Archive for January, 2009
Israeli revenue management vendor ECtel has announced it is opening new operations in the UK and Singapore. Read the press release here.
The expansion comes at a time where there is renewed evidence of cost-cutting by communication providers. On top of the many stories about job reductions, there are also signs that operators are cutting back on capital expenditure. For example, AT&T have announced they will reduce capex in 2009 by 10-15% compared to 2008. This follows the prediction of ECtel’s CEO, Itzik Weinstein, who said that telcos would be looking to restrict capex during a recent interview with talkRA. In that interview, he promoted ECtel’s new strategy of leveraging its balance sheet to offer alternative, opex-driven, purchasing arrangements to customers, stating that these would represent a growing proportion of sales in 2009. Given that they have the confidence to invest in enhanced local support for their European and AsiaPac markets, it looks like ECtel is putting its money where its mouth is, and going on the offensive to secure and grow market share. Two good questions to mind. First, will geographical expansion lead to increased rewards for ECtel? Second, will rival vendors follow ECtel’s lead, or will they scale back instead? Watch this space to find out.
Posted by: Eric in Opinion
Shakespeare wrote that “brevity is the soul of wit”. My title was brief, but rather blunt, and not very witty. I hope that you will forgive what will be a long post, as I am not in a witty mood. I am in rather a bad mood. Errors on my phone bill have that affect on me. If what I write must be cruel, it is only to be kind.
You need a good nose to smell which businesses have problems. Some businesses have clean operations; they give off little odour, but you really should stick your nose in if you want to be sure. In other businesses you can smell the problems straight away. You may not be able to smell the problem itself, because ingenious businesses mask the smell of something rotten with layers of pretence and formality. They spray themselves in deodorant, instead of cleaning up their act. In my experience, BT stinks. BT stinks of a business that treats customers as an appendage to their business and cashflows, but does a good job of drowning the smell in the perfume of politeness. They have a contemptuous attitude to providing customers with real information. They probably treat their staff the same way, reducing them to automatons driven by a soulless, malfunctioning machine. Unfortunately, the cause of BT’s dismal treatment of customers is painfully easy to diagnose. I can smell the cause. According to my nose, BT are woeful at managing information and ensuring it is correct. Actually, I can think of plenty more reasons why BT stinks, but I will stay focused on the one topic for now. It is not necessary to work for Britain’s incumbent operator to know that BT stinks, you just have to be a BT customer, as I was until recently. The laws of probability make it obvious that I cannot be alone in suffering BT’s failures, though I wonder how many other customer simply trust BT to get things right, and do not notice when they get things wrong.
Mistakes can be a wonderful thing. They are an opportunity for learning. We can all learn from them, but only if we try. When a customer points out a mistake, it is reassuring for the customer to speak to someone who understands why the mistake took place. It is comforting to know they can do something to stop the mistake occurring in future. It makes you feel worse if you speak to someone who has no idea why there is a mistake and can only sympathize with you, as if both customer and customer service representative are two cogs being ground down by a business machine that controls them both. From my experience, BT does not learn from mistakes, it just makes them. Its business grinds the people who work for it and grinds the customers who use its services.
I terminated my BT landline recently, to move to a supplier who offers the same service at a lower price. I have had a history of billing errors with BT. BT overcharged me on the final bill for my broadband services, when I moved to another supplier. After that, for a period of 17 months, I was subject to a peculiar error where BT consistently debited my bank account for a fixed amount less than was stated on the monthly bill, carried the difference forward to the next bill, then failed to debit it correctly once more. As a result, I always keep a very close eye on my BT bills. Of course, I can only talk about errors I spot. There may be others, it is not like I double-check every rate against published guidance or time each call with a stopwatch. My December bill included the line rental for the whole month, although in November I had already ordered the termination of the line which was terminated by December 12th. Though irritating, this was understandable. In January, unsurprisingly, I received a bill with a credit total, reflecting the amount owed by BT to me. The itemization showed the refund for the monthly rental after the line was terminated. However, the bill made no mention of how, or when, I would be reimbursed. I telephoned BT’s Customer Services, and was informed that, unknown to me, a ‘glitch’ had held up the sending of a final bill. Presumably it was lucky that I called, and that no final bill or refund would have been provided if I had not. The Customer Services representative said they had resolved the glitch whilst talking to me, and that a final bill and cheque would be sent to me shortly. Given that the line had been terminated, and I was not making any more calls, I naively assumed that the ‘final’ bill would state exactly the same credit balance as my January bill. It did not.
On January 4th, my bill said that BT owed UK£6.61 (US$9.58) to me. My final bill, of January 15th, said I owed UK£7.84 (US$11.37) to BT. What was the reason for the difference? The itemization of the ‘final’ bill of January 15 only contained one item: a ‘brought forward’ balance of £7.84 from January 5th. Remarkable. Somewhere between January 4th and January 5th, BT had magically applied an extra UK£14.45 (US$20.95) charge, but did not trouble to explain that charge on any bill they actually sent. That is not why I would call an impressive approach to billing accuracy or customer service. So I called Customer Services, as you might expect. That involved ten minutes on hold waiting to speak to someone, and ten minutes on hold whilst that someone investigated what was happening with my bill. The Customer Services representative had just come back on the line and was saying something along the lines of “I just looked at your balance and the reason for the charge is…” when the line went dead. Hmmm. So I called Customer Services again. That involved another ten minutes on hold waiting to speak to someone, and another ten minutes on hold whilst that someone investigated what was happening with my bill. Fortunately, when they concluded this second investigation, the line did not go dead.
Now, my guess is that if you are still reading this, you want to know why there was an error on my bill. So do I. I am not sure if the person in BT’s Customer Services wanted to know. It is hard to tell. I think they wanted to know, but they did not know. They just knew it was wrong. That is all. No more explanation. They agreed it was wrong, but did not know why. In short, they knew no more than I did. They had no more information than I could get from looking at my bills, whether paper or on-line. To avoid any confusion, I made it clear I wanted to know what had caused the error. Apart from blaming ‘the system’, the poor individual working for BT’s Customer Service was unable to answer. Nothing on their screen could explain the numbers. They had no idea what went wrong, no explanation for the numbers. All they could do was what anybody would do in that situation – say sorry, take a fatalistic approach of blaming it on mysterious forces outside of their control or understanding, and promise that I would not be charged. Of course, the problem with promises like that is you cannot inspire confidence that the promise will be kept, if you have no idea how BT keeps, or breaks, it promises in general.
Where does this leave me? Still checking my bills. Now I have to wait for another ‘final’ bill, which hopefully will be correct in a way that the previous ‘final’ bill was not. I also need to check my bank balance, as I was told that the money owed to me would be transferred into my bank account. I half expect they may help themselves to more of my money instead. During my last call, I asked the Customer Services representative why the money was going to transferred into the bank account instead of being sent by cheque. She asked if I would prefer a cheque. No, I would not, it was just that when I originally called, I was told I would get a cheque, not a bank transfer. There you have two different Customer Services staff being trained to say two different things, which is also troubling to any customer that just wants to know what BT is doing with their money. From my past experience of BT, I would not be surprised if there were more calls to Customer Services, and more of my time wasted checking bills before this saga is over. And what is the saga about? Sending a bill with the right number on it. Something that BT, like any telco, should do as a matter of course.
As you might guess, I am the kind of person who checks my bills. I check my bills from all my suppliers, and in my personal experience, BT are not the only retail supplier who have made a mistake with a bill. The reason why I would single out BT is that they keep making mistakes and transparently have no idea why and have no way to do anything about them. They got my broadband bill wrong, and did not know why. I chased them, they agreed they were in the wrong (or at least did not argue the point), they refunded me the money, but BT did not know why they made a mistake. After that, BT debited my bank account with the wrong charge for twenty consecutive months, and never did collect it correctly. Because that error was in my favour, I did not chase them about it. Presumably they never knew there was a mistake. Now, BT has overcharged me again, and I cannot even guess at the cause. I feel sorry for the poor person, sat in an Indian call centre, who had to deal with my call. It is not her fault that ‘the system’ makes mistakes, not her fault that I am a disgruntled customer. She is sat on the front line, trying to deal with the bloody mess and chaos, whilst the generals sit well back from the field of conflict and have no idea what is going on. BT is in the communications business, but you can be sure that the poor Customer Services representative has no way to communicate the problems she finds and faces to anyone in that company who will listen or do anything about it. If she can only talk vaguely about ‘the system’ to me, you can be sure there is nobody she can talk to in BT about what is wrong with ‘the system’.
In this world, there are people who learn from their mistakes, and people who do not. Learning from your mistakes helps you to avoid them in future. What is true of people is also true of businesses. Businesses that learn from mistakes can change. Businesses that do not learn keep repeating them. Of course, the wonderful about not learning from your mistakes, is that if you pretend you never made them, then you do not feel the need to change. That is what the BT generals are doing. They never hear about errors, so never need to fix them. I imagine they think they are doing a good job. I imagine they think they are ‘world-class’, ‘world-leading’ and all that other tosh that people just assume because they are British, as if the British were inherently superior to lots of other nations. They are like dinosaurs. They are so big they will survive no matter how inefficient they are – unless something really catastrophic happens to the world. Perhaps we need more economic crises to help change the pecking order and force people to revisit their assumptions about how things get done. In recent years, many aspects of telco service delivery have seen developing nation operators leapfrogging their established peers. Suppliers are never rude enough to say that, because they inevitably make the most money from the richest countries, but I am rude enough to say it. There is no reason why telcos in other nations cannot also leapfrog the old dogs like BT when it comes to managing and running their BSS, or providing Customer Service. Brits are no better or worse than any other nationality, so it is silly to assume BT is world-class in everything it does, just because it is BT. It is not just silly, it is casual. That casual attitude breeds carelessness and contempt, and ultimately that is what I smell from BT.
The masking smell of perfume is nothing new for British billing accuracy. British telcos have long trumpeted how accurate their bills are – supposedly more accurate than any other nation’s, although telcos use the same systems all over the world. Somebody once leaked to me an internal memo from one British telco. It said they had serious problems with integrity and needed to resolve them. It went on to say they needed to put their money where there mouth was, and spend it on recruiting new people to clean up the mess. The same week, I heard some fool blather on in public how an earlier audit had proven the effectiveness of the controls over integrity in that very same telco. Some audit. At least in that telco, management could smell what was rotten. From my experience, controls over billing accuracy are a custom more honoured in the breach than the observance. My prediction for 2009 is that British telcos – with BT in the vanguard – will come up with a proposal for another so-called ‘world-class’ solution to enhance billing accuracy for British retail customers. Whilst doing so, they will skip over the fact that, for many years, they have already made claim to have world-beating levels of bill accuracy, begging the question of why they need further investment in this area. The idea will be to spend a lot of time and money on building a big database to reconcile the difference between BT and other British providers. Forgive me if I am not optimistic that this would actually make life better for ordinary customers. If companies already have cultural and communication problems with finding what is wrong with their systems, and doing anything about them, if companies have problems implementing systems correctly in the first place, then implementing more and more systems will not help. The dinosaurs need to change, not grow bigger. Their evolution needs to go down a different path, not compound their weaknesses by repeating them. Finding discrepancies is a futile act, if you do not know what to do about them. Of course, you cannot expect the suppliers of the database, or anyone hoping to get a job from running it, to point that out. You do not need even need databases to find discrepancies. Anybody can find a discrepancy. I did, by comparing one bill to the last. One said minus 6.61, carry it forward. The next said plus 7.84, brought forward. A pretty easy discrepancy to spot, I hope you will agree. But nobody in BT is going to do anything about it, except to reverse the error, say sorry, and hope it never happens again. Finding fault is not the key to accurate billing. Finding a way to change is the key to accurate billing. Anything else is just spraying perfume to hide the bad smells.
I can already hear what some people are saying about this article, even before I publish it. “You know that Priezkalns, always banging on about billing accuracy, always creating scare stories, always exaggerating…” I am not exaggerating. A lie is a lie, whether told in words or statistics. Why should I keep quiet about these failings, as many people say I should? There are plenty enough people who keep quiet about every mistake already. Somebody needs to spell out the facts, although the facts, when seen clearly, speak for themselves. Do the maths yourself. Take the probability that BT makes billing errors, at least according to what BT and its auditors say. Compare that to the errors I personally have seen on my own domestic bills. If BT bills are really as accurate as publicly promised, then my personal experience of BT billing errors would have to be a fantastic improbability. Then think that those errors were not just suffered by somebody, by any of the millions of BT customers. These BT errors were suffered by the one person who is willing to publicly state that British billing accuracy is not what it pretends to be, the one person with a website dedicated to such topics, the one person who questioned the legitimacy of BT’s ridiculous and short-lived pretensions to run a ‘World RA Forum‘. Coincidence? BT’s bad luck? I do not think so. Do you?
The casualties of poor data, and poor service, are on the front line, far from the general’s nostrils. If the generals lack interest, lack knowledge, and lack know-how to correct their own ‘system’, that narrows the options for anyone who wants to make a change and wants things better. Perhaps the generals are let down by their officers. Perhaps the officers are not telling them the truth of what is happening all along the battle lines. Perhaps the officers are too scared to tell the truth. Perhaps the officers are ignorant too. How BT changes its culture is not for me to decide. But in 2009, forgive me if I fail to get excited by any big news stories about new systems to fix BT’s failings, when what BT needs is a new culture. If nobody can change the organization, the only people who can make a change are the customers. They can change their supplier. I did. Of course, if they are all as bad as each other, that is not much of a choice. Something is rotten in the state of billing accuracy. We, as an industry, need to speak up and clean it up. We must follow our own consciences. Our job is to deliver accurate bills to our customers. I commend you to remember another line from Shakespeare, “this above all: to thine own self, be true”.
Podcast: Play in new window
For podcast 3, I talked with old friend Dr. Gadi Solotorevsky. Gadi is the Chief Scientist for software vendor cVidya, and has led the Revenue Assurance team in the TM Forum since it formed in 2004.
As always with our conversations, we soon found ourselves talking about a wide range of topics, including Gadi’s views on the need for professional certification for revenue assurance, the relationship between the Global Revenue Assurance Professional’s Association (GRAPA) and the TMF, and the outlook for the future. You can read snippets below, but the for the full 40-minute interview, listen to the podcast, which is available at both talkRA.com and at iTunes.
We started by talking about the current focus for his RA team: the RA maturity benchmark. Quite a number of Communication Providers have given permission to publicly confirm their participation in the study, including Swisscom, Turkcell, 1&1 Germany, MTS Russia, Vodafone Germany and Telstra. There is still time to join the RA maturity benchmark; if you would like to participate, you can contact Gadi, me or the TMF’s benchmark coordinator, Toni Graham (firstname.lastname@example.org).
Eric: Can you tell us what this revenue assurance maturity benchmark is about?
Gadi: About six months ago, we did a benchmark on KPI’s – standard KPI’s defined by the TMF. KPI’s give a picture, but it’s very difficult to understand that picture if you don’t have a reference of maturity. Just looking at the KPI’s gives only a partial picture. The maturity model gives you not just a benchmark, but the capacity to see what should be your next steps. Together with the KPI’s benchmark, I think it will be a lot of value to the industry.
Eric: Who is allowed to participate in these TM Forum surveys?
Gadi: All the operators that are members of the TMF are allowed to participate for free. Apart from that, since these surveys are relatively new, the TMF is allowing, under special permissions, the participation of operators that are not members of the TMF. For the revenue assurance KPI’s, all the operators that requested to participate, even if they were not members of the TMF, were allowed to do it.
Eric: In terms of the numbers of participants, can you tell us how many participated in the operational KPI’s survey? And how many want to participate in this new maturity survey?
Gadi: For the operational KPI’s we had 14 participants, and for the maturity benchmark the situation is even better. We expect to have 30 to 40 participants. More than two thirds of the participants are TMF members.
Eric: How long does this survey run for?
Gadi: The survey is running now. We opened the web interface at the beginning of December and we are planning to close it around the end of January. Even companies that are hearing about this survey just now, they still have enough time.
Eric: From what you’re saying, even if you decided quite late to join the survey late, it would only take a day or two to get your answers together and submit them. The maturity benchmark is one thing that is going on – what else does the TMF team have planned for 2009?
Gadi: Wow! A lot of things! First, we are in the process of finishing the TMF member’s review for the RFI/RFP addendum [to the RA guidebook]. I think it will be released in about one month. We are finishing the release of version 2 of GB941…
Eric: … the TM Forum’s revenue assurance guidebook…
Gadi: … we expect to release it in about two months. Another thing we are planning to do, is to check the relation between revenue assurance and margin assurance. We are planning to do a catalyst [an official, practical case study]. One new topic, I don’t know if the team will approve it, but I want to try to do a third benchmark. One of the addendums we are releasing to GB941 is a list of control points – typical leakage points where it is a good place to put controls. We finalized a list of 120 control points. It would be really interesting to complement the first two benchmarks, the maturity and the operational KPI’s, with a control coverage benchmark. At the moment, it’s just an idea that I have. I still have to convince the team to accept it. I still have to convince the TMF to accept it, but I believe if we have these three benchmarks, it will not be 1+1+1=3, but it will be much more than 3!
Eric: That sounds like a very full program of work!
Gadi: Actually it’s a lot of work, and we have a lot of great people helping. I don’t want to start mentioning names, because I’m afraid that I will forget a lot of the people helping. It’s very collaborative work with a lot of people – vendors, system integrators, operators – contributing, producing or viewing material, or participating in activities. My job is to set the conference calls and to try to help people.
Eric: I think you’re being very modest. You do an awful lot more than that!
Gadi: Well thanks!
Eric: (Laughs) I don’t think the team would be where it is today if it hadn’t been for all your hard work.
Gadi: Now I’m completely red, so I’m very happy I don’t have a webcam!
Eric: Talking about people in the public eye, with regard to revenue assurance, I don’t know if you saw an article written by the President of the Golbal Revenue Assurance Professional’s Association about the relationship between his organization and the TMF’s work. It briefly said the TMF’s RA team is focused on software, equipment and hardware, because it’s mostly run by vendors, whereas his organization, GRAPA, is interested in what people do, and helping revenue assurance people to learn the skills that they need to do their jobs. Would you say that was a fair representation of the difference between what your team does and what GRAPA seeks to do?
Podcast: Play in new window
One of the reasons for starting talkRA was to share some of the fascinating conversations I find myself having with people from across the revenue assurance sector. For talkRA podcast number 2, I was fortunate enough to speak with Itzik Weinstein, President & CEO of Israeli vendor ECtel. ECtel sells revenue management solutions to communications providers and is listed on the Nasdaq stock exchange. Ahead of the announcement of ECtel’s year end results, we talked about what Itzik thought about 2008 and his predictions for 2009. Because of the global economic crisis, ECtel have seen their share price fall from nearly US$3 at the start of 2008 to around half a dollar by the end. This, rather unusually, means that the assets on ECtel’s balance sheet have a higher value than its stock market capitalization. Irrespective of the bad news in the stock markets, ECtel’s announcements have continued to be positive. You can look at the text below for an abridged transcript of my conversation with Itzik. To get the full 30-minute interview, you need to listen to the podcast, available from both talkRA.com and iTunes. It proved to be a revealing conversation. Ahead of the release of ECtel’s year end results, I began by asking Itzik how good 2008 had been for business.
Eric: Thank you very much for your time, Itzik, today. How satisfied are you with the performance of ECtel over the year?
Itzik: Last year was a bit of a strange year for our industry. What we found was that deals are dragged [out] more than usual. It takes longer to close. Still, we are happy with the results. Deals that took longer to get to closure, longer than we are used to, still were closed. We got the business that we were looking for. We feel okay, taking into account the crisis out there – we got into the lower half of our guidance. This was a good year for us, although we see the difficulties to close deals… budgets were allocated at the beginning of the year but were frozen or pushed to next year.
Eric: Do you think budgets will stay at a similar level next year?
Firstly, happy new year to all talkRA readers. I hope 2009 will be a beneficial one for you.
RA practioners have many options to extend their analysis and assist their companies. If we look at “leakage” and, you will have to accept my definition, that it is about identifying where business rules have not been properly implemented, resulting in an undercharge to the customer and subsequent lost revenue. This could include all manner of things – call records being lost, rating errors, discounts incorrectly applied, provision of services in the network but not in the billing system etc. Many of us continue to have enough work validating just these areas but do we know the marginal return from working in these areas as opposed to spending our time and resource elsewhere?
If you return to my simple definition of leakage, then this can be applied to other areas of the business beyond the traditional call/event flow, billing and provisioning processes. What other business processes may be leading to leakage? Top of mind for me is the giving of credit adjustments to customers and understanding to what extent these are appropriate or otherwise. Don’t think just fraud here either but whether the customer was entitled to a credit and also whether the amount given was appropriate. Another potential area surrounds the charging of fees – if there is need for manual intervention then there is a risk that this won’t be fully charged. This could be any fee for anything that is charged a fee for and so would be unique to the rules of each service provider. These are but two examples and I am sure you would all know of more.
If I can return to the leakage definition, it is focussed on business rules being correctly implemented. RA should look at these rules to see if they make sense in the first place. The classic example is the hyper short duration calls that came out of the fraud world. Numerous short calls are made to premium numbers – the duration is below a threshold for retail billing and so is discarded but is of sufficient duration for the premium service provider to expect payment. I am sure you can guess the rest. In this case, the business rule of discarding these short duration retail calls is not beneficial to the service provider and rules should be changed (either in the retail billing or content settlement system) to close this gap. But what other business rules may exist throughout processes and systems that were, in all likelihood defined years ago for a now, unknown reason, and are not optimal. Find some of these, make the case for a business rule change and RA is not just ensuring all entitled revenue is being billed and charged for, it is also growing revenue.