Congratulations to Subex, the Indian revenue assurance giant, the first vendor to come clean and clarify that software is an alternative to paying people to do jobs, and not an excuse to create even more jobs. However, I am not sure they realized what they were saying…
This story begins by observing a change in Subex’s marketing approach, following the change in Subex’s management team. Subex’s old management team used to issue press releases announcing sales made to real customers, many of whom they could name. Now under new leadership, Subex seems to have copied cVidya’s marketing style, no longer telling us about sales, and instead issuing a press release saying one of their products is really very very good. Honest. Oh yes it is. It really is. It really is very good. And it must be, because the press release says so. Here is a snippet of the new puff release for an old product:
Zen is the industry’s first solution that sifts through millions of records and narrows-in on the problem area in a matter of minutes. It is a powerful magnet that pulls out the needle from the haystack.
Kudos to Ashwin Menon of Subex, who stood in the line of fire and answered a lot of tough questions about Zen from talkRA commenters. Many were sceptical about what Zen actually does. Ashwin’s post generated 20 comments in total. This was a record for talkRA, and double the total number of comments that Gadi Solotorevsky has received in the thousand years since he assumed leadership of the TMF’s RA team. (Note to people who like data analytics: some might think this is evidence that nobody actually reads Gadi’s blog. Or that they suffer a boredom-induced brain haemorrhage whenever they do.) In answering the sceptics, Ashwin appeased those who felt ‘a magnet that pulls needles from haystacks’ was an overly metaphorical way to describe software functionality. They demanded literal explanations of why they should use Zen; Ashwin had the integrity to provide them. However, eight months later, Subex continue to exhibit an excessive love of flowery language. However, they do give us some hard numbers about how well Zen pulls needles from haystacks. And here are those numbers, summarized in one place:
“increases productivity by over 75%”
“reduces the time to find root causes, typically from 30 hours to 30 minutes”
“ideally provides a substantial boost to analyst productivity by an order of magnitude of 10-20″
“Tier #1 African operator success story… improvement in time saving… 66.67%”
Yup. They sure offered a lot of numbers saying how good Zen is. Note to people who like data analytics: the numbers are all very different. Some of the improvements are four-fold. Some are sixty-fold. Some ten-fold, some twenty-fold, some three-fold. Which means a lot of them are wrong. Possibly all of them.
Let me spell out what Subex is saying in their headline factoid: analyst productivity will improve by over 75%. What they really mean is that, with the help of Zen, analysts will complete jobs in a quarter of the time that they used to take. (Note to people who like data analytics: this is actually a 300% improvement in productivity – 1 man can do the same work that used to be accomplished by 4 men.) Well, that sounds very good. It sounds unlikely, given Zen is just a big magnet and operators rarely suffer from chronic haystacks, but it does sound good. So, RA analysts, next time you sit down alongside your three colleagues who are also RA analysts, take a good look at their faces. Because you will not be seeing them much in future. Unless you meet them down the unemployment centre, looking for a job.
It is usually at this point in the argument that somebody blusters how you really need those other three analysts to do some other really important work. Maybe they can go somewhere and reduce a previously unknown risk by a few thousand orders of magnitude. Back in the world of real business, where data analytics is about using real data to make real decisions, either you have a job that needs four people to do it, or you do not. If it is cheaper to sack three guys and use software, then you sack three guys who you do not need any more. And if you just fancy taking the three guys and giving them another job, then you had better be giving them a real job which delivers real benefits, not just keeping them on the payroll for old times’ sake. In which case, you should have already employed three other guys to do that other job, and you did not have to wait for Subex, Zen, or any other vendor or product to come along and tell you it is time to rewrite the job descriptions for three quarters of your team.
The bottom line is that each necessary task is a genuine task, whether performed by man or machine. You would have to be pretty stupid to believe that the interests of people who sell machines are perfectly aligned to the interests of people who want jobs. Automation exists to lower the burden on people. And companies lower the burden on people not because they are charities, but because they want to employ fewer people in order to reduce costs and improve profits which they pass on to shareholders. Simple. So this amateurish press release from Subex is the first really strong sign that the cosy consensus between RA employees and RA vendors is breaking down. In a greenfield, buying some software can also create jobs, because you employ somebody to push the buttons. In a mature business, if you can get the same results with fewer buttons being pushed, you employ fewer people to push the buttons.
It is possible that the old consensus will temporarily break down, only for a new form of consensus to emerge between telco staff and vendors. Both the employees and the vendors may try to recreate the original greenfield expansion stimulus, by simultaneously extending their scopes to cover new areas. That way they can try to recreate the convenient win-win of the early days of revenue assurance, where software was sold and jobs were created at the same time. I expect we will see some of those messages from firms like Subex, just to appease the people they will have inadvertently upset with this press release. I am sure we will hear it from Gadi Solotorevsky of cVidya, because he wants to be everyone’s friend all of the time. After all, he has maintained his thousand-year peaceful reign precisely because he is a dead-eyed, cold-hearted, data-driven ruthless terminator of telco waste, whilst also being a simple, kind, jolly fellow who hands out alms to the meek and is beloved by small children and furry animals. (Note to lovers of data analytics: yes, there really is some kind of contradiction in there. As well as sarcasm.) I am sure we will get these familiar contradictions being repeated. However, if bad decisions are compounded for short-term gain, then employees will suffer sooner or later.
Pushing buttons is the wrong way to create jobs. Pushing buttons is a low-skill activity, and will always get squeezed by improvements in automation. Too many RA jobs were defined by RA vendors. They wanted employees to push the buttons on their software and fill in the gaps in its functionality (whilst not drawing attention to those gaps). As such, some jobs were not defined to address the real needs of telcos, and little thought was given to creating a career path for the people who filled those button-pushing jobs. The right approach, which RA could have taken from the outset, would have involved minimizing the number of low-skill button-pushing jobs. The emphasis should have been on the human skills that will never be automated. If that had been the case, then Zen would contain nothing new. (Note: I make no assumptions about whether Zen contains anything new.) The right approach would have involved giving the RA department, and hence its people, a job that went beyond crunching data to find anomalies. Those jobs would have been high-skill, and would have needed to deliver high value-add in order to justify them. They would require the kinds of skills we expect from real professionals – which includes seeing through marketing bluster and ignoring nonsense numbers.
It might be too late to reverse the mistakes made in this pool we know as ‘revenue assurance’, in which case many employees will have to sink, whilst automation sails on. Of course, the people with most to gain might offer some employees a berth on a lifeboat, perhaps named ‘revenue intelligence’ or one of those other phrases they so love to coin. But the destination will be much the same. Or we can learn from mistakes, and create jobs that make the most of human minds and restrict software to the role it really deserves: quickly executing a lot of simple, brainless, tedious calculations. That would be a radical change of approach. It would necessitate that telco employees assume the role of leaders, and their software suppliers would revert to being the followers. The tasks performed by software will have been defined for the developers, not defined by the developers. Now what do you think the current ‘leaders’ of revenue assurance might say to that? Perhaps they would disapprove. Everyone claims to like the forward march of progress, but nobody likes progress when it threatens to make them redundant.
The credibility of industry lists took another enormous blow when Global Telecoms Business issued their 2012 list of the 100 most powerful people in telecoms. The usual suspects were at the top of the list. There were CEOs of big telcos (yawn), CEOs of big manufacturers (snooze), the usual condescending nods towards the Apples and Googles of the world (zzzzz) and deference to the bureaucrats at the ITU (what is the sound of a coma? Beep-beep-beep on the monitoring machine, I suppose). However, towards the bottom of the list, GTB just stopped trying. There are obviously more than 100 telcos in the world, and every single one will be headed by a CEO who is a lot more powerful than Alon Aginsky, who is supposed to be the 95th most powerful person in telecoms.
By extension, we can surmise that Aginsky is the most powerful person in revenue assurance, because nobody else in RA was listed in the top 100. I can tell RA is a pretty small niche because I run a wordpress blog that is the only place you get any real news on what is actually happening in RA. And I know you cannot get news anywhere else because I look for it. Hence why I am the only person outside of cVidya who would bother to repeat this ridiculous story. If Aginsky is the most powerful man in revenue assurance, that might be considered quite an achievement, given he does not run the biggest firm in revenue assurance. All I can say to Aginsky is the following: come on then, if you think you are hard enough. If you really are that powerful, then feel free to send over a Mossad agent to shoot me down, or deploy your cyberforces to block this website. Do it, if you really are the 95th most powerful person in telecoms. Which you are not. Because you are not more powerful than the 98th most powerful man, the CEO of HTC, a business that generates 200 times more revenue than cVidya. And you are not more powerful than the 100th person on the list, European Commissioner Neelie Kroes. For those who are unaware of the work of the Commissioner for Digital Agenda, her power extends to setting roaming prices and levying huge fines on Microsoft. In contrast, Alon Aginsky’s powers include coining new phrases like ‘revenue intelligence’, a meaningless term used by precisely nobody outside of cVidya, and setting up the World RA Forum, an organization that lasted about one day before being outed as a cVidya scam. For anyone interested, the URL of the World RA Forum, ra-world.com, now appears to be available. In contrast, ra-blog.org is still in use, though rarely visited.
But perhaps the real proof of Aginsky’s insignificance comes from his own company. I bet you everybody knows how to spell Ben Verwaayen’s name. And to prove the point, I just did. But cVidya’s goofballs could not even get their own boss’ name right when they issued a press release yesterday:
“We are proud to see that our clients are benefitting from our solutions and that justice is prevailing,” said Along (sic) Aginsky, CEO and president of cVidya.
I do like the new name, though. Hop-along Aginsky claims to be a serial enterpreneur and not just another cowboy. As Aginsky put it:
“I take great pride in all the accomplishments we have been able to achieve and look forward to breaking more barriers into the future.”
Right now there is a lot of talk about business models that give people what they want based on the data accumulated about them. For example, take this article about the rise of ‘faster than real-time’ predictive business models. But is there an obvious flaw? Many dislike the idea of huge amounts of personal data being collected, just so a business can forecast our purchasing habits. But might some users wreck the system, by deliberately pumping garbage into the analysis? Cory Doctorow, the author and internet activist, thinks that privacy concerns will provoke some customers to rebel; see here. For example, CyanogenMod is an aftermarket firmware distribution for Android phones that aims to enhance privacy, and it also has an experimental feature where randomly-generated data is supplied whenever an app asks for personal data (such as current location). So here is a very relevant question for any business intending to make money from user data: what is their prediction for the amount of data that will be deliberate garbage?
David Leshem, my old friend and comrade, recently took time out to speak to Black Swan. In a discussion that zings with fresh thinking, David explains why he believes price differentiation is “old school” – even though he set up a company that developed analytical software for pricing! So what does David recommend for any telco wanting to regain their competitive mojo?
Well, I think the answer is embodied in the buzzword that’s been in fashion for the last few years: CEM or Customer Experience Management. It’s a great concept and frankly it’s about time.
To discover the connection between CEM, distributing medicines in Africa, and finding lost kittens, read the interview at Black Swan.
Common sense should indicate that this bill was inaccurate. It should indicate a mistake was made. After all, this is what 11.721 quadrillion looks like when you print it out with all the zeros, just as Bouygues Telecom did: 11,721,000,000,000,000. I hope most people would suspect something was wrong by the twelfth zero, if not by the ninth zero. After all, this bill was sent to Solenne San Jose, an unemployed child minder, as a penalty for the early termination of her mobile contract. You might think this penalty was somewhat unjust and should be overturned. Or you might wonder how Solenne had signed up to such a terrible tariff for her mobile phone. You might also think that Bouyges Telecom must be headed for a bumper year, given that their annual revenues are normally around 5 and a half billion euros, a mere 0.00005% of the one-off charge they presented to Solenne. And you might think this was a bumper year for the French economy. The tax generated by this one bill would easily settle France’s national debt of 1.7 trillion euros. Indeed, this phone bill would make it a bumper year for the global economy, which is otherwise worth only 50 trillion euros a year. So common sense might make you think the number was wrong. But not if you work in the la-la-land of telco customer service. If you work in customer service, then you can end up behaving like a phone bill is never wrong. As Solenne explained to the journalists at Sud-Ouest:
The first time I called, I spent at least 45 minutes with one operator. He replied: “it’s automatic, I can do nothing.” Another told me that I would be contacted to arrange payment in several installments.
In contrast, Dr. Evil only dared to ask for 100 billion dollars, and they laughed at him:
So there you have it. The people working for Bouygues Telecom are even sillier than an Austin Powers comedy. But I think there are two serious points that need to be made.
First, the size of an error may have nothing to do with what causes the error. That fact is sufficient to blow a quadrillion dollar hole through any theory that says telco staff should try to forecast their transaction risk and error using some standardized cross-industry model. It is impossible to reliably predict the scale of transaction errors that your telco will make. It is silly to try to extrapolate transaction error risk from one telco to another, or from a so-called standard model to a specific telco. Forecasting the benefit of error prevention is like calculating the reduction in crime that occurs because the police and court system acts as a deterrent to crime. You cannot do it because, unless you can travel between parallel universes, you never have objective data as a basis for comparison. But that does not mean that error prevention is not worthwhile. We can reason that prevention is often better than cure, but we cannot measure the specifics of when or what kind of prevention activity will deliver benefits that are greater than their costs. By their nature, errors are caused by unpredictable oversights, unforeseen omissions, and unimagined slip-ups. Preventative steps may eliminate errors we anticipate, and also those we did not anticipate. Neither anticipated nor unanticipated errors are susceptible to reliable and objective quantification if we prevent them before they occur. Nobody can build a statistical model that tells them things where they have no relevant data for their own telco. It would be foolish to try to extrapolate from a model based on the made-up data of somebody else’s telco. Anyone who claims they can predict quantified error variances for telcos – variances that must cover both ups and downs – is welcome to examine the circumstances of this 11,721,000,000,000,000 euro variance, and then think again. I look forward to examining the ‘science’ behind a statistical model that claims to take account of the true diversity of goofs and cock-ups, and the extremely varied consequences that flow from them. Anyone offering such nonsense as an industry standard will be welcome to read my scientific retort: the number 11,721,000,000,000,000 as written on my backside!
Second, one has to bemoan the inflexibility of a mobile operator where this bill had to be escalated to the Director of Customer Relations before anyone would admit a mistake had been made. Apparently the bill should have been for €117.21. Because of the distress (and bad publicity) that had already been caused, the bill was waived completely. But why should this unlucky woman find it so difficult to get through to someone who can properly respond to this obvious mistake? Why are the customer services staff unwilling or unable to escalate this problem instantly, rather than behaving as if nothing was wrong? And what would have happened if the error was smaller, like charging €171.21 instead of €117.21? To what extent is the intransigent reply of Bouygues Telecom customer services – “it’s automatic” – used to bully other customers into accepting overcharges? Why even bother with human beings in call centres, if the answers are all “automatic”?
The maths is bad for telcos. Unlike so much nonsense which gets bandied around the industry, this quadrillion euro error is a matter of fact. When confronted with inconvenient but objective data, it gets ignored when it does not fit the prejudices of people working in the industry. Customer service staff insist that the charge is “automatic” as if that provides an explanation or an excuse. RA stooges and national regulators build so-called models to forecast how much error they think will occur in future, but they never adjust their models to account for data like this. If I asserted that telcos lose billions of dollars each year through underbilling, how many would believe me, even though I showed no data to support my assertion? But if I asserted that telcos overcharge customers by quadrillions, it would be laughed off, even though Bouygues Telecom has demonstrated that magnitude of error on a single bill. If a quadrillion-dollar error can occur on just one bill, it follows that much smaller errors could be cumulatively adding billions of dollars to telco profits each year, in much the same way that cumulative error could be subtracting billions from the bottom line. So next time you see a model that calculates the risk that the telco will be a loser as a consequence of undercharging its customers, ask yourselves about the model that calculates the risk of the telco being a winner, because it succeeded in overcharging its customers. And if there is no counter-balancing model, or if the net effect is that telcos almost always lose, and that they hardly ever win, then ask yourself about the data that justified this conclusion. Is it all the data that really exists, or only the data that people want to find?
Since its release, the talkRA book, Revenue Assurance: Expert Opinions for Communications Providers (ISBN 9781439851500) has gained praise from critics and topped the sales of revenue assurance books on Amazon. Available in hardback and as a Kindle e-book, Tony Poulos called it "a must for anybody that works in RA". Read more about its contents and see the list of worldwide stockists here.