ThinkPoints!

Revenue Assurance
Common Questions and Answers about Revenue Assurance in the Telecommunications, Media and Entertainment sectors

From a cost/benefit perspective is it better to invest in an off-the-shelf Revenue Assurance (RA) system or to build one in-house? This depends on many factors such as volume of data, availability and ease of access to the data, complexity of network and IT infrastructure, RA control objectives, in house technical skills etc. In smaller operators who have a simple architecture, readily available data and the technical knowhow, it can be possible to design and build an in-house RA system. For complex/sophisticated RA implementations, with multiple end users and complex workflow, it is probably better to opt for an off-the-shelf RA solution, which is then tailored to your exact needs. To determine your needs the starting point would be to define the requirements for your RA solution and assess availability of systems and talent before deciding on ‘build-orbuy’. Another increasingly popular approach is to use much lighter audit tools (often laptop/desktop PC based) and schedule sample audits rather than implement large and complex (costly) enterprise solutions. Certainly this approach can be an excellent stop-gap for those who are yet to truly believe in the benefits of a fully integrated enterprise solution.

Is it worth investing in separate Fraud Management and Revenue Assurance Systems? Both RA solutions and FMS are considerable investments for any operator; ideally the maximum of synergies should be sought when implementing them. However, unless the decisions to implement these systems are made at the same time and the budget and project is managed by the same team then it is unlikely that major synergies will emerge. Furthermore, many RA and Fraud systems are designed differently and therefore do not share the same databases or technical platforms. Increasingly, however, joint vendors are seeking to rationalise the data storage and processing to reduce hardware footprints (and costs) and improve speed to results. Where a solid technical approach is taken, a joint FMS/RA solution is quite feasible and can be configured and used to produce decent benefits. We are planning a re-organization, should we join the Fraud & RA teams? Separate Fraud and RA teams can work very well if collaboration between the teams is excellent and there is a constant exchange of information and knowhow. This tends to happen more often than not if both the teams have the same reporting lines. If there is an option to join the teams then this can be an added benefit. Employees can take advantage from cross training and learning from each other, the technical skills of the RA analysts can help the fraud team detect technical frauds and many of the fraud controls could be used for RA purposes.

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Business Assurance | Revenue Assurance | Fraud Management | Receivables Management

ThinkPoints!

Revenue Assurance
Common Questions and Answers about Revenue Assurance in the Telecommunications, Media and Entertainment sectors

How can I measure leakage to build a business case for implementing RA tools if I don’t have the tools to measure leakage in the first place? This is a common dilemma for many operators and there are different solutions to address this. You can extrapolate a business case based on issues that have created a revenue loss in the past and that would have been discovered much faster if you had the appropriate controls in place. But for the calculation to be realistic only calculate the savings based on the leakage avoided by rapid intervention due to these new controls. If you do not have sufficient information to do this calculation another popular method is to calculate an estimated yearly revenue loss based on industry averages and then estimate the percentage of this loss that you expect your new controls/ solution to avoid. An increasingly popular method is to undertake an audit using sample data and/or a review of business areas to specifically identify issues and extrapolate findings accordingly; such a review is undertaken in collaboration with IT and Network teams and often with the support of specialist organisations like AssuringBusiness to provide hands-on project direction and the tools used in the data analytics. What are the essential roles in a lean and efficient RA team? How big should the ideal RA team be? This depends on the scope of your Revenue Assurance function; the team should include enough members to be able to distribute responsibility for the scope at a management level and across subject matter experts. Additionally you will need at least one team member to coordinate assurance of new products, services and infrastructure. The size of the team will depend on the scope but also to what extent tasks are being executed within the team or outside the team in other departments, e.g. in a dedicated RA IT team, or if part of the team is outsourced.

What is the scope of an RA function? This will vary from one Service Provider to another, however generally it will include, Billing Integrity, Rating & Charging Integrity, Receivables Integrity, Fraud & Investigations, Product Assurance and Reporting and Analysis and be end-to-end (i.e. cover all the organization’s value streams). Why is revenue leakage still an issue for operators despite the existence of RA for many years now? Although Revenue Assurance has been a hot topic for a while now it has not always been implemented in an optimal fashion. Very often RA has lacked a well thought-through strategy and active C-level support. It’s easy to set-up a Revenue Assurance team, but it’s a more challenging task to implement a sustainable and embedded company-wide Revenue Assurance strategy. Should RA controls be used to demonstrate compliance to financial and regulatory acts/ rules (e.g. Sarbanes Oxley, Statutory Accounts, Regulator Metering & Billing Direction)? Some RA controls can effectively contribute to demonstrating compliance, furthermore new SOX/ Compliance controls can be created based on the mechanisms of existing RA controls. However, one must be very careful not to turn RA into a compliance function, as RA needs to remain motivated to proactively find and fix issues, and not slip into the trap of dedicating all its resources to ‘proving compliance’. Keeping the function focussed on profitability (revenues and costs) is the best way forward, but leveraging the RA fram ework where feasible to deliver complementary benefits such as governance can be useful.

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Business Assurance | Revenue Assurance | Fraud Management | Receivables Management

ThinkPoints!

Revenue Assurance
Common Questions and Answers about Revenue Assurance in the Telecommunications, Media and Entertainment sectors

With scarce resources and funding, should efforts be put primarily on prevention or detection of Revenue Assurance issues? In the early stages of a Revenue Assurance function it makes sense to put higher priority on detecting and fixing issues, as it can be difficult to be effective at prevention if you do not know what to prevent. As a team starts discovering issues and their root causes they will be able to design and implement controls that will prevent them from happening again. This said, it is preferable to allocate some resources to analyzing new products and services before launch, as this is one of the most effective prevention mechanisms. Benchmarking surveys often quote leakage between 2%-15% how reliable is this measure? Most benchmarking surveys have been performed by consultancies based on questionnaires sent to their clients/contacts. The responses cannot be validated and therefore the results rely on what the Service Provider is prepared to divulge. The amount of leakage can vary enormously from one organization to another, depending on the amount of effort they have put into their Business Assurance strategy. In reality the % leakage of revenue is a very crude measure and does not really indicate how badly a company is impacted by RA issues. To understand the real impact one would need to measure the effect on profitability.

What are the benefits of outsourcing Revenue Assurance functions? Outsourcing or Insourcing a Revenue Assurance function can allow a Service Provider to benefit from a professionally managed and developed RA team at a lower cost. The senior resources within an RA team tend to be the most expensive and difficult to find/recruit. Outsourcing/Insourcing RA will allow the company to benefit from the most experienced domain experts and a team which is organized according to the latest RA concepts. The team will benefit from continued further development and be constantly aware of the latest RA techniques and issues. Managed Services, a lighter version of Out/Insourcing focussed on managing and operating RA systems, might also be considered to optimise RA performance. I would like an independent opinion on the effectiveness of my RA controls and the accuracy of reported leakage, what should I do? Although internal reviews are often necessary and useful, there may be occasions when it is best to avoid internal conflict between stakeholders with often differing objectives and commission a review by an independent external party such as AssuringBusiness. Is Revenue Assurance a cost or a profit centre? Revenue Assurance is organizationally a cost centre, however, every RA team should report on their contribution to profit. It is very important that Revenue Assurance makes it’s successes visible throughout the organization and that it has the ability to translate these successes into substantiated financial data. Contact Us to with any further questions or to discuss your Revenue Assurance needs. 3

We will either find a way, or make one
Hannibal (248-183 BC) Military Commander

Business Assurance | Revenue Assurance | Fraud Management | Receivables Management

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