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Authors: Shital Ghuge – Lean Six Sigma Green Belt Jyoti Govekar – Lean Six Sigma Green Belt Prasoon Agarwal – Lean Six Sigma Black Belt
© Tech Mahindra Limited 2012 © Tech Mahindra Limited 2010
This white paper attempts to highlight that how Business Analytics can be used to execute and deliver Inventory Reconciliation for Revenue Assurance effectively for Telecom data products. RA sector not only monitors each and every billable transaction to retain and cover the revenue. rather critical role in Telecom business. More so. Today. the scope of RA has expanded in leaps and bounds. This will help the Telecom business operations to improve growth in Revenue by reducing Revenue leakage. © Tech Mahindra Limited 2012 1 . It explains that how every aspect of business analytics techniques like. this white paper focuses on how smaller players of Telecom with low budgets can divert their synergies in carrying out Revenue Assurance activities with Business Analytics team and their capabilities to operate with lower cost and gain higher Revenue thus improving the profit margin. but also performs root cause analysis to identify the reasons for revenue leakage and provides strategic solution to the problems. to extract. Business Analytics is one such practice which involves analyses of organization wide data elements using various statistical and quantitative techniques.Abstract Historically Revenue Assurance dealt only in analyzing the billions of daily usage transaction records generated and processed by a Service Provider’s network in order to retain every billable amount of revenue and ensure that no transactions are lost as they traversed each network node and system. In today’s changing economic conditions and an evolving technological environment every Service Provider is focusing to improve margins. On the other hand. Thus Revenue Assurance function plays not only an important. to transform and analyze huge quantity of data for various business processes can be used with different phases of Inventory Reconciliation for Telecom data products. In recent years. explanatory and predictive models in order to draw inferences that help to solve business problems. to integrate.
.............................................................5 Challenges faced in conducting Revenue Assurance ....................................................................... 3 Need for Revenue Assurance in Telecom Sector .............9 ACKNOWLEDGEMENT ....................................... 8 Advantages of using Business Analytics to conduct Inventory Reconciliation .........................................................................................5 REVENUE ASSURANCE – INVENTORY RECONCILIATION ..........................................................................................................................................................................................4 Benefits of Revenue Assurance ..................................................... 13 REFERENCES ...........................................Table of Contents REVENUE ASSURANCE ...... 7 APPLYING BUSINESS ANALYTICS TO INVENTORY RECONCILIATION....................................................................................AN INTRODUCTION ............................................. 13 © Tech Mahindra Limited 2012 ............. 11 ABOUT TECH MAHINDRA ....................................................................... 12 GLOSSARY .......................................... 6 BUSINESS ANALYTICS ...................................
and a common thread for all Telcos. Revenue Assurance (RA) has become a necessity rather than luxury. A mature RA methodology that can be used in any Telco can be explained in six different phases as shown in the below figure: © Tech Mahindra Limited 2012 3 . In any of these scenarios. According to various Revenue assurance researches conducted globally Revenue leakage in the Telco industry is 1% to 11% of gross Revenues annually (Source: Tele Management Forum Solution Suite 3. Telcos may be vulnerable to Revenue leakage or Revenue stagnation.6) Assuming the global telecommunications market Revenue is US $ 1.6 percent CAGR every year Source: Stratecast These days Telcos follow a conceptualized RA model which covers all aspects of business operations right from sales to the collection of payments. Revenue Assurance can be defined as a practice that helps in identifying and preventing Revenue leakages thus enhancing cash flow by billing accurately and improving the effectiveness of cash collection process.Revenue Assurance . looming cost pressure and market becoming extremely competitive. for Telcos.3 Trillion we can estimate the annual Revenue leakage of up to US $ 143 billion (Source: Connex Technologies) Global Revenue Assurance survey for market Market Size of RA in Telecom Domain 450 400 size of RA in Telecom domain estimates the below: RA market size for Telecom domain was US $ 235 million in the year 2009 This was expected to grow upto US $ 413 million by the year 2012 Market for Revenue Assurance would gradually US $ Million 350 300 250 200 150 100 50 0 2009 2010 2011 2012 235 282 340 413 grow by 21. scalability. or both. is the potential impact on Revenue.An Introduction With eroding margins. whether they are faced by the challenges of sustenance. As a result.
An in-depth explanation of Inventory Reconciliation is explained in the coming sections. competition is often intense and telecom operators are required to concurrently manage fast-paced growth as well as innovation.A holistic approach followed for performing these activities can help plug the Revenue leakages in major impacted areas of the business. In markets with multiple players. Need for Revenue Assurance in Telecom Sector Telecom is the most dynamic sector. © Tech Mahindra Limited 2012 . From service provision to cash collection. Some of the issues driven by this are stated below: Complex business operations with different products on different IT stack Cumbersome and inefficient value chains leading to ill-defined processes Interconnect issues between different service providers Complex billing practices and adjustments Financial limitations leading to system issues All the above factors make revenue assurance a critical solution in Telecom business. there are limitless opportunities for revenue to seep through the cracks – especially in a world of convergent services.
As a result. measure and prevent the risk points for Revenue leakage Identify process Improvement and revenue recovery opportunities Prevent billing inconsistencies before they reach the customer bill and increase billing accuracy Reducing operational costs Focus on customer acquisitions and retention propositions Divert the Revenue for more profitable endeavors Improve Customer Experience Challenges faced in conducting Revenue Assurance As Telcos move deeper into next-generation services and content-driven service environments. processes and revenue chains are becoming highly complicated which makes RA difficult for implementation. Revenue Assurance becomes both. more complex and more critical. continuous demand for new services. expansion of product portfolios. People factor Need of competent RA analysts and Subject matter experts with right skills and adequate knowledge to not only identify suspicious data but also perform quick investigation and suggest quick wins is an important but difficult task. networks and services. This leads to difficulty in quantifying Revenue losses. © Tech Mahindra Limited 2012 5 .Benefits of Revenue Assurance Revenue Assurance solution can benefit any Telecom industry in the following ways: Identify opportunities for cash. revenue generation. Data availability Revenue data is difficult to obtain. complex processes and business systems infrastructure adds complexity in system configuration thus hindering exposure for RA. IP and real-time services due to dynamically evolving technologies. Extracting the right data with no integrity and quality issues is a big challenge to start with. The major challenges faced in carrying out Revenue Assurance are mentioned below: Complex processes and practices: As Telcos operate under a stricter regulatory regime. margins and profitability Identify. new rules are forcing them to increase their internal control and to ensure generating Revenue at highest levels of efficiency. operations.with too many sources of data and too many reports. Technical complexity: Accelerated growth in data.
This RA activity can be useful for any telecom operator for short or long term opportunity. It helps to ensure that the entire inventory provisioned for the customers are available on the billing systems and also customer bills hence avoiding revenue leakage. Inventory Reconciliation helps in maintaining the data quality across all the systems from provisioning to billing thus the correctness and availability of all the data attributes. right from provisioning to billing for data products. Also revenue losses caused due to mismanaged inventory is recovered through the reconciliation activity.Tools and techniques Managing vast data for performing data analysis is one of the biggest challenges. targeting to improve their inventory management. Below is a detailed Inventory reconciliation delivery model which can help any Telecom sector to carry out reconciliation activities: © Tech Mahindra Limited 2012 . Revenue Assurance can become quite time consuming. Revenue Assurance – Inventory Reconciliation Inventory Reconciliation is one of the activities of Revenue Assurance program that aims at carrying out corelation and reconciliation of inventory details and its data attributes of concern on systems. thus wasting time on interpreting massive amount of data from unrelated and cumbersome reports without proper tools and techniques is difficult.
business operations and bottlenecks. It mainly provides an analytics support to the business strategy in shaping business/investment proposals with market and operational metrics. Traditional Telcos are focused on improving financial parameters however they also need an insight about customers. suppliers. Business Analytics especially helps Telcos in following ways: Helps to move ahead of ad-hoc reporting analysis and adopt a culture of analytics Assists in strategic initiatives through impact analysis.Business Analytics Business Analytics is a practice which helps Telcos to understand the structure. feasibility studies Provides granular view of the current performances and bottlenecks Helps in driving continual improvement programs Conducting Root cause analysis for complex problems Enhancing customer experience and profitability Reducing Revenue leakage and fraud leading to growth in Revenue Reducing costs and increasing efficiencies across Telco operations Business Analytics methodology can be implemented in a Telecom industry through the below strategic delivery model: © Tech Mahindra Limited 2012 7 . policies and operations of an organization and recommend solutions that enable the organization to achieve its goals.
thus ensuring predictable and measurable business outcome. Every activity of Revenue Assurance program when performed by implementing Business Analytics model will accelerate the yield. identifying process or system gaps. Inventory Reconciliation offering can be mapped vis-à-vis the Business Analytics model mentioned above by using the below mapping: © Tech Mahindra Limited 2012 . This section of the white paper will focus on the application of Business Analytics in Inventory reconciliation activity to recover the lost revenue due to mismanaged inventory for telecom data products.Applying Business Analytics to Inventory Reconciliation Business Analytics can help deliver various activities of Revenue Assurance in any organization in a strategic and planned manner. BA techniques can supplement Inventory Reconciliation outcome in terms of detecting anomalies. Business Analytics can provide useful assistance to achieve the objective of Inventory Reconciliation so as to present an accurate portrayal of the assets leading to data cleansing. and business benefits associated with solution.
A SIPOC model is shown below to show how the above model impacts the value chain right from the supplier to the customer: Cost Assurance can also be performed by analyzing the variable cost that should be reconciled with the actual revenues. re-organization initiative and large transformation initiatives by providing predictive analytical metrics and recommendations. The outcome is conducting Revenue Assurance efficiently and delivering benefits to the organization. mapping and validation. identification of discrepancies and bottlenecks. Advantages of using Business Analytics to conduct Inventory Reconciliation Business Analytics approach helps support business with process re-engineering. enabling fact based decision making at various levels. Therefore. the profit margins can be assured by the Telcos. Hence. conducting root cause analysis and recommending solutions in order to reduce revenue leakage leading to growth in revenue. Revenue – Cost (Variable + Fixed) = Profit Margin © Tech Mahindra Limited 2012 9 .Thus aligning the Inventory Reconciliation for Revenue Assurance to the Business Analytics model helps in carrying out the various activities in a strategic way. Using Business analytics approach to conduct Inventory Reconciliation activity helps in identification and analysis of data attributes. once both Revenue & Cost Assurance have been implemented effectively with proper control plans in place.
a common framework with a strategic approach for Revenue assurance. Influence. Reactive. Database audits.e. Scorecard. large or small. People. Monitoring.6 describes i.However. So any steps to correct the revenue leakage before it causes any damage is designed and implemented.6 suggests Maturity Model that provides any telecom industry. Five stages of the Maturity model. In addition to applying business analytics approach to implement Revenue Assurance. By implementing the Business Analytics approach this team can easily initiate and drive actions to address the Revenue leakage issues identified and start generating returns. According to TMF the three approaches are complementary. Instead. A good RA practice must always include Reactive controls. smaller Telecom players with a lesser budget can neither afford to hire the assistance of external Revenue Assurance consultants nor set up an independent team of Revenue Assurance experts. Tele Management Forum’s RA Solution suite 3. Tools and Process. © Tech Mahindra Limited 2012 . This tool can be updated and upgraded depending on expansion of service and products in future. Reactive approach helps in detecting revenue leakages after their occurrence and then steps are taken to recover the losses once leakage is detected. Hence setting up an in-house team of Business analyst can be the best savior to combat this situation. Similarly Proactive approach helps in controlling or avoiding the leakages before they occur and effectively taking steps to change processes or systems before leakage occurs. to identify leakages and create the case for the Active and Proactive controls. a simple automated tool based on Microsoft Excel or Microsoft Access can be developed so that query based commands can drive automated data extraction and data analysis. Active approach is real time approach to address revenue leakage problems as they occur. Performance reporting from external RA consultants can be useful but a costly affair. On the other hand. there are different styles of RA approaches that TMF RA solution suite 3. Investing to acquire different Business Intelligence tools for generating RA dashboard. as shown below helps to identify areas of improvements in five business aspects namely Organization. Active and Proactive.
Tech Mahindra Ltd for motivating. holistic control Managed . Decentralized ownership. Her invaluable suggestions at each stage have helped us in successful completion of this white paper. This provides a perfect opportunity for them to achieve more (Revenue) with less (Cost). Dependant on individual heroics 4 3 2 1 An in-house Business Analytics team and an internal BI tool will ensure that operational costs remain lower.Leakage quantitatively understood and controlled Defined . Designing-in control commences Repeatable . Acknowledgement We would like to thank Dr. encouraging and guiding us in writing this white paper. Shreekala Jaydeep. remedy and prevent revenue leakages. Repeatable tasks Initial – Ad hoc.Continuous improvement via feedback.5 Optimizing . chaotic. Putting it together with the above strategic approach is a cost effective solution for a small player thus helping identify. © Tech Mahindra Limited 2012 11 .Standardized approach developed.Basic project/process management.
Europe’s second largest telecom service provider. Hyderabad. and product engineering. Through a rich Telecom heritage. Tech Mahindra combines deep domain expertise in OSS (Operations Support Systems) and BSS (Business Support Systems) systems. Tech Mahindra has built long-term sustainable relationships with telecom Customers through delivery of IT services that help them achieve significant ROI and the greatest competitive advantage in the telecom marketplace. Tech Mahindra is also one amongst only three companies worldwide to be successfully appraised for SSE-CMM Level 3.About Tech Mahindra Tech Mahindra Limited (formerly known as Mahindra-British Telecom Limited) is the global leader in providing E2E IT services and solutions to the Telecom Industry. for nearly two decades. Tech Mahindra owns 10 state-of-the-art offshore development centers . implementation. Mumbai. With over 25000 professionals. Tech Mahindra services Customers across geographies from 16 sales offices across USA. in partnership with BT Plc (BT). tools and techniques backed by its stringent Quality processes. Its centers are ISO 9001:2000 & BS7799 certified and it also holds a SEI-CMMi Level 5 certification.UK (Milton Keynes. Chennai. design. Kolkata. and Noida). maintenance. © Tech Mahindra Limited 2012 . Bangalore. Tech Mahindra has grown rapidly to become the 8th largest software exporter in India (NASSCOM 2006). Tech Mahindra adds value to client businesses through well-established methodologies. Majority owned by Mahindra & Mahindra. Europe and Asia-Pacific. Tech Mahindra provides a wide variety of services ranging from IT strategy and consulting to system integration. India’s fifth largest commercial group. intellectual leadership and a global workforce advantage to provide services to leading players in the telecom ecosystem. Tech Mahindra’s people-care practices are certified at PCMM Level 5. application development. Belfast) and India (Pune. Having serviced premium telecom companies worldwide. Committed to Quality.
com/ra-modules.Tele Management Forum (TMF) 2. Tech Mahindra Internal Revenue Assurance practices 4.Glossary RA CAGR KPI E2E SQL SIPOC BA BI TMF Revenue Assurance Compound Annual Growth rate Key Performance Indicator End to End Structured Query Language Supplier Input Process Output Customer Business Analytics Business Intelligence Tele Management Forum References 1.xintec.htm . http://www.aspx. http://www.6.com/ra11/index.telestrategies. Revenue Assurance Solution Suite 3.Different RA operators and their programs 3.RA solution for small telecom industries © Tech Mahindra Limited 2012 13 .
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