his objectives for the business over the next few years. Here are some excerpts from our conversation…

Eric: Surjeet, you may remember that I already reviewed Subex’s financial results for last year, so I don’t want to discuss numbers, but I’d really like to know which element of last year’s results pleased you most, and where you feel there is greatest room for improvement.

Surjeet: What made me happy was the 24/25% EBITDA margin we attained. It was vital that we steadied the ship and, as part of the turnaround, rapidly moved to a situation where we demonstrated that Subex is a profitable business. So the EBITDA margin pleased me. Where we need to improve is when we compete for business in Europe. We feel we’re dominant in Asia and the Middle East; during the last 14 months we had seven transactions in that part of the world which were in the three-to-five million dollar range. But in Europe we didn’t win as much as expected.

Eric: what’s holding you back in Europe?

Surjeet: Historically Subex has been weaker in Europe. Subex hadn’t developed the same touchpoints with prospective customers in that region. Also, Subex’s poor results in the past, and rumours about our financial status have had a negative impact in Europe which we haven’t experienced elsewhere. Management has focused on making better in-roads into Europe, and I’ve asked Vinod [Kumar, Subex COO] to be hands-on with this. I think we’ve improved a lot in the interim.

Eric: I get the impression that Subex is feeling more optimistic about growth than it has for a while.

Surjeet: We’re running the business with the future in mind, ensuring we’re financially sound and planning to generate a good return for investors. And we’ve had some good news relating to that: Subex received an investment grade credit rating from Fitch. With the future in mind, we’re putting together an advisory board of industry professionals – including ex-CEOs who know telcos and people like that. They will guide us in terms of development and delivery. And we’re managing money internally like we’re managing an investment portfolio, with three-year targets for each element of the portfolio. That way, we use our money wisely, concentrating on the areas where we pursue growth, and not spreading ourselves too thin, trying to do too many different things.

Eric: Which elements of the portfolio are you investing most heavily in?

Surjeet: We have invested heavily in asset assurance, the management of network capex and opex. You already know how important asset assurance is to us; we’ve invested in making it a success. Analytics is also important to our new portfolio. As for vertical expansion, we’re working on a test bed that will see us develop our products for use in utilities. We preferred to concentrate on utilities rather than financial services companies because we feel it will be easiest to convert our tools for use in utilities.

Eric: The possible downside is that utilities are not known as fast-changing businesses.

Surjeet: No, but they have the cash, and we expect there will be plenty of change in utilities during the coming years. They will want to make use of the data they collect.

Eric: You alluded to targets over a timeframe of the next few years. Can you be more specific?

Surjeet: I want Subex to be earning $100mn revenue annually, with a 25% EBITDA margin, within three years from now.

Eric: Can I quote you on that?

Surjeet: Please do.

Eric: We often talk about managed services as being important to how you’ve changed the revenue profile of your business. Long-term managed service contracts makes your revenues more predictable, and less volatile. Subex has increased the share of revenues from managed services to an extent that rivals have not been able to match. Can you comment on why that is?

Surjeet: Customers want bundling, and they want it to be quick and efficient. Subex reset its own revenue cycle to ensure we can quickly and efficiently bundle products and services, in order to please customers. It’s a very important competitive advantage for us.

Eric: To be clear, I sometimes talk about outsourcing as being one end of the spectrum that is labelled ‘managed services’, but when you talk about Subex supplying managed services, you’re not really talking about outsourcing of revenue assurance and fraud management. However, I admit that I previously predicted there would be more outsourcing by this point in time, and I assumed that Subex would take the lead because it would give your business the deepest ties with your customers, and hence the greatest predictability for your revenues. Am I right in thinking you’re not already an outsourced supplier of revenue assurance and fraud management – in the sense of employing the people who do assurance on behalf of the telco? In other words, you’re bundling hardware with software, but the telco still employs the people who do revenue assurance and fraud management for their business. Is that right? Might that change in future?

Surjeet: You’re right. We don’t currently provide a fully outsourced service for revenue assurance or fraud management. When I talk about bundling, I’m talking about bundling hardware and hosting with the software. However, I think we are on an evolutionary path with our customers. When you’ve provided a bundle of software, hardware and hosting for several years, and you provide that bundle smoothly and efficiently, the customer becomes more open to the option of full outsourcing. Full outsourcing is something I could envisage happening at the level of a telecoms group, and I foresee it will be viable to make such an outsourcing deal in the next year or 18 months. Previously groups have tended to have a variety of fraud management and revenue assurance suppliers across their entities, but we’re reaching a stage where Subex is the supplier to every subsidiary of a group. That makes it far more viable to do outsourcing at group level.

Eric: So you’re suggesting that the trend towards shared service centres in telecoms groups is also a potential enabler for outsourcing? If a group runs a shared service centre for revenue assurance or fraud management, where it’s pooling work done on behalf of all the operating companies, then that lends itself to the possibility of simply outsourcing the work of the shared service centre?

Surjeet: That’s right. We don’t see the trend towards shared service centres as a threat to Subex’s business model, because it also increases the opportunity to outsource. If a group can decide to implement a shared service centre for its revenue assurance and fraud management, it creates a real possibility that they might do a 10-year deal to outsource that function, allowing Subex to take care of every aspect of the function, from the software that is used, to the payroll for the staff who work in that team.

Eric: A 10-year outsourcing deal? So you’re really thinking long-term about Subex’s future revenues.

Surjeet: We’re really thinking that far ahead.

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Some people are comfortable to ask questions, rather than face them.

Not so Eric Priezkalns of talkRA who stepped out of his interviewer status this week and allowed me, Mike Willett, to pose the questions to him – even though he couldn’t resist turning the questions back on me from time to time. When I proposed to Eric that he be the subject of a podcast, he willingly jumped at the opportunity and granted me full access to ask any question I wanted. What I was most interested in, though, was understanding Eric’s career path from accountant to today, to understand the things that influenced and drove him, the areas that have made him who he is today. Love or loathe Eric, I am sure you will find his insights and comments typical of what we have all come to expect of him – forthright, insightful and reflective. Enjoy this opportunity to get to know Eric a little bit better.

You can listen to this interview through your web browser, or download the mp3 file from here. If you want to be sure that you will never miss a talkRA podcast, you can also subscribe to the talkRA podcast via iTunes.

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Open source revenue assurance? It has long been a popular discussion topic in RA circles, but there was only one problem: nobody had actually written any open source code. It was a perennial good idea where everyone was waiting for someone else to do it. Now Lionel Griache, a senior consultant in the billing and revenue assurance industry with more than 15 years of experience, has made the giant leap into offering open source RA code. After 4 years of existence, his ProactiveRA tool has been officially open source since December 2011. I spoke with Lionel to find out about ProactiveRA and why he has chosen the open source model.

Eric: Lionel, writing code takes time, and you’ve released a finished tool as open source. What was the starting point for this project?

Lionel: This project started as a custom development for a client in the Caribbean. It quickly grew and matured, to the point that it received positive reviews from international financial auditors. Its local success is not based on a powerful or secret algorithm, neither on the amount of code written. The tool is simple yet effective; its success can mostly be linked to understanding that, to be embraced, you must have an effective user interface where people can really see what the tool is about and interact with it on a daily basis.

Eric: You mention that the tool was ‘embraced’ by your client. From your perspective, why was that?

Lionel: Incorporating a professional dashboard was the first key to its success. The second key was minimizing the time it takes to deploy new control points and empowering the client to do so. And it worked beyond all expectations.

Eric: That’s great, but there’s going to be a lot of sceptical people who wonder why you’ve offered the code as open source, if it works that well. Why not just retain control and profit by selling licenses?

Lionel: We had many back-and-forth discussions about that with the initial client. What started as an internal project could easily become a golden egg for both of us, sold to other clients and partners, and generate a nice profit. But is that really our business? The answer came to us when we went back to how our relationship started. All this time, our contract wasn’t about building a tool. The core mission was about analysing data, building reports, looking for revenue opportunities and most importantly bringing a new attitude about how to monitor the business. Building the tool was a side activity to support the communication strategy and presentation of the results to management. What had most value for our customer was that someone brought this new attitude and expertise.

Eric: Are you hinting that, whilst open source code sounds exciting, software tools are not the most important part of RA?

Lionel: The source code of the tool is what it is. It helped tremendously in facilitating the daily monitoring but it will never have the value that the willingness to build a strong revenue assurance program can have. We believe this is true in most RA deployments out there, at least for Tiers 2 and Tiers 3 operators were technical challenges induced by data volumes remain easily manageable. The value of the code is minimal compared to the value of understanding and advising on how to perform RA activities. Making the code open source proves that point.

Eric: I think you’ve just become my hero. You’ve donated open source code and you’ve put the value of software into context – compare that to what we get from some so-called industry leaders! But getting back to the code, can you talk a little about how the code was written?

Lionel: The ProactiveRA solution is based on a powerful open source dashboard called Liferay. As we greatly benefited from this third party, it seemed logical to give back to the community under a similar model. Without any doubt the open source economy is extremely empowering. It gives each one of us the opportunity to join forces and build something bigger than we ever could envision on our own. Open source is an undeniable trend in the software industry. We’re betting the RA world is ready to embrace it as well and we’re proud to be pioneers in that regard.

Eric: You mention the client’s support for making the ProactiveRA code open source. What’s in it for them?

Lionel: For our main client, making the tool an open-source solution is also a logical move. By building a community around the tool, you develop contacts and confront your way of addressing revenue assurance requirements with new perspectives and opinions. This is an opportunity to take an internal development to the next level. If a strong community builds around it, it brings the potential for receiving new updates and new features without having to drive all of that internally. This is a benefit that vastly compensates for the risk of losing control over what could remain an internal development. You can focus your internal investments on what really is specific to your architecture. In general, the open source model gives a whole new audience a chance to strongly influence the future of a tool in a way that wouldn’t be achievable with existing RA solutions. There’s incredible value in joining forces and driving a common solution to new levels.

Eric: I’m confident many people will want to download the code as soon as they’ve heard of it. Where can they get it from? And will you be supporting it?

Lionel: It’s available from our website. The site also has instructions on how to install ProactiveRA. Once up and running, we trust people will find the interface is intuitive, and that it’s a useful system that will inspire them to be more ambitious in how they tackle RA. The website also has a form for people who want to contribute or have suggestions, and gives all our contact details. We’ll be glad to answer any questions.

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Dan Baker of B/OSS World interviewed talkRA’s very own Güera Romo for his most recent blog. The two discussed the boundaries of revenue assurance, and Güera was as forthright as ever, drawing on both her academic research and practical experience. You can read the interview here.

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Hanno Allolio was my guest for talkRA podcast 14. Hanno is a founder, partner and Managing Director of Allolio & Konrad, an international consulting business that prides itself on its intelligent approach to satisfying its telco and utility customers.

With his experience of providing data-centric consulting, I was keen to hear what Hanno thinks about the current state of progress in the art of delivering revenue assurance. I also asked Hanno about what comes next, and how telcos compare with utilities. As the boss of a successful independent consultancy, not tied to any vendor, Hanno can talk more freely about the options and challenges for those working in the field of RA. He did so on this podcast.

You can download the mp3 file for this podcast from here or listen to it through the browser player. You can also subscribe to the talkRA podcast for free at the iTunes store.

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