Archive for April, 2012

Every month sees new battles waged over who owns the intellectual property rights to new technologies. Now it seems like the the battleground might extend to revenue assurance. This April, US vendor FICO (the rebranded name of Fair Isaac Corporation) obtained a US patent for ‘revenue assurance analytics’; see here. The description of the patent is broad enough to raise questions about whether other vendors have established products which may infringe FICO’s patent. The patent covers such general activities as a two-feed reconciliation of data records, profile-driven metrics relating to reconciliation, and scoring the severity of issues found.

FICO’s revenue assurance analytics patent was originally filed in 2007, and the vendor has a track record of securing patent rights. Taking a look at the full list of their 69 patents, a number of them have implications for rivals in the revenue assurance and fraud management sphere. As well as several patents covering methods to detect fraud, I noticed this one regarding a ‘network assurance analytic system’. This patent begins by discussing causes of revenue leakage, and goes on to describe a system “configured to monitor telecommunications networks, detect errors or fraud in those telecommunications networks, and provide solutions to resolve the errors or reduce the fraud”.

It is relatively rare to see announcements from vendors relating to securing intellectual property rights for their products. With FICO establishing a track record in the long process of actively securing IPR, we could be heading for some very interesting and challenging times in the RA and FMS markets. It seems that FICO secured a head start on IPR whilst other firms were still enjoying the relative boom times for RA and FMS. Questions to now ponder include how FICO will exercise and defend their rights, and how other vendors will respond.

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I lifted this title for the post directly lifted from the book ‘Switch’, because there could not be a better way to start the last part of the three posts on an overview of “Customer Experience Management” I had been writing. The other two parts were :(1) A further step ahead with Customer Experience Management and (2) Challenges to mitigate in the New Age of Customer Experience with ‘connected’ applications.

In this post I wanted to highlight a basic behavior of consumers, which as a matter of fact is completely dependent on economic factors and geography. The reason I speak of geography and economy being two major factors is because the definitions of millionaires, middle-class, and destitute are very different across the geography and that drives to a large extent the customer experience and the expectations from the same. Imagine this, the middle class of Europe is no where comparable to a vast economy like India, because the population distribution in India may be summarized as:

1. The Very Rich = 6 million
2a. The Consuming Class = 150 million
2b. The Climbers = 275 million
2c. The Aspirants = 275 million
3. Destitudes = 210 million

2a, 2b, 2c form the Mythical Middle Class of India. This was never a single sect in India. [The numbers date back some 10-12 year back when the population of India was around 900 million. The numbers have increased but the sects remain primarily the same].

So in this diversity, one of the factors that play significant role is the effect of ‘Status’ in the minds of the consumers. As a matter of fact the same has been seen by the multi-national brands of garments and cosmetics who have swarmed India. Being able to use a potentially costly service/item is almost a status-symbol to large sects of the geography. So, it is very common to “show off” a costly mobile or a 3G data speed connection in a no-so-affluent location. This is one of the traits of the human mind and definitely is tickled by the economy of the region.

This brings me to saying, when Customer Experience Management is measured by the telecom operators or other businesses alike, it is important to understand the ‘sentiments’ (which unfortunately is not a measurable component) of the people who are using the particular ‘service’, and that definitely is based on:

  1. economy of the region
  2. geographical conditions (dont expect an African pygmy living in the forests to go ga-ga over a Tommy Hilfiger outfit.
  3. educational background and the diversity
  4. (probably) the most important un-measurable component “sentiment of status symbol”

Hence, Customer Experience Management (apart from the quantifiable metrics) would have to take care of these softer aspects for a sustainable business.

 

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Open source revenue assurance? It has long been a popular discussion topic in RA circles, but there was only one problem: nobody had actually written any open source code. It was a perennial good idea where everyone was waiting for someone else to do it. Now Lionel Griache, a senior consultant in the billing and revenue assurance industry with more than 15 years of experience, has made the giant leap into offering open source RA code. After 4 years of existence, his ProactiveRA tool has been officially open source since December 2011. I spoke with Lionel to find out about ProactiveRA and why he has chosen the open source model.

Eric: Lionel, writing code takes time, and you’ve released a finished tool as open source. What was the starting point for this project?

Lionel: This project started as a custom development for a client in the Caribbean. It quickly grew and matured, to the point that it received positive reviews from international financial auditors. Its local success is not based on a powerful or secret algorithm, neither on the amount of code written. The tool is simple yet effective; its success can mostly be linked to understanding that, to be embraced, you must have an effective user interface where people can really see what the tool is about and interact with it on a daily basis.

Eric: You mention that the tool was ‘embraced’ by your client. From your perspective, why was that?

Lionel: Incorporating a professional dashboard was the first key to its success. The second key was minimizing the time it takes to deploy new control points and empowering the client to do so. And it worked beyond all expectations.

Eric: That’s great, but there’s going to be a lot of sceptical people who wonder why you’ve offered the code as open source, if it works that well. Why not just retain control and profit by selling licenses?

Lionel: We had many back-and-forth discussions about that with the initial client. What started as an internal project could easily become a golden egg for both of us, sold to other clients and partners, and generate a nice profit. But is that really our business? The answer came to us when we went back to how our relationship started. All this time, our contract wasn’t about building a tool. The core mission was about analysing data, building reports, looking for revenue opportunities and most importantly bringing a new attitude about how to monitor the business. Building the tool was a side activity to support the communication strategy and presentation of the results to management. What had most value for our customer was that someone brought this new attitude and expertise.

Eric: Are you hinting that, whilst open source code sounds exciting, software tools are not the most important part of RA?

Lionel: The source code of the tool is what it is. It helped tremendously in facilitating the daily monitoring but it will never have the value that the willingness to build a strong revenue assurance program can have. We believe this is true in most RA deployments out there, at least for Tiers 2 and Tiers 3 operators were technical challenges induced by data volumes remain easily manageable. The value of the code is minimal compared to the value of understanding and advising on how to perform RA activities. Making the code open source proves that point.

Eric: I think you’ve just become my hero. You’ve donated open source code and you’ve put the value of software into context – compare that to what we get from some so-called industry leaders! But getting back to the code, can you talk a little about how the code was written?

Lionel: The ProactiveRA solution is based on a powerful open source dashboard called Liferay. As we greatly benefited from this third party, it seemed logical to give back to the community under a similar model. Without any doubt the open source economy is extremely empowering. It gives each one of us the opportunity to join forces and build something bigger than we ever could envision on our own. Open source is an undeniable trend in the software industry. We’re betting the RA world is ready to embrace it as well and we’re proud to be pioneers in that regard.

Eric: You mention the client’s support for making the ProactiveRA code open source. What’s in it for them?

Lionel: For our main client, making the tool an open-source solution is also a logical move. By building a community around the tool, you develop contacts and confront your way of addressing revenue assurance requirements with new perspectives and opinions. This is an opportunity to take an internal development to the next level. If a strong community builds around it, it brings the potential for receiving new updates and new features without having to drive all of that internally. This is a benefit that vastly compensates for the risk of losing control over what could remain an internal development. You can focus your internal investments on what really is specific to your architecture. In general, the open source model gives a whole new audience a chance to strongly influence the future of a tool in a way that wouldn’t be achievable with existing RA solutions. There’s incredible value in joining forces and driving a common solution to new levels.

Eric: I’m confident many people will want to download the code as soon as they’ve heard of it. Where can they get it from? And will you be supporting it?

Lionel: It’s available from our website. The site also has instructions on how to install ProactiveRA. Once up and running, we trust people will find the interface is intuitive, and that it’s a useful system that will inspire them to be more ambitious in how they tackle RA. The website also has a form for people who want to contribute or have suggestions, and gives all our contact details. We’ll be glad to answer any questions.

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The buzz word for the immediate next future is “the internet of things” where appliances are all inter-connected in one large network. Today we talk of smart phones, but soon enough we would be living in a reality of smart-ACs, smart-refrigerators and so on. Such ‘connected’ appliances and applications is definitely bound to make lives of the customers simpler which means the smart phone of today would become the quintessential all in one device working on an extremely complex network serving a broad economic chain with providers and consumers interacting over this large ‘web’.

In order to enable this vision from the future as has been often showcased in Sci-Fi movies and books; a number of significant challenges need a thorough review. A few such challenges are:

  1. Not TBs but Petabytes or more even volumes of data: The problem is, even today making sense out of the data is a titanic issue. Imagine managing such gigantic volumes.
  2. Resource requirements: Obviously energy consumed for processing and maintaining such volumes would be way too high. Carbon foot-print reduction would then become the next big challenge.
  3. Cost benefits and Pricing: A connected planet is an ideal dream- but everything comes at a cost. So, would the investments in such efforts be good risks to take. Especially following the Moore curve, has the largest share of users in the late phases. So understanding the breakeven would be a good point. Not only that, the changes to the complete economics of communication would be interesting to keep a note of.
  4. Economics of Scale: The best bid would be to encash on Economics of Scale than waiting for the early adopters or even the late adopters. Penetration rates into the population therefore would be a significant metric for understanding profitability of operations. Another related topic to understand would be the economic divisions in the different countries. That would be a driving factor for understanding penetration rates- simply because a thorough reach out to the destitutes would definitely mean reducing the price for increasing accessibility- which in return would have low contribution to top-line, and with rising costs and additional costs- the margin for having a sustainable business may be found to be diminishing. This is the same situation as we currently see with competitive price wars among telcos.
  5. Data privacy issues: A connected planet would be a paradise for hackers and fraudulent vermin. Imagine tackling petabytes of personal information keeping fraudsters at bay is a dream for most operators. Effectively, the personal security of the consumers could be at stake if data is hacked.
  6. Information Usability for the End Users: With such connected devices, usability of the information derived for the consumers from these petabytes of data would be a key concern. More so because there would definitely be the need of cognitive interfaces for addressing the different educational backgrounds.
  7. The Killer called ‘Competition’ : The first mover advantage does not help in this ever converging world, and this is not a new fact

 

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Back in the late 90s and early 00s, when Revenue Assurance officially acquired the title of “buzzword”, the industry was awash with innovation, crazy ideas and possessed a real edginess. Every different person you spoke to had found a new way that a telco could lose money, and chances are that you would never have thought of any of these by yourself. Vendors were entering the market, all with new offerings and approaches to help tackle the mysteries of revenue leakage. Industry groups were thriving with people keen to get involved and contribute. Let me then ask some questions to challenge whether RA has settled and whether that edge is disappearing:

- has the maturity model seen better days? The maturity model is often held up as what RA success looks like and what should be strived for. However, it seems to built out of what it took to make RA work in large, bulky, incumbants that generated revenues primarily from voice and maybe SMS. Is the alignment of maturity to first centralisation and then decentralisation; and controlled and managed processes, adept enough to allow flexibility in an environment characterised by changing business models, technologies and revenue streams?

- have vendor tools converged to a point of indifference? Fundamentally, it seems RA tools were built on improving reconciliation capabilities – across larger data sets, over more diverse data feeds, to handle more complex business logic, and present results more intuitively. But with advanced analytic techniques being more accessible, should we expect to see more innovation in how we use the wealth of data beyond reconciliation?

- has there not been enough work on measuring RA performance? Methods to calculate quantifiable revenue uplift, coverage of RA activity, controls established, processes decentralised back to operations etc have existed in various forms of acceptance for some time. Targets set on these become “easy” to meet and even easier to argue away if they are not met. Meantime, objectively determining the value of less tangible RA activities, such as those centred around preventative work, are lagging. In scientific fields, great endeavours in discovery are often preceeded by great improvement in measurement. Change what, how, or the depth to which you measure RA’s value and see what opportunity may arise.

- where is all the innovative thinking? This is no way meant to be disrespectful to the many people who spend time and effort looking at RA today. Conference attendances have fallen and annual events are being cancelled – if you ask attendees a consensus opinion, whether true or not, is that “it’s the same people saying the same thing, year after year”. How does RA bring back innovative, disruptive and challenging discussion that provokes wider debate?

So what might RA need? New thinking, new measurement, new uses of technology and new aspirations that challenge and bring out the best in RA practitioners? You be the judge.

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