Archive for March, 2008

Four years ago I chaired the fourth annual Vision in Business conference on “Revenue Assurance and Cost Management in Telecoms”. Obviously I did not do too bad a job, because on Thursday I was once again in London to chair ViB’s eighth annual conference. If the trend continues, I should next be back in the chair at the 2012 event. Perhaps Olympic years are good for me ;) The conference was excellent as it always is, bringing out the great and the good from Europe, the Middle East and Africa. I noticed that the habit of speakers introducing revenue assurance as a “new” practice seemed to have died off completely. There were too many familiar faces around the conference venue, too much experience in the sessions and on the speaker’s platform for people to pretend that revenue assurance is the latest craze. Instead, much of the talk was about how to keep moving forward once the most obvious and immediate goals had been realized. This was refreshing. No business activity ever succeeded by trying to repeat former victories, or less still by just reminding people about them. The revenue assurance sector is not immune from the pressures of the wider telecommunications marketplace. Periods of investment and growth must eventually be followed by periods of consolidation, cash generation and cost cutting. Even if revenue assurance is an activity that telcos turn to later in their growth cycle, that does not mean revenue assurance will keep growing and growing long after the rest of the business has reached a plateau. The pattern for telecommunications in general is being followed by revenue assurance, though revenue assurance lags a few years behind other telecommunications industry sectors. This lag may have confused some people who expect revenue assurance to just keep growing as easily and as quickly as it does when it delivers those first quick wins.

In the developed world, revenue assurance penetration is nearing saturation, growth is slowing, and cost cutting is becoming more important. Focus on growth potential is shifting to the developing world, which largely means reproducing what worked in the developed world, but more efficiently and in a way tailored to regional needs. The implications for revenue assurance cut across all aspects of its work and culture, forcing revenue assurance suppliers, individual practitioners, and telco RA departments to think about the future. With this in mind, I thought the eighth annual ViB conference, and my second time chairing it, was a good opportunity to analyze current trends and make some predictions of how the revenue assurance sector will change in coming years. For those of you who want to read more, you can obtain the slides for my opening remarks at this year’s conference from the downloads page. Even if you disagree with the predictions, I suggest you take a look and decide what you think the outlook for revenue assurance is. Whether you have worked in the field for many years or are new to it, it is important to have a roadplan for how you intend to change in response to the changing marketplace around you. Why is it important? Well, as Deming once put it:

“It is not necessary to change. Survival is not mandatory.”

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In the last blog, I discussed how the Global Revenue Assurance Professionals Association (GRAPA) needed to expand its membership if its stated goals are to become credible. Today, I want to analyze the current approach of GRAPA to building its content and its volunteer base.

GRAPA communications place a clear emphasis on unpaid volunteers contributing content to their peers for free. In this regard, GRAPA is more like a bulletin board than a professional association. Professional associations do not educate their members by allowing anybody, free of charge, to tell everybody else what they personally think is right or wrong. Imagine a situation where doctors or lawyers went to an online exchange and asked questions like “my patient needs open-heart surgery, does anyone have any tips?” or “could someone send me through their notes of how they conducted the prosecution of a suspected murderer?”. Asking questions like that would imply the ‘professional’ asking them was not competent to do their job. And imagine if they then followed the advice they received! I sincerely hope my doctors are properly educated, and do not rely upon freebie tips to get them through the working day…

Whilst GRAPA boasts of over 1000 members, the meaning or status of membership is currently very questionable. It is not normal for anybody to be allowed to join a professional association simply because they have an email address at a telco or a company that may sell a relevant product. That is like obtaining a ‘degree’ from one of those institutions where you send them some money and they send back the certificate. So far GRAPA does not even ask for the money. Currently, anybody could join GRAPA for free, no matter how incompetent they are, and then try to use their membership as a badge of quality. The problem with that is that if anybody can join, then there is no discrimination based on merit. If somebody did get a job or a promotion because they fooled someone into thinking GRAPA membership meant something, and they turned out to be incompetent, that would tarnish the reputation of everyone else in the association. That is why professional bodies that work to promote the interests of their members are exclusive. Not everyone can join, and not everyone who joins is allowed to remain a member. People join by passing examinations and getting references that show they have the necessary working experience. People remain by satisfying ongoing commitments to maintain their education. People who fail to meet those expectations, who are shown to be incompetent or who act unethically are ejected from the association according to its disciplinary procedures. GRAPA’s members, however, have been through no qualification process, have shown no references, and are not subject to any discipline. In a case where one of GRAPA’s committee members sought to obtain free air travel and accommodation from vendors in order to attend a GRAPA event, the response was prompt but weak. GRAPA issued a policy statement that clarified GRAPA is a volunteer organization and not responsible for how its members behave. Real professional associations bar individuals who behave unethically. They do not hide behind an excuse that allows any member to behave any way they like and still remain a member. Until GRAPA has a genuine disciplinary function, and the willingness to discipline its members, then any rotten apples can spoil the reputations of all.

One of the goals of GRAPA is to set standards. This brings us to another problem area for GRAPA, as it tries to be all things to all people. In most professions, the setting of standards is performed by a body distinct from the body that represents professionals. The reason for that is simple. Standards are usually set to protect customers, and have to focus on the customer’s interests. A professional body represents suppliers, and will focus on the supplier’s interests. To do both at the same time leads to a conflict of interest. Standards are needed because they define the product that the customer should receive. This is necessary because customers do not have the expertise to understand the subject area themselves, and hence to determine the competence of the professional or the adequacy of their work. You can employ an accountant or a lawyer without needing to understand accounting standards or legal prescriptions because the standards have already been set by other professionals. The professional body then just has to restrict professional status to those people who can be trusted to comply with the standards. If standard-setting and professional representation is combined, as is the case in GRAPA, the temptation will be to set standards too low, so all suppliers can be said to satisfy those standards. But if all suppliers satisfy the standards, then the standards have no value. Similarly, a professional body needs to eject members that fail to meet the standards in their work, in order to safeguard the reputation and income of professionals who do meet the standards. If, however, the standards are set so low that everyone meets them, are not enforced through a disciplinary mechanism, then they have no value. Standards that are not enforced are just optional guidelines. If standards are just guidance, the companies that employ GRAPA members cannot assume that the standards will be followed in practice. In that case, then there is no benefit to the customer in employing GRAPA members over other people who claim professional status but who are not members of GRAPA. That in turns mean that there is no value in paying membership fees or for qualifications from GRAPA, because it will not lead to increased income for the professional.

It is fair to argue that any professional body needs to start somewhere. That somewhere, for GRAPA at least, is to open the doors to volunteers and hope that they work amongst themselves to agree on the basis of a profession. Let me hence finish by discussing the true extent of volunteer activism in GRAPA. Of the 1000 or so members, how many actively participate? In my first criticism of GRAPA, I argued that GRAPA was in danger of splitting the revenue assurance community into two by including telco employees but excluding all other revenue assurance practitioners. This was not a moral argument; the problem with a policy of exclusion is that, if you are looking for lots of enthusiastic volunteers, then imposing an arbitrary rule on who can be included only serves to limit the number of people who can make a positive contribution. I cited the 1% rule where for every 100 interested but passive onlookers, there will be just 1 volunteer willing to actively contribute. You can refine the 1% rule into the 100:10:1 rule by recognizing that for every 100 interested, 10 may make a small contribution, 1 will make a large contribution. If the 1% rule is correct, then GRAPA’s 1000 members will include just 10 people who make an active and significant contribution. GRAPA does a good job of making its active membership appear as large as possible, by appointing people to all sort of executive and committee positions. However, giving someone a title does not mean they actually do anything of value. Because GRAPA is little more than a website owned by a small company in a small village in Illinois, the best source for objective statistics on GRAPA activism would be from GRAPA’s own internet forums. Here is a summary of the activity on GRAPA’s internet forums using data extracted on 21st March 2008.

  • There are 1107 registered users for the web forums, and the forums include 493 posts.
  • Of the registered users, 339 (30.6%) have so far logged on to the site in 2008, and only 86 (7.8%) have logged on in the first three weeks of March. 375 users (33.9%) last logged on between September and December 2007. There are 393 users (35.5%) who have not logged on for 6 months or longer.
  • 808 (73%) of the people who signed on to register with GRAPA have never logged in again.
  • 89 users (8%) have made one or more forum posts, 1018 (92%) have never posted to the forums.
  • 30 users (2.7%) have made 5 or more posts. 12 users (1.1%) have made 10 or more posts.
  • The most posts by a single user is 56, which represents 11.4% of all posts.
  • The top 10 users have submitted 244 posts, 49.5% of the total.
  • The admin group, which is Rob Mattison, his family and workers, have posted 74 times. President Mattison has made 25 posts to the forum.
  • Committee chairs have made 48 posts between them. Of the 13 committee chairs, 9 have not made a single post. The top contributor of the committee chairs has made 31 posts, which is nearly twice the contribution of all other chairs put together. Only 3 of the chairs have logged on to the forums in 2008. 5 chairs have only logged on once, to submit their initial registration. Several members of GRAPA’s executive committee have their names and photos prominently displayed on GRAPA’s website but have failed to visit the forums for a long time, and were only active for very short periods after their appointment.
  • There are 6 moderators. 4 moderators have never posted. 1 moderator has posted 5 times and the other moderator is the top contributor overall with 56 posts.
  • The 220 commercial members include 44 people who have made a post, and they have submitted a total of 158 posts. 126 commercial members have logged in since the start of 2008.
  • Over three quarters of registrations are from regular telco employees who hold no position within GRAPA, and are misleadingly categorized as “new members”, no matter when they joined. Of this group, only 28 have ever posted. They have submitted 86 posts in total. Only 194 of this group have logged on since the start of the year.

What conclusions can we draw? First, somebody better tell President Mattison he is a long way short of 1000 active members. His newsletters may have introduced “GRAPA’s 1000th member” but the only way you get 1000 members is by including people who visited the site, registered, and never came back. If you restrict the membership count to people who came back a second time, GRAPA has less than 300 members. Apathy is no surprise though, given that plenty of the people listed as committee members and forum moderators seem to be completely inactive as well. Second, the most active group overall are the people President Rob tried to exclude at the beginning: employees of vendors and consultancies. They are much more likely to have submitted a post or to have logged on recently. Third, the 1% rule seems to be holding true. Nearly half of all posts come from the top 1% of users. Less than 10% of registered users have made any kind of active contribution; by “contribution” I am still including all those people who have posted questions but not answers. Finally, the registration list is growing, but very few people stay active for any length of time. Of the 86 users who visited the site in the first 3 weeks of March 2008, 49 of them had first registered in March 2008. More than half of the visits were from people registering for the first time. More and more registrations may give the erroneous impression of a growing membership. Many people who register soon lose interest and never return. Like prepaid mobile customer numbers, there needs to be a cut-off rule when registrations are considered inactive and can no longer be counted as members. For example, of the 117 new registrations in January, only 9 have returned to the site since the start of February. If people do not come back, they should not be described as “members”. GRAPA needs to be more honest and transparent about its claims to represent a profession when the number of active participants is so small.

Numbers and data – they are what revenue assurance is all about. Look past the headlines, and take a look at the numbers and data about GRAPA’s membership. The claims made about GRAPA being a growing professional association composed of active volunteers just do not add up.

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I have not written about the Global Revenue Assurance Professionals Association (GRAPA), Rob Mattison’s sales vehicle, for a while. The reason for that is straightforward: they have not done anything interesting or annoying in quite a while. It seems to me they are moving into cash generation mode, selling training to disparate individuals who do not know of anywhere else to turn. There is nothing surprising about that. Making money was obviously the whole point, although Rob Mattison must be disappointed that so far GRAPA has delivered no return to him other than to promote his pre-existing training courses to a wider audience. Mattison no doubt still intends to introduce fees for membership, run paid conferences and make money from vendor advertising and sponsorship, but is pushing back the timelines because he does not think the market will support it yet. However, he does seem to be ramping up activity at GRAPA. Yet another Mattison family member, plus several others, have been added to the GRAPA payroll. This suggests that 2008 will be a make-or-break year in terms of GRAPA’s financial viability. Either GRAPA generates sufficient revenues to keep that large staff fully employed, or it (discretely) scales back. This raises a question: how many members does GRAPA need to be a viable professional organization?

As of today, GRAPA’s website boasts of 1078 members, and there are 1107 registered users of its forum. Not bad, but not great either. The original policy was that GRAPA was free to telco employees for a limited period, but did not permit people from vendors and consultancies to join. Then they changed the policy to allow people from vendors and consultancies to join, for a price. Then they changed it to allow people from vendors and consultancies to join for free. Meantime, it seems the “limited” free membership period has no end in site. One thousand people may sound like a lot, but to put the interest in telecoms revenue assurance into perspective, the readership of this website since GRAPA was first formed is several times that number.

Now that Mattison Jr. has joined GRAPA as membership czar, the route to expansion is pretty obvious. GRAPA’s current membership is spread across 445 companies. That means GRAPA has less than 3 members per company. I can see that some of the companies are one-man bands, but obviously there are very many which employ anything between 10 to 100 people who should be interested in GRAPA. For whatever reason, word of mouth recommendation has not persuaded other members to join. In fact, it looks like new registrations are driven by random web hits rather than recommendation. That is the only way to explain why the ratio of members to companies has remained so consistent. If word of mouth was driving membership growth, you would expect the number of members to grow far more quickly than the number of companies, as people would recommend GRAPA to their work colleagues first. It is quite damning that existing GRAPA members do not feel like recommending the organization to the people sat working alongside them. Perhaps existing members do recommend GRAPA, but they are not persuasive enough about the benefits to encourage their colleagues to join, even though it is free. This is a serious problem for an organization that claims to represents professionals. If only one person in a twenty-strong revenue assurance team believes that membership is worthwhile, it hardly suggests they have improved their career prospects as a result of joining. Any good marketeer knows that recommendations from friends are the best way to drive growth and sales. It has become a mantra in many telcos. I can see from the web statistics for my own site how small pockets of interest grow by word of mouth. If I post a story that grabs the attention of some people in one company, I often see a very rapid explosion in the number of hits from that part of the world. Not all forms of communication are electronic, and my expectation is that Mattison Jr. will reorient the marketing away from playing with a website and towards fostoring face-to-face recommendations between work colleagues.

Even if Mattison Jr. is successful, GRAPA still has a long way to go before it can be financially viable, never mind deserve the rather pompous “professional” tag it has given itself. if 1000 members generated US$100 in income each, then that might just cover the income of Mattisons senior and junior, never mind the others. If we assume, as is only reasonable, that for every 10 free members there will be only 1 person willing to pay for things, then that person would have to pay GRAPA $1000 per annum just to keep Mattisons senior and junior in food and lodging. That is before making allowances for all those flights around the world to spread the Gospel according to Mattison ;) I suppose there is a good chance that many of the flight costs for Papa Mattison are being covered by conference companies, which suggests he is playing down his previous ambition that GRAPA would run its own conferences in competition with them! I must admit that I cannot tell exactly who is on the GRAPA payroll: the finances of this not-for-profit company incorporated in Illinois, USA, are far from transparent. At various stages there have been at least six people described as working on the GRAPA staff, not counting students hoping to get some work experience. Anyhow, if you assume maybe four or five paid staff, factor in the costs of running an office, maintaining a website, advertising (press releases do not come free) and all the rest you end up needing a turnover of US$500,000 at least. That would suggest GRAPA’s membership needs to grow by a factor of 5 this year, and for every member to contribute on average no less than US$100 in fees or additional sales. Mattison Jr. has a lot of work to do.

All of this begs the question as to how much real interest there is in revenue assurance as a profession. Many people will take up offers if they sound like they will get richer at a small cost. My email inbox is full of them. They are called spam. However, that does not stop seemingly intelligent people paying over their money for “degrees” that do not require any study or the sitting of any examination, or wiring cash to Nigerian bank accounts because they have been selected in a mysterious “lottery”. To put professions into perspective, I did some searching around. It only took me a few minutes to come up with some numbers for a variety of professions:

  • 91,000 practicing attorneys in New York City 2006, New York State Board
  • 42,538 physicians in Romania 2004, Britannica Online
  • 33,000 studying for a master’s degree in engineering in India 2002-3, All India Council for Technical Education
  • 2,277 architects in South Africa 2008, South African Institute of Architects
  • 2,147 Accountants in Papua New Guinea 2007, Certified Practising Accountants of Papua New Guinea

Hmmm. GRAPA needs to add another 1,000 members before it becomes as popular globally as the accounting profession is in Papua New Guinea. Obtaining critical mass for a genuine revenue assurance profession is going to be a problem. In a genuine profession, you pay your fees and you make more money as a result because other people think having the qualification and being in the association has a value. The alternative is that you get one of those huckster qualifications where you pay your money and get a worthless piece of paper with your name on it. Consider also that accountants in Papua New Guinea pay annual fees of K550 (US$182). I do not know anything about the Certified Practising Accountants of Papua New Guinea, but my guess is that those annual fees are spent on maintaining professional standards, ensuring the quality of practitioners, upholding professional discipline, and educating members. GRAPA needs to do the same job if it wants to claim to be a genuine professional association, but so far neither its fees nor its membership is adequate to do that. Making the organization global, and including all practitioners inside and outside telcos does at least ensure it has maximum reach, but I still think there is an open question as to whether there are several thousand revenue assurance practitioners in the world who would be willing to accept the discipline and cost commensurate with professional status. If they can arguably get paid well and enjoy career progression without it, then the prospects are poor.

One way to solve the problem of up-front costs when setting up an organization is to rely upon volunteer enthusiasm. That seems to have been GRAPA’s mantra thus far. In the next post I will dig into the detail of GRAPA’s membership numbers, and answer the question: just how active is GRAPA’s membership?

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Is it me, or has the world gone mad? The US, and hence the rest of the world, is in the midst of stock market chaos. This chaos has been prompted by the stunning realization that lending money to people with no money and limited prospects for earning money may not be a great way to make money, but may well turn out to be a marvellous way to lose money. “Sub-prime” is such an inglorious example of modern diction. Presumably it is only a matter of time before rotten meat is recategorized as “sub-prime foodstuffs” and the comments of lying politicians are described as the “sub-prime truth”. As a consequence of mortgage failures, wholesale banking is being dragged down as well, as banks stop lending to each other for fear that loans may never be repaid. All of this is pushing the price of commodities like gold ever higher, as investors scramble for a safe haven. The idea behind that is that gold is tangible, “real” if you like, in a way that equities or debt could never be. In the midst of this financial mayhem, what news do we hear? Linden Labs, the company behind virtual world Second Life, may be closer to a public stock market listing. Hard to believe, but true nonetheless.

Philip Rosedale, CEO and founder of Linden Labs is to step down and take the role of Chairman, prompting the business to search for a replacement as the business shifts from start-up mode to operational mode (a.k.a. reigning in costs and trying to make more money). Some have commented this is part of a process that will lead to an IPO. Current Linden Labs Chairman Mitch Kapor, who was the founder and fomer CEO of spreadsheet pioneers Lotus, admits that an IPO is “an option under consideration”. Presumably it is only an option because a commercial sale might suit just as well, and be a lot more realistic in a world where markets are going down, not up. However, any kind of sale does make you wonder about the relentless optimism for some kinds of investors. Second Life is not real. It represents what happens when people spend their time making a make-believe world. It has an economy and a currency that can be converted into real-world cash, but the Second Life economy has, in investment-speak, absolutely no fundamentals. Money in Second Life can be taken away or devalued in an instant. People may invest their real-world dollars in virtual real estate or establishing virtual businesses in Second Life, but none of it has any substance. This faith in virtual and intangible worlds that represent a combination of code and human interaction runs contrary to a time where most people are increasingly retrenching in the ever more real and tangible. The mortgage crisis plays on that most primitive of human needs: the need for shelter. No amount of virtual property can substitute for the loss of a real house. In times like these the virtual economists would be wise to keep their real-world ambitions in check.

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Lots of vendors sell lots of software, hardware, databases etc to automate the detection of revenue leakage. A lot fewer products are focused on automating their resolution. But if you never fix the leaks, then the value of finding them is zero.

The trend in recent years is for the sellers of detection tools to throw in some kind of software to manage resolution workflows as a freebie. That is great if you want to get all your tools from one supplier, but not so good if you use a variety of best of breed solutions. Adding resolution doubtless increases the value earned from the tools, and probably helps with both the initial sales pitch and building of customer loyalty afterwards. One of the biggest downsides of integrating resolution into detection tools, is it encourages the revenue assurance team to behave as if the only way to detect leaks is to use automated tools. A little bit of imagination, the right selection of data, and some skills for querying and analyzing that data may be all that is needed to find a leak. Over-dependence on vendors can encourage a team to feel that revenue assurance always begins with an expensive procurement exercise.

One of the reasons not to automate resolution is that it only is cost effective to automate what you intend to do over and over again. Automating the repetitive fixing of very particular faults implies that the root causes of those faults will never be addressed. You could say in such circumstances that the revenue assurance team is institutionalizing leakages. Unfortunately, the business case for fixing a root cause may be harder to make than the business case for addressing the symptoms and leaving the root cause in place. For resolution to be automated effectively, it has to be flexible enough to provide workflows that deal with all kind of faults. Those workflows have to be adapted quickly for every kind of leak, because you do not want to put a lot of time and effort into them. The more time and effort it takes, the harder it is to keep motivation on solving root causes, rather than just symptoms. In the end, revenue assurance has to be about solving all problems faster, not about finding ways to make them last.

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