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“If you are planning for one year, grow rice. If you are planning for 20 years, grow trees. If you are planning for centuries, grow men.”
-- Chinese Proverb
The Pyramids have lasted a few millennia, so it’s a safe bet that some great men — and engineers -were “grown” in Egypt when Ramses the Great walked this Earth around 1200 BCE.
But how about Revenue Assurance? Does an engineer belong in a 21st century revenue assurance department?
“Engineer, you say? We have plenty of accountants, MBAs, and customer care/billing pros on our team, but we’re kind of short on Engineers. . . ”
When it comes to having a deep seated understanding of systems, I think a certain humility is required of business majors, liberal arts graduates (like myself), and people with similar degrees.
For instance, what are the chances you can re-train an MBA to architect and plan the construction of a 50-story skyscraper? Think of the systems that need to be coordinated: design, construction, stress engineering, logistics, purchasing, architecture, HVAC, legal/regulatory, etc. It staggers the imagination. And yet, assuring tomorrow’s telecom services could certainly benefit from people with an engineering or architectural background.
While engineers are certainly rare in the RA business, I found one. His name is Maged Fawzy, a former Solutions Architect at a large telecom operator in Egypt. In our interview, he gives insights on how the revenue assurance practice needs to be improved, especially in terms of planning and continuous analysis of RA’s mission in light of today’s very fluid operator environment. Edited excerpts of our conversation follow:
|Dan Baker: Maged, I was expecting to hear an Arabian accent, but instead you speak very natural American English as if you went to school in the States. Did you? And I’m curious how you landed in revenue assurance with a degree in telecom engineering.|
Maged Fawzy: Actually I studied engineering in my home country of Egypt. The university program is very rigorous and is modeled after engineering schools in the U.S. As for my English, I had the good fortune of studying at an English school where all my teachers were American university graduates.
I wouldn‘t say revenue assurance is foreign to engineering. RA is a mixed-discipline of technology and risk assessment. Network knowledge is certainly needed in RA. When I worked in IT, my background allowed me to bring some scope and insights to other members of our team.
And now, as telecom engineering gets complicated with new disruptive technologies like LTE and WiMax, people are generally not familiar with some of the service risks of launching such networks.
|Tell me about your experience serving Middle Eastern operators. How do their operations differ from what you’d find in Europe?|
There are wonderful growth opportunities in the Middle East, but their architecture is often flawed because the tendency is to buy, buy, and buy, then structure solutions alongside each other. In Egypt, most of the operators are simply doing vendor management. They offshore everything, so there’s not much in-house development.
However, given today’s economy, many of the operators are transitioning some of their department to in-house, especially in areas where it will have minimal impact on operations and achieve tangible cost reductions.
The staff expertise is very knowledgeable at the holding companies. For instance, Orascom [headquartered in Cairo] has top notch management. In terms of RA, they monitor and control several RA practices at a group level across Europe, Middle East, Africa, Asia — even Canada.
|In your brief but busy career in RA, I know you have some thoughts on how revenue assurance departments can improve their game. What’s your idea?|
I think the concept is to know your internal systems quite well and have an IT map. You also need to know your risk areas and have a sense of direction.
You need structure and flexibility at the same time.
Let me share with you a success story at an Egyptian mobile operator that called for RA software solutions. The project was in three phases: Phase 1 -- Network Traffic; Phase 2 -- Service & Subscriber Provisioning; and Phase 3 -- Roaming Provisioning.
Successful system integration was conducted during phase 1 and revenues were realized. But looking at the schedule I felt that Roaming was a high enough revenue risk area that it should be looked at sooner.
So we ran an ad hoc leakage analysis and spotted a $1 million leakage to recover from roaming revenue streams. To get that done, I proactively developed an in-house roaming tool to support the leakage quantification and impact analysis.
Armed with that data, we then made the case with Finance to proof-score the legitimacy of our findings and suggested initiatives to remedy the issue. In the end, we changed our long-term plan to make Roaming Revenue Risks our the next highest priority and went after that in phase 2.
This need to plan up front and then flexibly adapt is a cornerstone of RA services companies, like PwC, Ernst & Young, and KPMG, who do that analysis as part of their engagements.
So I feel that consultancy and risk assessment should be the primer of architecture and design before rushing off to buy a software solution or do systems integration.
|And what about revenue assurance software. How well do you feel operators are employing those tools?|
Operators are seeing mixed results. A revenue assurance tool is usually great in the beginning. It finds buckets of dollars, but over time the costs add up as you maintain the software year over year. The problem comes when an operator brings in new technology like LTE or new business models. When that happens, things go crazy and RA software doesn‘t adapt well to the changes.
Now my opinion comes from being connected with several RA vendors. For example, a hardware solution is good at certain points. If you are launching something with a high level of service risk — such as the movement from 2G to 3G, or 3G to LTE network, you need to utilize very good hardware for network performance management & end-point bill verification.
But if you need a tool with a larger scope, then you need to investigate a WeDo, cVidya, Subex or similar solution. And the good thing these days is I’ve seen a lot of fine consulting expertise surrounding that kind of software.
|The RA software vendors feel they need to overstate their solution scope just to win the business. After all, they may have only a hazy idea of where and how their tool will actually be used by the operator. This is why they promote broad themes like “revenue intelligence”, “revenue operations center”, and “business assurance”.|
Don‘t get me wrong. Some operators are succeeding at implanting full end-to-end controls on revenue streams across your horizontal systems. So it can certainly be done. Yet the state-of-art practice should not be “One Solution Fits All”.
If you buy a bigger solution than you currently need, you will probably still break even in terms of ROI. The problem is value degradation over time.
When change occurs, you often lost track of what’s happening across the horizontal activities that are aligned for business success.
So you need to hone in on the revenue process controls on top of change management and utilize the specific purpose you bought the solution for. Don‘t buy broad revenue assurance software: buy software to get a certain risk area covered.
I came up with a little analogy I call “Magnets and Needles” to communicate the interplay between manual processes, software, and assessments.
The concept of needles in a haystack is a familiar one. So imagine your B/OSS systems and processes are several haystacks in a barn, and the needles are the revenue leaks you hope to find.
Now as a small or immature operator, your RA solution is to use your historical knowledge to select the most likely haystacks, then manually look for needles. In this case, there’s no need to invest much in tools: you simply rely on your trained sense of where to look.
However, if you’re a large or high-volume operator, you need more help. You need to buy a magnet [software]. And after some initial training, your ability to find needles is usually a function of how good you are at using the magnet. Now if there are only a few needles to find, the investment obviously may not be worth it.
But what the RA department really needs is a direction: it needs a compass pointing towards quantified targets.
So to extend my analogy one step further, I’m sure from your school years you learned that if you put a magnet too close to a compass, it will give you a distorted reading. Likewise, buying software should not influence your RA decision-making. You need to employ a gyrocompass, the kind used on ships at sea, that’s powered by a gyroscope whose movement is not affected by outside influences.
And the gyrocompass is akin to an independent RA risk assessment by a consulting firm.
|Your analogy is a good one! So what’s your prescription, Maged? How can operators extend the useful life of the software they buy?|
Operators need to move to something more sustainable. Better planning and continuous analysis of the current situation is what’s needed, but operators don‘t have the right practice to do that effectively.
For example, when they buy software, most carriers conduct a thorough product cost-benefit analysis and evaluate software vendors.
Trouble is, the software purchase analysis is treated as a one-and-done type of thing. Ironically, the same diligence used to select the software is not continued. So what happens? In future years, the whole purchasing cycle must to be repeated to either upgrade the current solution or replace it with something else.
Typically the software companies promise end-to-end controls over all your revenue streams. But how realistic is that claim if there’s no forward-looking plan or upfront risk assessment?
Here’s where the notion of “value engineering” becomes key. As it turns out, the value actually doesn‘t reside in software products or the business controls themselves. The value comes from empowering the people with a sustainable model. Software needs to fit in with the dynamics of your company and your high priority activities.
Think simple! RA departments need to identify risk areas, quantify and put forward a suitable RA solution. This could be a process or tools (hardware, soft / managed service solution) but above all it must proactively embed future risk mitigation. This is where Value Engineering adds a sustainability dimension to RA models.
One interesting diagramming method I like is FAST (Function Analysis System Technique), which grew out of planning during World War II. It’s a simple way to track a sustainable model of RA.
Click here for a high resolution PDF.
Actually you need three things: an upfront risk assessment, a forward looking roadmap plan, and a way to keep track or monitor the solutions‘ value over time. When you create your roadmap, you evaluate your risks and quantify things. I can say: “I will earn $10 million USD in areas X, Y, and Z. And accordingly to my plan, I estimate a number and a target over the next 2 years”. It’s a number and a target that you commit to.
So the secret to longer lifetime value is be selective about which tool you choose for which RA job you have. You need to tie your software/hardware purchases to your forward-looking plan. Conversely, the software vendors will naturally try to maximize their scope to cover as much of your RA footprint as they can.
The biggest source of anxiety, of course, is coping with changes to your environment. That’s extremely hard in revenue assurance. You need to be agile and understand which of the different tools are best for the particular task at hand.
If you need to have manual audits, you do it. In settlements and general ledger, you may need some kind of audit. If you look into event generation and CDRs and mediation, you may need an automated revenue assurance management.
At some points you may need service activation and configuration. For instance, if you are launching new technologies like LTE, you need some provisioning. You may need to have subscriber profiling.
It’s the coherence or data integrity of these platforms that is a big issue for RA. The customer may be activated on the network but billing is missing something. In that case, something on the network side is not coherent with billing. So system coherence and tracking changes are other aspects of sustainability.
Copyright 2012 Black Swan Telecom Journal