Archive for February, 2008

There are still many telcos who buy revenue assurance software without proving that the software can be made to work (and deliver some value) first. No matter how rigorous a competitive tender process is, there is no substitute for a proof of concept. Any reliable vendor will be happy to show that their product really can be made to work for the potential customer. Although the software will be implemented for only a limited scenario and for a limited period of time, there is no better way to confirm the effectiveness of the revenue assurance product. It also shows that the vendor’s staff have the necessary technical and management skills to realize success. Best of all, it gives the customer an insight into what the eventual financial benefits will be. But a proof of concept is not just of benefit to the customer. A proof of concept also helps the vendor. It gives the vendor a heads-up on how easy it will be to work with the customer’s staff and to integrate systems in practice. Telco staff who are unhelpful, or who have limited knowledge, will probably lead to a more extended deployment project, pushing the vendor’s costs up. Good vendors have no reason to resist delivering a proof of concept prior to signing a deal; only poor vendors will want to rush to the sale and avoid a proof of concept. My old mate Guy Howie of BIAAS has been working double-time recently, backing up my thesis that good vendors will want to validate their product through a proof of concept. BIAAS has completed twelve – a round dozen – proofs of concept in recent weeks. At that rate, it cannot be long before the rest of us have nothing left to prove… ;)

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The problem with online forums is that most people do not treat them like forums for discussion. Instead, they treat them as a free way to get somebody else to do their work/thinking for them. For every hundred people who ask a question, there is maybe one person who has both the knowledge and inclination to answer a question, which leads to rather one-sided discussion. You know the kind of thing: “can anyone advise how to do such and such?”; “we are doing this project, can anybody send me documents of similar project they did?”; and “please send me any work you have done so I can give you no credit and pretend to my boss that I did it in order to secure a pay rise”. One suspects that the Romans would not have had much of an empire if the discussions at the Roman Forum had been so lackluster.

One-sided conversations tend to be the problem if people are expected to take time answering questions out of sheer generosity. If, however, the person answering the questions is being paid to do so, you can expect there to be a lot more answers. Why pay someone to answer questions? One good reason would be to strengthen the relationship between a vendor and its customers. For “strengthen the relationship” you may also substitute the words “reduce the risk that the customer will look – and pay – for advice from elsewhere”. Which must be exactly the thinking behind Subex’s latest venture: an online forum for its users.

Subex has announced they will launch their user forum in March. Doubtless the forum will be a cost-effective way of dealing with queries about how to use their software, reducing some of the burden of dealing with telephone inquiries. But it is also a great way of persuading customers to turn to Subex for any other advice they may need, even if it does not relate to software they have already purchased. Any software business knows that whilst revenues for software might be high and relatively predictable, you can really boost margins by adding some consulting sales on top. Of course, customers are wary of getting advice from people with a reason to recommend more software as the solution to every problem. But Subex can guess that for every hundred questions they answer, one will evolve into a consulting sale. If the money goes to Subex, and not to another firm, then the forum will be a smart way to augment their business. My money says you can anticipate that other vendors will soon follow Subex’s lead by setting up their own forums.

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As well as discussing telecoms revenue assurance, I seem to have an occasional series of posts about how revenue assurance has become a phrase used to represent similar activities in quite different industries. Previous posts have identified airlines, banks and even governments as unexpected converts to the revenue assurance philosophy. Now we can add the oil industry. According to this article from Oil Online, revenue assurance can be applied “from wellhead to sales points”. I guess that might be the oil equivalent of from switch to bill… ;)

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New billing systems, incorrect bills. It is a familiar story, across many countries and many industries. Here is yet another example, this time from the water utility in Brunei.

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The UK has spent the last 12 months or so (I lose track because these things take so long) reviewing the UK regulations for billing accuracy. As a result, a regulation that used to be written as a long document looks set to become a regulation written as a very long document. What stands out, though, is not the alterations to the UK approach, which in the end have been minor, but how different the approach of the UK is to almost every other country. In short, intervention to audit and prove metering and billing accuracy is the exception, and not the norm. Furthermore, national regulations for telecoms retail billing accuracy rarely need to be backed by legal force. Germany and India have taken a stance that is based on classic regulatory intervention, of imposing rules because the industry cannot be trusted to manage itself. In contrast, Australia’s approach is based on a cooperative agreement that was created by the industry without waiting for the regulator to prod them into action. In Hong Kong a mandatory regulation lasted just a few years and then was dropped, to be replaced by a completely voluntary code in 2006. The Hong Kong regulator, OFTA, justified this in a statment in December 2005 which said:

“OFTA has been monitoring consumers’ complaints in respect of the services provided by various telecommunications operators and providers… Among the cases that complainants requested OFTA to intervene or investigate, only 15% were related to billing disputes. Further examination revealed that those related to billing and metering inaccuracies occupied only an insignificant portion of these disputes.”

The conclusion seems pretty final. In Hong Kong, mandatory auditing is unnecessary because the number of issues are trivial. In contrast, the UK continues to act like mandatory auditing is essential for customer protection. Hong Kong copied their mandatory code from the UK’s, after taking advice from the UK’s former monopoly auditor for metering and billing, BABT. We are confronted with two improbable scenarios: (1) that both regulators have got the balance right, because UK telcos are inherently bad, and HK telcos are inherently good, or that (2) one of the regulators has got the balance wrong. Given that the UK stands in relative isolation in requiring mandatory audits, and that HK tried mandatory audits but concluded they were not necessary, I think national regulators like the UK’s Ofcom need to do a better job of explaining why regulatory intervention is necessary when other regulators see no need.

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