Archive for November, 2008
Posted by: Eric in Opinion
One difficulty with revenue assurance is the preponderance of metaphors that people use when talking about it. These metaphors may help with explaining the purpose of revenue assurance, especially in the absence of good public data to prove the point. However, all metaphors have their limits, and they can also lead to misunderstanding. Take the metaphor of a ‘leak’ for example. Water goes in one end of a pipe, and comes out the other end. Not as much comes out the other end, because some is lost through leaks. Okay, but does this explain leaks caused by errors in rating? If water pipes could have rating errors, you might end up with more water coming out than went in…
Despite this, I am as guilty as anyone of using metaphors. In case you do not believe me, let me introduce you to one of my favourites. J.F. Kennedy said:
The time to repair the roof is when the sun is shining.
If that is true, than an economic downturn should be worst for any telcos that have not already invested in revenue assurance, and less of a trouble to those that have. But I expect most vendors will be thinking the other way around… ‘look the roof is leaking! and it’s pouring with rain! better pay someone to get up there and fix it now!’ I think the problem with JFK’s metaphor is pretty apparent. Any time is a good time to fix the roof. When the rain comes pouring in through your roof, fixing it will be harder, but that does not mean you can afford to sit and wait until the sun is shining again.
That is one way to interpret the metaphor. On that reading, vendors would be roof-menders, and if a telco has not mended their roof already, they had better get a vendor and do it now. But there is another way to apply this metaphor to revenue assurance. Now, I do not know about you, but if I paid someone to fix a roof, I would not expect that the roof still needed fixing on a daily basis forever more. If it did, I would probably argue that the roof had not been fixed properly to begin with. If the roof was fixed, there would be no leaks. I could sit snug and warm and dry, and not worry about it. I would not be walking around my house, looking up at the ceiling, and saying “where is the next leak going to come from?” I would not look up, find a leak, put a pan underneath to collect the drops, and start commenting to my family: “look at all this water we have collected – what a victory for our anti-leakage program!” In short, if you fix the roof properly, the job is at an end, and you can stop worrying. There is no ongoing benefit, because there are no more leaks. You would not employ a team of people to keep looking up at the roof, ready to raise the alarm and run with a pan to recover the rainwater.
If we stick to this second way of interpreting the phrase, what would fixing the roof mean? It would mean building (or re-building) the roof so nothing went wrong. It does not mean waiting to see if something goes wrong, but spending a lot of time and money trying to deal with the consequences. A leak is, purely and simply, a mistake. Fixing the roof thus means having a business which does not make mistakes. Its decision-making processes are lined up correctly, just like the tiles on a roof should be lined up correctly. Each decision fits the needs of the business. Whether a big decision (how should we price this new product?), or a small decision (where does the decimal point go in this new rate to be implemented?), the right decision is made. People take care to avoid mistakes, just like the roofer is careful to ensure the roof will not leak. Because individual people may not be reliable, you ensure the way they work is designed to avoid mistakes. That is what fixing the roof means to me – but it has nothing to do with what the vendors sell.
This week I read a news story about how obese people wasted a lot of money on products that misleadingly promise to help them lose weight, but which do no such thing. That got me thinking. There is a simple reason why the pharmaceutical industry is always looking for drugs to solve every problem that a person can have. Drugs can obviously be monetized. Whether the patient pays, or their insurance pays, or a taxpayer pays, then somebody pays for every single pill. In contrast, prevention is not easily monetized. It is harder to make money from telling people to take some exercise, eat well, and take care of their body. It is easier to make money by waiting until people get sick and then stuffing them full of drugs. On the flip side, insurance firms and healthcare services recognize that they will spend a lot less money if people try to be healthy, and spend a lot more money if they do nothing about it. It is worth remembering that big tobacco in the US was eventually forced to admit the consequences of smoking because individual states had pursued them with huge bills for healthcare costs.
Here comes another one of my favourite metaphors, and this one is especially for the revenue assurance industry. Health is wealth, and plugs are drugs. A healthy business is a wealthy business, because the fundamentals of operations are sound. Mistakes are not made, so money is not lost. The job of revenue assurance in these companies is to promote health, by promoting prevention as superior to cure. On the other hand, plugs are drugs. Leaks are a symptom, so plugging them gives instant relief. A business that spends all its effort plugging leaks is a business addicted to the drug of fixing a problem, but may do so at the expense of not addressing the underlying causes. The business is sick, but deals with the symptoms of illness, instead of becoming well. The drug is addictive because there is an obvious and measurable benefit. However, life with those benefits is wrongly compared to life without those benefits. That is like persuading a sick man to keep popping pills because he will suffer more without them. Instead, the benefits of popping pills should be compared to the benefits of being healthy. The sick man should also look at the cost of his drugs and change his lifestyle so he does not need them in future. Prevention is better than cure. The question for the revenue assurance industry is which do they prefer to sell – health or cure? Are we trying to make the difficult but virtuous sell of promoting the equivalent of healthy living for telcos? Or are we happy just to push the drugs and make money by exploiting the sick? ;)
Posted by: Eric in Opinion
In my opinion, we have an awesome team of revenue assurance bloggers contributing to talkRA (and I am not just saying that because I am one of them.) In a few short months, we have established our formula for promoting the development of revenue assurance. The team comes from all backgrounds – telcos, vendors, consultants – and from all over the world. Crucially, the authors are doing something very different to anything found elsewhere. Instead of playing safe, the talkRA team is pushing back the boundaries of debate and moving the discipline forward as they do. They say you cannot make an omelette without breaking eggs. If that is true, then this crew are cooking up the future of revenue assurance, and it tastes good.
The talkRA team are masters of their domain. But even a team as strong as talkRA’s will occasionally make room for a new member. I am very excited to announce that Hugh Roberts has agreed to join talkRA. Most of you will know who Hugh is already, but for the rest, let me briefly mention some highlights. Amongst his many roles, Hugh is a seasoned and prolific commentator and journalist, with over 150 articles and 300 public presentations to his name. Hugh is Senior Strategist for Patni Telecoms Consulting, is a Non-Exec Board Member of Teleonto, and is Consultant Director for BSS/OSS and Revenue Management at IIR, the conference company. As part of this latter role, Hugh serves as Chairman of the World Billing Awards. During his career, Hugh has been a genuine thought leader who has consistently remained ahead of the curve. It is a privilege to have him on the talkRA team.
Posted by: Eric in Opinion
I love the LinkedIn group that Morisso Taieb set up for revenue assurance. However, there is one thing that frustrates me about it. Many of the questions being asked have already been asked – and answered – many times before. There are all sorts of public forums on the internet, and many of the questions seen in Morisso’s LinkedIn group cover well-worn topics like “where should RA be in the organization chart?” and “what is the scope of RA?” which, although good questions, are going to have answers which do not change very often. It seems to me a shame that new answers keep been written from scratch, when good answers already exist somewhere on the internet. Some of these questions have even been answered elsewhere in LinkedIn. Having a forum with questions and answers is one thing, but having some memory for which questions have been asked, and what answers were given, would be a leap forward. Think of it as the Google principle: you can make the world a much better place not just by creating content – much of which will just replicate existing content – but by finding a way to search through the content that already exists.
Where am I going with this? I am not sure entirely. I know that if revenue assurance does not develop a collective memory, it is doomed to ask, and answer, the same questions over and over. For example, if the LinkedIn group remains as it is, there is the danger that, a year down the line, new people will join, asking the same questions as previously answered. This will be boring and frustrating for people who have been active on the forum that whole time. This is one of the challenges for open group activities using the internet – how to integrate new members whilst sustaining old ones. Some just close themselves to new members, or become so wrapped in their own world that nobody new feels welcome or wants to join. Others remain accessible to new members, but at the price of never progressing, which leads older members to lose interest.
I have an analogy for this experience, one that I take from traditional mass media, specifically television. I am British, but I am a fan of two overseas sports: American NFL football, and Japanese sumo. Of course, being British, I am not going to go to the US or Japan just to see sport on a regular basis, so my primary mode of watching these sports is through television. Because they are not familiar in either country, a lot of the specifically British television coverage focuses on introducing and explaining the game to new viewers, which is fine when you are a new viewer… but not when you move beyond that stage, and are wanting more in-depth analysis and news coverage. That is where the frustration begins, as there may not be good alternative resources to turn to. Either you stick with the same introductory-level presentation, or perhaps you try to jump ahead and watch imported coverage, whilst trying to understand the full-fat presentation given to the more sophisticated audiences in the US and Japan respectively. Where this analogy breaks down is that, for my sports watching, at least those really advanced resources exist somewhere on the planet. That is not the case for revenue assurance. The RA community needs to build them first, and its best chance of doing so is to not get stuck in an interminable loop of introductory debates.
So what is the solution? I am not sure. Perhaps a company like LinkedIn will keep on releasing more functionality, and that will help to solve the problem. I could suggest that talkRA becomes a broader resource, but going beyond the existing search and archive functionality will be a lot more work. I am conscious of the extra effort it would take to aggregate answers from a wider collection of sources. Whoever does tackle this problem, will either be in a closed group and hence there will be limited visibility of what they are doing, or they will face problems with spam. Let us not forget that Papa GRAPA Rob Mattison spammed the Wikipedia page on revenue assurance to the point where it had to be ripped down permanently by Wikipedia’s administrators. Another problem is covering the cost of the effort involved in maintaining and managing any collective resource. Wikipedia depends on donations and goodwill from volunteers. A similar resource for a commercial study like revenue assurance will inevitably tempt people to manipulate it for gain, and even fair and reasonable advertising for any given vendor will likely discourage involvement from anybody representing a rival company.
So there you have it. I have posed a problem – how to generate a memory for revenue assurance – for which I have no answers. Anyone care to make a suggestion? I promise, whatever answers you give, I will not let them be forgotten ;)
This post is not so much a commentary but more a call out for some assistance.
Imagine that your telco has 1,000 corporate customers, all with individually negotiated tariffs across the full set of products and services you provide. The details reside in multiple contracts and variations with discounting provided at many different levels – service, product, account, location – all dependent on what is negotiated with the customer. This has resulted in a mix of standard and customised pricing structures and solutions within the billing environment to meet the contractural obligations for charging.
Now imagine, you are asked to provide revenue assurance validation over these customers to state that there is neither over nor undercharge or, if there is, to identify it precisely so it can be addressed. One way is to extract the bills, extract each contract and then compare the billing system output with what is expected based on the contract. However, this is often a cumbersome process that takes time and effort and, due to the individual nature of each contract, there is very little room to extrapolate the findings from one customer across to all.
My question is, how would you go about providing revenue assurance in this instance?
I guess in a way I repeat myself. I admit I cannot help it. Returning just a couple of days ago from the US, and experiencing the impact of the financial crisis, is beyond any impression I can get from media reports and commentaries.
The US; a small town in Florida. A meeting on a Monday morning. An agenda, open issues, action items and all those mundane topics which you find in every meeting. However this time it was somewhat different. This time you see the faces of people that, instead going into through the listed issues, simply don’t care about the agenda. Instead, they discuss, in length, the breaking news of the morning: layoffs of 53,000 Citibank employees. Later that day, nobody was sure how to comment when CNN reported that, for the first time in its history, GM had stopped paying its dealers due to cash shortages. The gravity of the situation now leaves little room for imagination.
My personal view is that this crisis is far from reaching its bottom. Americans have maybe started to understand the scale of it, but there is still a long way to go before they fully comprehend. They still drive huge cars (by the standards of the rest of the world), care little about energy and do almost nothing about switching to sustainable energy sources. Nobody seems to be installing solar panels on the roofs of the houses in sunny Florida. The American car industry, which is one of the prime pillars of the American economy, is doing badly. American cars are sold mainly in the US and fail in international markets, because of their size, mediocre reliability and rather unappealing design. In California, the prevailing cars are no longer American-made. Korean, Japanese, and German manufacturers have taken their place. The American car manufacturers must understand what has gone wrong, or else they will suffer the same fate as the British automobile industry, which received generous government aid and ended by being sold for less then the value of its debts.
Meanwhile, the average white collar, middle class American is still overly concerned with the cost of a cup of cappuccino at Starbucks. On average, they spend $1200 a year on Starbucks’ hot water and coffee beans. Until they change their priorities, the effects of any economic stimulus will not radiate across the whole economy. At least this is my view. So far, no financial magazine expressed any interest in these views of mine…
However, along the same lines, all telcos and vendors are lowering their revenue forecasts. Sprint announced a new package – everything for $99.99/month. No small print. Unlimited everything – calls, SMS, MMS and data. I guess Sprint will soon be joined by others in the race to offer the best “eat as much as you can” offers.
The papers, any papers, even in a small town in Florida are filled with advice – on how to promote your value within your corporation. They are all full of recommendations on how to be a ‘big picture’ person, on how to justify your job, on how to… yada yada…
Where does revenue assurance fit into this new world order? In my previous blog I discussed the role of RA and where it stops. I’m afraid it was indeed a bedtime story. I would like to challenge the RA managers and ask them how they wish to justify their job when telcos start to adopt an ISP mentality and offer unlimited bundles of everything. What is the cost of the marketers offer? I hope someone did the “fear-greed” analysis prior to launch. Needless to say, I hope it was the RA manager that took up the challenge and questioned the level of profitability in front of the Board of Directors. Otherwise, unless I am missing something, why would anyone see a need for RA in this new régime? I sincerely hope that RA managers can reinvent themselves, and remain relevant.