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White Paper

powering the ROC

The Sampling Approach to Revenue Assurance

The sampling approach can help CSPs to efficiently implement a revenue


assurance practice. This approach ensures lower cost and reduced
implementation time as compared to the traditional blanket approach. This
whitepaper discusses the different sampling methodologies that CSPs can
use to establish revenue assurance in their organizations.

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powering the ROC www.subex.com

White Paper The Sampling Approach to Revenue Assurance

Introduction
Revenue Assurance is one of the more keenly tracked and discussed initiatives in most carrier organizations. Carriers
recognize that an effective Revenue Assurance practice could be a key driver to ensure sustained profitable growth.
However, in the absence of any existing experience or formal strategy, the Revenue Assurance practice tends to have
different originating and sponsoring departments within a carrier organization. Different sponsors have advocated
different approaches and objectives for the Revenue Assurance practice. In this paper, we attempt to discuss the sampling
approach to Revenue Assurance, which we believe is the efficient approach to building an Revenue Assurance practice.
Some of the common characteristics of revenue leakage are:

Blanket Approach
A hitherto common approach for Revenue Assurance implementation is to collect and analyze all data across all systems
and processes; while this approach guarantees that majority of the problems are detected, it has a severe impact on the
implementation system requirements. While providing a wide coverage to the Revenue Assurance initiative, this approach
suffers from high cost, effort and time to implement the solution.

Revenue Assurance Sampling Approach


We recommend an alternative approach that relies on sampling. Sampling is a method of collection of relevant set of data
from the entire data volume to perform revenue assurance analysis. The logic of the sampling approach is based on the
following commonly observed characteristics of revenue leakage:
Revenue leakages are usually found in more such elements, services or systems that undergo frequent changes
and modifications
80% of the revenue leakage and revenue assurance challenges can be attributed to 20% of root causes

The sampling approach provides the following key benefits:

Since the volume of CDRs monitored is only a fraction of the overall CDR volume, the investment for implementing
revenue assurance activities is greatly reduced. This also contributes to a significantly faster return on investment
Ability to focus on specific areas, issues or data set to identify leakage issues
Reduced time for analysis and root cause analysis as the data volume is low
Segregation and focused analysis of data can help in extracting important information that may be lost when
whole data volume is considered

There are multiple sampling approaches and the most optimum approach may differ
from organization to organization depending on business and operational model.

02 2011 Subex Limited


powering the ROC www.subex.com

White Paper The Sampling Approach to Revenue Assurance

Sampling methods
Several sampling methods can be employed for revenue assurance. Following are a few effective methods:

Fixed rule sampling


In this method, sampling is done according to predefined rules that contain understanding of leakage issues. For
example, information that certain switches are generating high leakage allows operators to select only those sets
of switches for revenue leakage

Statistical sampling
This sampling method is based on trending of data and sampling changes in trends. Statistical information of
various records, usage and processing of information provides an indication of the main areas of leakage. For
example, a reduced CDR volume count during peak period is an indication of revenue leakage. Hence a sample
and detailed reconciliation of this period would provide effective revenue assurance

Systematic sampling
Systematic sampling method involves sampling of every nth unit from a population.
This method is well suited for routine and process intensive activities such as invoice verification for subscribers
before releasing it to the customers

Stratified sampling
In this method, the population is divided into non-overlapping groups, or strata. Samples are drawn from each
stratum separately and results pooled. An example is verification of subscriber invoice based on price plans they
have opted for.

Random sampling
Random sampling involves, in advance of the selection of the sample, assigning to each member of the population
a calculable and non-zero chance of selection. This is normally employed when there is not enough information
for selecting a specific sampling method

Multi-stage sampling
In multi-stage sampling, the population is divided into a number of non-overlapping first stage units (FSUs). A
sample of these FSUs is drawn, and then in the second and final stage individuals are taken from within the FSUs
Boiler plate

03 2011 Subex Limited


About Subex
Subex Limited is a leading global provider of Business Support Systems (BSS) that empowers communications service providers (CSPs) to achieve
competitive advantage through Business Optimization - thereby enabling them to improve their operational efficiency to deliver enhanced service
experiences to subscribers.

The company pioneered the concept of a Revenue Operations Center (ROC) a centralized approach that sustains profitable growth and financial
health through coordinated operational control. Subex's product portfolio powers the ROC and its best-in-class solutions such as revenue
assurance, fraud management, credit risk management, cost management, route optimization, data integrity management and interconnect /
inter-party settlement.

Subex also offers a scalable Managed Services program and has been the market leader in Business optimization for four consecutive years
according to Analysys Mason (2007, 2008, 2009 & 2010). Business optimisation includes fraud, revenue assurance, analytics, cost management and
credit risk management. Subex has been awarded the Global Telecoms Business Innovation Award 2011 along with Swisscom for the industrys first
successful Risk Reward Sharing model for Fraud Management

Subex's customers include 28 of top 50 operators worldwide* and 33 of the worlds 50 biggest# telecommunications service providers. The
company has more than 300 installations across 70 countries.

*GTB Carrier Guide, 2011


#Forbes Global 2000 list, 2011

www.subex.com

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