Israeli venture lenders Plenus have arranged a new US$5m credit facility for cVidya, the VC-backed revenue assurance vendors. Look here to see the news from the Plenus website.

Unusually, no mention is made of the credit facility on cVidya’s website. Some in the industry complain that cVidya issue too many press releases, so perhaps this signals a more conservative approach to communicating their business performance. Not surprisingly, that has not stopped them heralding a new ‘multi-million dollar’ sale to South African network MTN. Based on the information published at Globes, the Israeli business daily, the MTN deal will be worth a little over US$2m to cVidya, and comes soon after a US$1m deal with Uruguayan national communications company Antel. See the Globes version of the story here.

The new credit from Plenus is nominally to assist cVidya break into the North American market. cVidya announced the opening of their Chicago office in February 2008. The Chicago office manages all their sales activities in North America. Since the office opened, there has not been any press releases announcing new sales in North America – but perhaps they are keeping quiet about them too ;)

Neural Technologies, the specialist fraud vendors who now position themselves as suppliers of risk management, has been listed amongst the top 100 fastest growing privately-owned British companies. See the press release here.

The news comes not long after Neural acquired mobile VAS provider Prime Creation Technology. How are these two stories to be interpreted? On one hand, profit growth has been strong over the last three years. On the other hand, why move into other sectors, and dilute your base, unless you think that is needed to sustain results? The idea that revenue-generating products are a good fit with leakage-preventing products is questionable. The best justification for leakage prevention is that there may be something wrong with the way revenues are being generated, and it is difficult to stay impartial when you sell products that could be used to check that some of your other products have been implemented correctly. We shall have to see if Neural’s strategy will enable it to continue to improve profits at the same impressive rate. Of course, strong growth followed by diversification can sometimes cause hiccups – just ask Subex.

Cartesian, the UK revenue assurance vendor now owned by US professional services group TMNG Global has won the 2009 Queen’s Award for Enterprise. You can see the press release here and Cartesian’s listing on the awards site here.

The awards are described as “the UK’s most prestigious awards for business performance” and are made by Britain’s Queen on the advice of the British Prime Minister. Cartesian won the award in recognition of its innovative software. That only leaves two questions to resolve. Who from Cartesian will be meeting the Queen at Buckingham Palace? And will they actually talk to her about revenue assurance?

Text messages have been implicated in many unusual things, including; notifying staff of work place redundancies, providing step-by-step instructions to doctors performing life saving surgery, causing repetitive hand strain injuries amongst teenagers, and even blamed for children being born with oversized thumbs!

Now, according to Nick Leeson, a tax on the 80 billion text messages sent in the UK every year could be levied to plug some of the holes in Alistair Darling’s budget deficit this coming Wednesday, and would help save the UK economy from further meltdown.

In 1995, rogue trader Leeson left a $1.4 billion USD financial hole in the accounts of Barings bank, leading to its eventual collapse, and him going on the run. At the time, poor internal controls and lack of risk management procedures were to blame across the banking system.

It’s strange how history always has a habit of repeating on every level! So, before Chancellor Darling goes on the run at the next general election, perhaps he might take advice from a man who knows a thing or two about empty financial holes, and levy a tax on SMS messages?

Fear not, this blog is not trying to change the focus of talkRA from open discussion to an off shoot of eBay for previously loved, only one owner,  RA tools.

The question is to what extent is it essential that the software tools that RA analysts use to identify leakage, be designed with RA specifically in mind. In the early days of RA in an operator, I am sure many of us started with multi purpose desktop applications like Excel, Access, ACL etc and then, assuming the business case was proven, we were able to move up to a “proper” revenue assurance application, sitting on a nice big server and letting us grow the volume of data we could analyse, increase the speed of processing, build repeatable RA analytics and provide coverage across more revenue streams etc.

It is always interesting to observe how RA tools are often represented and this as solving known problems to find untapped revenue potential. It makes sense to state that ”by using tool A, operator B was able to reconcile revenue systems C with D and found E millions of dollars”. So by induction if you deploy tool A, then you can do the same type of reconciliation and find E millions yourself, or you might not find E millions but at least you can tell your management, with confidence, that C and D are functioning effectively.

However, knowing what has happened in the past does not always guarantee that we can know what will happen in the future. Firstly, it seems that recalls of the past seem to be represented very linearly. By that I mean, A did B, C did D, but because E then did F, we had a revenue loss. In the present we seem to rarely move uninformly and seemlessly from one activity to the next but our understanding of the past, and what may or may not have been relevant,  seems to be predicated on diligent pursuit along a steady and unwavering path. Secondly, if looking at the past could predict the future, then the global economic crisis, for example, should not have been surprise to anyone. Simply put, the past does not always provide adequate indication of the future and we should see this in RA – B and C don’t reconcile and we lost E; therefore F and G won’t reconcile so we will lose H. These sums rarely add up as expected and if they do it is probably more by chance than good modeling.

If a revenue assurance tool has been designed for revenue assurance, then by definition, its functionality must be built on a combination of historical knowledge of loss as well as prediction of where leakage will occur in the future. What many service providers are going through now is a period of radical change across their products and services, the infrastructure that supports them and the processes that are wrapped around them. The uniqueness of everyone’s operating environment means that new and unexpected (and so be definition “not predicted”)  issues are arising more, rather than less, frequently.

My contention is that what is needed from an RA tool is not one that necessarily predicts where loss is, but one that is prepared for loss. By this, I mean one that has the necessary agility to provide timely and insightful analysis into an operational area and to drive greater insight into what is happening. This is about flexibility in the ability to read all manner of data, configure the appropriate logic and provide a meaningful output. If we could predict where the future loss would be, we could address this before it happens, but our predictions are rarely accurate enough to enable correctly targeted, preventative action to be implemented. The tool that is required needs to find both the “we think something is wrong here” issues as well as the “we didn’t even think that when we did action A that action B would occur”.

To my original question – RA analysts do need a tool but a tool predicated only on assumptions of past loss will address only some of the issues; what is needed is a tool also ready to handle the next generation of new and unpredicted business problems.

The news from the Billing & OSS World Conference is that Telcordia were winners of the excellence award for Best Revenue Management Solution. Metratech were runners-up.

The awards are only open to those businesses attending the conference, so the real question is not who won, but why they won. The B/OSS news bulletins shed no light on the subject. Neither Telcordia nor Metratech promote themselves as businesses that particularly focus on revenue management. Did they win because they did something well, because they showed up, or because the ‘revenue management’ category is treated as a miscellaneous category for everything that does not fit anywhere else? For example, Metratech were runners-up for Metranet, which they describe as “a charging, billing, settlement, and customer care product”. Fine, but why was this product nominated under the revenue management category, and not the awards for billing nor customer care? The explanation for Telcordia’s award was opaque:

“The global market for traditional services and value-added services is becoming increasingly competitive. Real-time charging and policy enables competitive differentiation for CSPs to realize the market opportunity and revenue potential that exists in delivering interactive, personalized services,” said Michael Wojcik, president, Service Delivery Solutions, Telcordia. “By better understanding subscriber’s preferences and behaviors, CSPs can provide a personal, interactive customer experience that drives service adoption, increases ARPU and reduces churn.”

The Telcordia solution includes a flexible policy and charging rules function (PCRF) that meets the requirements for an IMS PCRF and Online Charging System (OCS) within the Policy and Charging Control (PCC). The solution is powered by the Telcordia Converged Application Server, which combines the strengths of advanced service creation and call or session control with real-time charging and policy running on a multiservice telecom application server.

If you can charge people in real-time across multiple services, you have greater flexibility in how you calculate charges and can more effectively prevent overuse. That sounds fine, but how much extra ARPU does this generate, how much is the reduction in churn, and what exactly is Telcordia doing better than competitors that claim to do the same thing? Anyone with a good answer will be nominated for the talkRA award for excellence in transparent revenue management awards ;)