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June 2011

What Are the Proper Boundaries of Revenue Assurance Software and Organizations?

What Are the Proper Boundaries of Revenue Assurance Software and Organizations?

When you start a small business, one of the first lessons you learn is: Take most “expert advice“ with a grain of salt.

Lawyers, accountants and landlords all want a piece of you.  The printing shop recommends three times more letterhead and business cards than you need.  And if it had its way, the phone company would sell you a full-page display ad in the Yellow Pages and two or three extra landlines.  If you follow all this advice, your young company will surely fail.  I know from which I speak.  Ask me about it sometime.

Telecoms face the exact same dilemma — how do I see through a supplier’s self-interest in selling me software, systems and consulting?  How do I make strategic software purchases in B/OSS and revenue assurance that allow my business to grow and not waste money on the unnecessary?  And a related question is: What departments in my telecom organization should be responsible for the business functions that employ these supplier tools and services?

As you well know, answering these key questions is the subject of countless magazine articles, blog columns and industry reports.  And trying to sort out all the opinions you’ll find as you investigate these issues requires a level of intellectual passion that few of us can muster.

But yesterday I spoke to Güera Romo, a woman who has taken telecom revenue assurance to this higher philosophical plane.  In the past two years, she’s done a deep-dive investigation of RA organizations and management as part of her Master’s thesis at the University of Johannesburg.  What makes her study even more relevant is that Güera is no ivory tower professor.  She’s lived and breathed RA as a consultant and an RA line manager at operators in South Africa, such as Telkom SA (Pty) LTD, Cell C Mobile and MTN SA.

Dan Baker: Güera, this academic journey of yours is fascinating.  Tell us how you got involved in this.

Güera Romo: Dan, my background is in industrial psychology, which basically studies how people work together and what makes for effective organizations.  But I’m working for my degree in the engineering school here.  So I view my mission as bringing some scientific rigor of thinking to revenue assurance organizations.

In the course of my research, I’ve tried to get my hands on anything and everything that’s been written about RA.  So I analyzed thousands of pages of information from seminars, industry associations, online articles and industry guideline bodies such as the TMF and GRAPA.  Then, using a simple coding method, I came up with 300 concepts that form a provisional taxonomy of RA.  My doctorate study looks at RA maturity, its organizational benefits and the origins of the RA practice.

At a fundamental level, RA departments arose because billing and operations found it too difficult to get their act together.

I agree with that.  RA is a function that compensates for tasks not being done in the rest of the organization.

Some vendors, for example, are advocating that RA tools re-rate 100 percent of call usage to verify accuracy.  But why is it that the original billing system doesn’t have sufficient quality controls and sampling to do a good job of auditing itself?  We need to go back to the root cause of why these functions are not happening in operations.

Why isn’t RA a learning or training session where you test and train on new service models?  You learn what needs to be learned, then take that learning back into operations.

And another key question: Why does the telecom industry — and this industry alone — have a separate function looking after the revenue assurance function?  The banking or manufacturing industries don’t feel a need for this.

Certainly one major problem telcos face is the divide between customer-facing systems and network-facing systems (BSS vs.  OSS).  Banks and manufacturers have it relatively easy.  Money can be easily represented in a database and automobile parts are tangible things that live in one location and can be physically counted.  Networks, on the other hand, are baffling entities to say the least.  They are both physical, logical, and elastic in capacity, plus a service spans many equipment, servers, cables and airwaves.  So how do you accurately relate orders and contracts to network complexity on the backend?

Even recognizing the gap between networks and customer systems, I honestly believe that poor management and performance monitoring is causing many of the problems that RA picks up after.

Take something as simple as a file arriving late from mediation, which is needed to do rating.  Why would you need a secondary person to come in and check that all the files arrived on time and were complete?  Why can’t the persons doing rating and mediation integrate with each other?  One time, as a line manager, I introduced two people to each other whose systems automatically interfaced.  Yet the people didn’t know each other.

And this points to a lack of accountability and that’s what needs to be changed.

Where do you feel vendors sometimes go too far in their zeal to sell more capabilities and software?

Well, at least two of the RA software vendors are now selling the concept of Collections Assurance.  It sounds good, but it lacks a foundation in the organization structure or map of what people should be doing.

RA has some legitimate boundaries and value, but don’t throw in things like collections assurance because the people in the collections department are being paid to do that.  If you appoint an RA analyst to check up on the collections manager, not only is it fundamentally wrong, it’s an insult.

So when software companies propose a new system for RA, I wonder if they’ve thoroughly thought through the organizational implications of that.

And of course, the large services firms pick up on these things, conduct surveys, and write their industry papers.  Then,  before you know it, “collections assurance“ is touted as a must-have system.

Here’s the point: The software vendors are truly adding value, but they often overestimate their value proposition.  Their solutions are not as lucrative as they paint them to be.

So where do you draw a line in the sand?  What is a legitimate job for RA and what is not?

I think each telecom needs to examine that question on its own, but it’s important to recognize that if RA oversteps its functional boundaries and tries to assume too much power, it could do more damage than good.

For any business function that RA takes on, it’s worth asking: Why is the division that’s supposed to do this, not doing it?  Is it because it’s not being managed properly?  Has it become convenient for someone else to tell you where you missed something?

I know that collaboration is needed to get the job done, but it’s very hard to assign any real responsibility to a team.  After all, we recruit and employ individuals.  We don’t recruit and employ a team.  I think it’s time for CSPs to acknowledge they have some big issues around accountability.  I know that is certainly the case in South Africa where labor laws have made it very difficult to manage people by their performance.  I suspect it’s a much broader, industry-wide problem.

Güera, thanks for these insights.  What’s your future look like when your academic work is complete?

Dan, I’ve enjoyed my independence in the past two years.  My academic work has been very satisfying, yet I’m now getting restless and realize I need to soon re-engage and get back to work in telecom.  Of course, whether I strike out again on my own or join a larger consulting firm, I’ll be selling a viewpoint on problems.  Is it possible to remain truly objective and independent while making money?  We’ll soon find out.

This article first appeared in Billing and OSS World.

Copyright 2011 Black Swan Telecom Journal

 
Guera Romo

Guera Romo

Güera Romo is an organizational designer with 22 years of experience in disciplines associated with business optimization and expansion in the banking, government and telecommunication industries.  She is also an academic researcher with interest in Revenue Assurance (RA) as practiced in telecom.  Contact her at guera.mr@gmail.com.

Black Swan Solution Guides & Papers

cSwans of a Feather

  • Is Your Company Penny-Smart and Dollar-Foolish in Auditor Productivity? by Peter Yelle — Operators who fail to automate their invoice reconciliation process could be seriously undermining the morale and efficiency of their most valuable auditors.  This article explains the many subtle ways that manual auditing process can cost operators money.  Also presented is an analysis of the typical returns achieved by CSPs with mature cost assurance programs.
  • What If a Large Telecom Operated as a Thousand Business Units? interview with Eric Priezkalns — The Haier Group, a $20 billion consumer appliance manufacturer is a one-company Capitalism Revolution.  It’s organized into thousands of business units with bottom-up as opposed to top-down decision making.  What would happen if Haier’s management style was used to transform a large carrier?  That questoin is the starting point for an intriguing “outside the box” analysis by one of RA’s biggest thinkers.
  • What Are the Proper Boundaries of Revenue Assurance Software and Organizations? interview with Guera Romo — Is the mission of a revenue assurance department to be simply a watchdog over billing and operations functions?  This article challenges readers to examine the fundamental assumptions that underlie RA organizations.  Issues discussed include personal accountability, training, the scope of RA oversight, and the role of assurance software.
  • When Revenue Assurance and IT Clash, Look in the Mirror interview with Rob Mattison — Succeeding in RA requires coordination with outside departments — billing, customer care, marketing, engineering, and especially IT.  This article shows how conflict often arises between RA and IT over what it truly means to “run systems”,  However, IT can be an even bigger roadblock when RA is confused about its proper mission.

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