Billion dollar outsourcing of telecoms services to India. BT’s deal with Tech Mahindra is the first of many as the global shift in the telco power moves eastwards from the US and Europe to India and China. What does this mean for revenue assurance? Expect it to move in the same direction….
Archive for December, 2006
It looks like Christmas has not interrupted the wave of consolidation taking place in the revenue assurance industry. Rumours about niche UK vendor Cartesian being targeted have been shown to be true. The hot news is that management consultancy TMNG have bought out the outstanding shares in a deal currently worth US$7.3m but which may net Cartesian’s current owners another US$7.8m if they meet revenue and earnings targets over the next 4 years. However, you have to assume the growth targets will be pretty challenging given that Cartesian’s revenue for the year ending November was US$12.5m.
Doubtless TMNG, headquartered in Kansas, will spend 2007 trying to broaden sales to Cartesian’s existing European client list, as well as aiming to sell Cartesian’s software to customers of TMNG’s consulting services. And it may not be too miserable a Christmas for Cartesian’s London-based staff, who are said not to be facing job cuts, despite the international trend towards relocating software development and similar jobs to lower-cost countries. See here for the official press release on TMNG’s site, containing the usual quotes from the top men in TMNG and Cartesian. Interestingly, there is no news yet of the purchase on Cartesian’s recently revamped website, but they can be forgiven for not having anyone in over Christmas.
One question to ponder is where this leaves Cartesian’s revenue assurance “thought leadership” program. Presumably they will have to be wary of being inconsistent with the advice that TMNG already gives customers. It also raises the prospect of a geographical expansion of the predominantly UK-based service providers in Cartesian’s Revenue Assurance Group. Its current face-to-face meeting format makes it easy to get involvement from people wanting to enjoy a free lunch and several drinks at Cartesian’s expense, but puts a severe limit on its aspirations. One outcome may be that the format is altered to include TMNG’s US and overseas clients. (Possibly not – but these are supposed to be people working in the electronic communications industry so shame on them if they do not try). I have a topic of discussion that would get everyone involved. Their first debate can be about the assumption stated in this article that the Europeans are ahead of the US in their adoption of revenue assurance ;)
Regulators are very good at ensuring that money is wasted and that bad people profit from complicated and ill-conceived rules that supposedly benefit society. In the US, the FCC has been responsible for an incredibly complicated regulatory environment, which has enabled rather than prevented the problem of “phantom traffic”. Networks that carry phantom traffic find themselves unable to bill it because of gaps in the labelling of traffic. A lot of phantom traffic would be billable if the network carrying it just had simple additional data like the calling and called party. There is also much more than a suspicion that unscrupulous telcos are deliberately manipulating data to avoid being billed for traffic. So it is interesting to see that the telco industry can sometimes get its act together and work collectively to push for changes. Take a look at this article in Billing World about an alliance for consistent exchange and management of CDRs in the US. Is this a sign that, even in the US, the telco industry is starting to realise that you can only get the right regulatory framework if you agree the solution first, and involve the regulator second?
Tis the season when retailers hope to make some big bucks. Also, a lot less money is being given to charity. But it makes you feel good inside when it does. I was touched by this story partly because it mentions Sprint/Nextel’s Revenue Assurance department was one of the benefactors. Now that is a bit odd, when you think about it. Why just the RA department, and not other departments in Sprint/Nextel? And given the kinds of loss suffered by most telcos, was the money given by Sprint/Nextel from its recovered revenues or were the employees giving out of their own pay packets?
Anyhow, this all got me thinking. RA people often moan they lack executive sponsorship, and that it is hard to motivate other parts of the business to take RA seriously. But on the other hand, most big corporations want to be seen to be charitable to raise their profile in the community, get good press etc etc. So is there not an obvious synergy here? Instead of RA trying to persuade the CFO to do a risk-reward deal with some sleazy software vendor, why not link revenue recovered and cost efficiencies to charitable giving? Then everybody in the business has added motivation to support the cause, and the business gets to buy publicity with money it would never have had otherwise. Even if just 5% of the benefits delivered by RA went to charity, imagine the added returns that would generate. So, all you revenue assurance people, don your red hats and fake beards because now is the time for you to play Santa Claus…
I often get asked about the “rules” for how long a business can take to raise a bill after the date when the service was provided. Laws and regulations vary from country to country and also depend on the kind of service being billed for. But what surprises me about the question is that people would actually want and ask for a rule for something like this. It is as if common sense and a basic understanding of how customers behave is not enough. Rules may be rules, but there is no rule that tells a business how to work out what people can afford to pay and when the risk of bad publicity is simply not worth the value of the bill. Statute is the last thing a sensible business should look at when working out how late it can raise a bill. The laws that I have come across all tend towards the same conclusion:
> laws are usually written to help businesses succeed rather than fail,
> hence rules usually get written that allow bills to be raised very late indeed.
Most rules allow billing so late, in fact, that any normal customer would be very upset at finding how stupid their supplier can be for taking so long to raise a bill, or upset that they eventually got caught and made to pay for something they hoped to get for free, depending on how you look at it. Of course, such customers are right to be upset at their stupid suppliers, though you also have to wonder why simple business logic does not cause businesses to be more thorough in getting everything billed on a timely basis. Obviously there are still many firms that need to improve their revenue assurance.
Anyhow, if you want a great example of just how bad it can get, take a look at this story about an American couple who now owe US$1,600 for a utility back-bill after their supplier forgot to bill them for the last 18 years.