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REVENUE ASSURANCE

ANANDA 07020541001.

Revenue leakage is often considered a hidden and uncontrolled cost of doing business in the telecom industry. In addition to fraud, reasons for revenue loss include network provisioning, mediation and CDR errors, billing and interconnect inconsistencies, loss of data and corrupted files, fragmented support systems, incoherent databases, and manual or ill defined business processes. According to various Revenue Assurance (RA) research reports, the degree of exposure lies in the range of 3% to 15% of the Communications Service Providers (CSP) gross revenue depending on factors such as networks and services type, geography, carrier type, and Revenue Assurance maturity level. In the context of Revenue Assurance - the main question for any business is how much leakage is acceptable and how to improve the operations and systems that will minimize those leakages. An effective RA process must ensure the integrity and synchronization of both data and processes across all the disparate systems and the network itself, in order to sustain operational and financial efficiency. RA provides analysis of the relationship between network resources, services, customers, and generated revenue, and enables the CSP not only to detect revenue leakage (e.g. un-billed customers, mis-billed customers), stranded assets, and operational inefficiencies, but also to understand the reasons for these undesired occurrences. This Guidebook originates from TMF Revenue Assurance Technical Report 131, a technical report on RA issued by TMF in 2004, and leads the reader through different facets of RA, collecting the experiences of various professionals. In its evolution from a technical report to a guidebook, the Guidebook aims at broadening the target audience from the original group of RA technical practitioners to a broader set of business stakeholders including other contributing, influencing or benefiting organizations in a CSP. Additional topics have been investigated; others that were only outlined in TR131 have been further expanded. In particular, the Guidebook deals with the following topics, each one covered in a separate chapter: SID and eTOM models support for RA, according to the recent proposal of TMF Modeling team to integrate RA into the SID and eTOM View at Regulatory Compliance through the prism of RA, addressing Sarbanes-Oxley (SOX) and regulation in general. Linkages between Fraud Management and RA, a section in which several options of how to effectively address RA issues are recommended to CSPs.

RA for Content Services, giving recommendations and highlighting some of the new challenges currently posed to CSPs by the delivery of new advanced content-based services. Business Scenarios in which RA becomes significant, providing an insight of perceived root causes and a classification of main areas affecting RA In conclusion, a technical Appendix introduces the reader to the Telecom Fraud topic, ending with taxonomy of possible frauds. A background section follows, to briefly highlight some the key aspects of TMF TR131 which may be considered a starting point for this work: Traditional RA approaches, drip tray model, RA maturity model, and RA best practices. Background Revenue Assurance is a well-known challenge in the Telecommunications sector, mainly rooted in the Telephony world as a set of techniques and methodologies to identify and fix revenue leakages and/or prevent or detect errors resulting in unbilled or uncollected revenues of the CSP. Todays accelerated growth in the data, IP and real-time services market introduces additional complexity and exposure for RA due to dynamically evolving technologies, continuous demand for new services, more complex business processes, new value chains, additional external partnerships, new business models and an every increasing and more complicated operational and business systems infrastructure. The above factors, coupled with the tumultuous economic climate that started with the slowdown in 2001 and the revitalization in 2004-5 and the current regulatory environment, provide evidence and compelling need for RA in more and more CSPs. This need, in turn, together with the acknowledgement of the strategic significance of RA for CSPs, resulted in the formation of organizational units to ensure the accuracy of financial reporting and revenue recognition. Given increased regulatory and competitive pressure and in order to remain competitive and profitable, CSPs are continuingly restructuring their organizations according to new business targets and priorities. These structural change and the response to market conditions suggest the benefits of the acceptance of a holistic RA process to optimize the business process, the usage of existing assets, the data integrity and as a result - maximizing revenues and in parallel - reducing costs and increase profitability. Up to 2004 no CSP emerged as credible industry leader, nor was a unique definition available to comfortably align RA practitioners from different business domains. This situation may be understood

since RA evolved from several organizational units (Finance Control, Network Operations, Fraud Management, Billing Operations, etc.) each of which has a different perspective, approach to RA and own priorities. Moreover, RA is an over-used buzzword. It often reflects the financial needs as well as objectives related to a business problem. These needs and objectives tend to be defined differently by different stakeholders, hence the confusion associated with the term of RA.

Dimensions to the RA problem


For the revenue stream in the usage-based billing environment (i.e. billing that is based upon data volume, duration of sessions, etc.), a comprehensive analysis of the entire process from capturing and recording a billable event through billing, cash collection, accounting and revenue recognition is required. One example of an approach used by a CSP offering voice telephony services is to compare the networks CDRs (Call Detail Records) to SS#7 events to verify the proper ratio of CDRs to SS#7 events. An alternative technique uses test calls that are generated either manually or automatically, to compare the generated CDRs to the record of the event from the subscribers perspective. The subscription-based charging model (recurring or one-time fees) requires an inspection of the data pertaining to the servicing network elements and comparing it to the subscribers billing data. However, order management, asset/inventory management and provisioning systems should also be part of this assessment because data discrepancies may result in the billing process not being aligned with the number of orders, order details or services actually provisioned within the network. Additionally, stranded assets in the network inventory (assets shown in use by the operational support systems but no service actually utilizing the asset) can result with excessive CapEx due to discrepancies in network capacity and orders or allocated resources. For event-based charges (SMS, MMS, etc.) the tariff structure could be regarded as even simpler and requiring only reconciliation. Some providers tend to tie such charges to those of content delivery service (video, music, etc.), which include quality of service related attributes; this requires much stricter controls to be performed.

In

Out

There are other dimensions to the problem such as pre-paid and post-paid issues, wholesale and retail
error not error differences, and so on. Each one requires particular care and may even require a distinct approach, since
captured the type of service or targeted customer segment influenceserror resolved choice of methods and priorities for the and not CSPs RA program. resolved

captured

captured

Economical Perspective
Assessing costs and benefits is a required first step prior to introducing new often-complex projects within a business. This is also the case for an RA initiative. To address this issue, TR131 includes a detailed discussion of the outcomes of a real life example of a cost-benefit analysis performed by an operator. The analysis uses a drip tray model; a common metaphor used in describing the affect of errors in processing charges, a term commonly referred to as leakage. The metaphor is appropriate as the loss of water from a pipe exhibits similar properties to the loss or corruption of data as it is processed from one system to the next. The amount of water lost by the pipe could be measured by comparing the amount that goes into one end of the pipe against the amount that comes out of the other end of it. Though simplistic, the comparison of ins and outs lies at the heart of activities intended to monitor, diagnose, prevent and measure the extent of error. Some drip trays will lead to the capture of errors, some will lead to their capture and resolution. Capturing errors without resolution means that errors are measured but still take place. Capturing and resolving errors means measurement of errors that would have gone unresolved without the drip tray. A drip tray that captures errors without leading to resolution has a cost, but no clear attributable economic benefit. The analysis indicates the benefits of an effective and on-going RA strategy greatly outweigh the costs associated with the project and the operation.

Reactive, Active, and Proactive RA


Using the following definitions for different styles of revenue assurance initiatives

Reactive doing something as a response to existing leakages, for example a project to identify and resolve the causes of actual revenue loss; Active doing something to address problems as they occur, for example by monitoring of problems in real-time. This approach is designed to initiate corrective responses prior to any revenue loss takes place; Proactive - acting in anticipation, by implementing controls and other measures to prevent problems from occurring In general, the reduction in time required to respond to a problem is the basis for the shift from reactive to active RA. The goal is to anticipate what can go wrong and prevent it. This pre-emptive approach is the basis for proactive RA. The Reactive, Active and Proactive approaches to RA are complementary approaches. A good RA practice must always include Reactive controls, to identify leakages and create the case for the Active and Proactive controls. Active controls are required to discover problems in near-real time, and to correct their outcomes before they cause a real damage. Proactive controls are the ultimate goal. These controls help preventing the problems from occurring in advance and normally do so by being addressed in the design and deployment phases. That said, it is a bad practice to rely only on Proactive controls since, as a result of the significant complexity of the operations and business systems and processes of a CSP, some problems may not be able to be detected proactively

Data Quality & Data Integrity vs. Process Improvement


An approach pursuing Data Quality & Data Integrity focuses on improving the quality of data to ensure accuracy of revenue. This normally involves the extraction of data, from one or a number of systems and/or the consistency validation of the data when moving from network to billing. Process Improvement is normally undertaken by a review of the business processes supporting the generation and management of revenue generating events (e.g., Order to Cash processes). The aim is to ensure that processes are designed properly and performed as expected.

In this type of audit style approach, RA tends to identify where potential areas of risk exposure might exist: within system functionality, handoff between systems, as well as supporting business processes and interaction between the processes and systems. Both approaches are complementary and we recommend combining them. There are RA problems that will be detected only by one of the previously mentioned techniques. For example, an automated provisioning process that generates many errors and needs human intervention, may end with successful provisioning and complete data integrity, but cause revenue leakages (the customer will start to use the product later) and subsequently increase the CSPs costs (the cost of the human intervention). This problem will be detected only by using Process Improvement techniques and not by Data Integrity techniques. Best Practices Best practices have been constituted to ensure that comprehensive strategies include network element configuration data, OSS service activation data, usage data, mediation rules, and customer account data from order entry, billing and CRM. Best practice in RA represents a dynamic striving for optimization rather than the static delivery of a particular series of methods, controls and tools. RA best practice itself shall be subject to perpetual review and shall not be considered as a static process. For an RA strategy to be considered effective it is mandatory to include all of the following components: technology, people and processes. Technology component includes identifying data discrepancies and prioritizing the correction efforts, which is a daunting task, and needs the support of software to be carried out. eTOM and SID, to some degree inherently provide for improved benefits of technology integration that reduce some, but not all of the potential fallout associated with technology components that do not interface without a global standards adoption. People component includes the necessary quick investigation of suspicious data by RA analysts and subject matter experts, intended to determine the validity of threshold violations when abnormalities occur. Process component refers to the solid understanding of the complex interdependencies among network infrastructure, B/OSS environment and business processes in CSPs operations that the expert should

have. eTOM Layer 0 2 processes establish some of the interdependencies and cooperation across business units, departmental approaches and various company objectives. RA systems should be designed to support data acquisition from network elements, provisioning systems, mediation platforms, billing systems, order management systems, asset management systems, intercarrier exchanges, partner relationship management, etc., according to the specific business scenario. Beyond data access capabilities, RA systems should also implement key functional features to perform appropriate detection techniques (monitoring, reconciling, correlation and so on) and include reporting tools such as dashboards, tracking and correction panels, case management tools and enterprise controls visibility across all business functions, especially given the new financial regulatory environment such as Sarbanes-Oxley.

RA Maturity Model
TMF Revenue Assurance Technical Report 131 (TR131) also sets forth five successive stages that characterize the RA level of maturity within a CSP. Not only does this scale give CSPs a benchmark to measure their progress against other CSPs, but it also lays out a road map for other RA operations. Five steps of maturity have been identified, with the fifth step an ideal to be reached. Initial, when no RA process has been established and only arbitrary ad hoc reactions to circumstances; Repeatable, when RA processes are developed at the level of individual projects, products and implementations. Flaws are identified and remedial action is taken. Defined, when RA processes are developed for the whole organization. Organizational priorities for revenue assurance are understood and guide proactive deployment of resources. Managed, when RA processes provide consistent quantitative measures. Measures drive planning and control. Optimized, when the measures, planning and controls implemented in order to improve the business themselves become the subject of continual improvement.

Continuous improvement via feedback. Decentralized ownership, central control. Leakage quantitatively understood and controlled. Standardized approach developed. Designing-in control commences. Basic project/process management. Repeatable tasks. Ad-hoc, chaotic. Dependant on individual heroics.

Revenue Assurance is not yet part of the NGOSS eTOM (enhanced Telecom Operations Map) and SID (Shared Information and Data) paradigms. The TeleManagement Forums Revenue Assurance modeling team submitted a proposal about the integration of RA with the SID and eTOM. This proposal is under review, and our expectation is that it will be accepted with minor changes in the next few months. In this document, we present the highlights of the proposition. The eTOM Business Process Framework serves as the blueprint for process direction and the starting point for development and integration of Business and Operations Support Systems (BSS and OSS respectively). The SID, as the NGOSS information model, provides an information/data reference model and a common information/data vocabulary from a business as well as a systems perspective. Using the SID in combination with the eTOM business process and activity descriptions, it becomes possible to create a bridge between the business and Information Technology groups within an organization, providing definitions that are understandable by the business, but are also rigorous enough to be used for software development. The integration of RA into the eTOM and SID will greatly impact the standardization of RA, permitting service providers, system integrators, and vendors, to implement RA in a canonical way, reducing costs, and ensuring interoperability between systems and processes. For the sake of the RA practitioners who may not be familiar with the NGOSS, eTOM and SID framework, we first provide a short introduction to NGOSS, eTOM and SID.

NGOSS

The NGOSS Model

NGOSS is a comprehensive, integrated framework for developing, procuring and deploying operational and business support systems and software.

NGOSS is the TeleManagement Forum initiative to drive efficiency in and cost out of the operation of telecom networks. NGOSS enables service providers to change the way they think about their business and operations. NGOSS is a comprehensive, integrated framework for developing, procuring and deploying operational and business support systems and software. It is available as a toolkit of industry-agreed specifications and guidelines that cover key business and technical areas. Through an integrated system of business and technical elements, NGOSS allows OSS/BSS systems to become as interoperable as they have been never before. NGOSS positions Service Providers with a repeatable process for automation of complex operational tasks and positions vendors with the most effective open interfaces in the industry today. Business Process Automation delivered in the enhanced Telecom Operations Map (eTOM) Systems Analysis & Design delivered in the Shared Information/Data Model (SID) Solution Design & Integration delivered in the Contract Interface and Technology Neutral Architecture (TNA) Conformance Testing delivered in the NGOSS Compliance Tests Procurement & Implementation delivered in ROI Model, RFI Template, and Implementation Guide documents The eTOM The Enhanced Telecom Operations Map (eTOM) is the ongoing TM Forum initiative to deliver a business process model or framework for use by service providers and others within the telecommunications industry. The TM Forum eTOM describes all the enterprise processes required by a service provider and analyzes them to different levels of detail according to their significance and priority for the business. For companies adopting eTOM, it serves as the blueprint for process direction and provides a neutral reference point for internal process reengineering needs, partnerships, alliances, and general working agreements with other providers. For suppliers, eTOM outlines potential boundaries of software components to align with the customers' needs and highlights the required functions, inputs, and outputs that must be supported by products.

SID

The SID, as the NGOSS information model, provides an information/data reference model and a common information/data vocabulary from a business as well as a systems perspective. The SID uses UML to formalize the expression of the needs of a particular view. The SID provides the common language for communicating the concerns of the four major groups of constituents represented by the four NGOSS Views: Business, System, Implementation and Deployment, defined in the NGOSS Lifecycle. Used in combination with the eTOM business process and activity descriptions, SID makes it possible to create a bridge between the business and Information Technology groups within an organization, providing definitions that are understandable by the business, but are also rigorous enough to be used for software development. In order to integrate Revenue Assurance into the NGOSS framework, and to gain all the benefits of this framework, RA must be integrated at least into the Enhanced Telecom Operations Map (eTOM), which defines the business processes in the telecommunications industry, and into the Shared Information/Data Model (SID). The integration of RA into the eTOM permits telecommunications operators to have a better understanding of the function of RA at the operational level and to comprehend the interactions between RA and other processes. The integration into the SID allows identifying the common data/information model that should be followed by RA solutions, permitting structured and easy integration between RA solutions, and between RA solutions and other entities in the telecommunications operational map The proposal The TMF RA modeling team made a detailed proposal of integration of RA into the SID and eTOM. Below is a high-level description of this proposal. The reader should keep in mind that this description is neither detailed nor exhaustive, and that exactitude was sacrificed for simplicity. We identified 7 RA Aggregate Business Entities (ABEs) that should be incorporated into the SID Revenue Assurance controls, Revenue Assurance violations, Revenue Assurance key performance indicators (KPIs), Revenue Assurance objectives

Revenue Assurance rules that map revenue assurance KPIs and threshold violations to revenue assurance trouble tickets. Revenue Assurance actions/responses Revenue Assurance assessments Figure RA.4 depicts the Revenue Assurance Aggregate Business Entities (ABEs) within the SID Framework.

Enterprise

(Under Construction)

Revenue Assurance
RA Control RA KPI RA Violation RA Trouble Ticket RA Action_Response RA Objective RA Assessment

Revenue Assurance ABEs The Revenue Assurance Control ABE defines policy-based rules that represent the logical definition of comparisons performed on entities to identify Revenue Assurance Violations. For example a Revenue Assurance Control may compare pre mediation and post mediation call details records (CDRs) to identify improperly dropped CDRs, i.e. Revenue Assurance Violations Revenue Assurance KPIs are defined on Revenue Assurance Violations and on other revenue assurance related entities, such as bills and CDRs. For example a RA KPI may count the number of Revenue Assurance Violations found by the Revenue Assurance Control that compared the pre and post mediation CDRs. Revenue Assurance Objectives are targets whose infringement may trigger the creation of Revenue Assurance Trouble Tickets. Examples of Revenue Assurance Objective are that the value of the Revenue Assurance KPI that counted the number of dropped CDRs is lower than 50,000, or that the trend of this value over a period of time is negative (the number of violations is dropping). When one or several Revenue Assurance Objectives are violated, a Revenue Assurance Trouble Tickets may be

issued. For example if the number of dropped CDRs is higher than 50,000 a Revenue Assurance Trouble Ticket may be issued and assigned to someone, to check the cause of the problem, and to try to recycle the dropped CDRs. Revenue Assurance Trouble Tickets may be created as a result of the infringement of one or more Revenue Assurance Objectives, or as a result of the finding one or more Revenue Assurance Violations. Revenue Assurance actions/responses reconcile revenue assurance trouble tickets, and Revenue Assurance Violations and may bring the Revenue Assurance Trouble Tickets to closure by initiating and performing a series of one or more activities. These activities may include corrective activities, e.g., correcting and recycling the dropped CDRs, and other activities such as sending reports to all the people that should be aware of the violation of the objective, e.g., sending a report to the CFO if more than 50,000 dropped CDRs were found. Revenue Assurance Action/Response ABE entities also may consist in root cause analysis. Revenue Assurance Assessment ABE entities measure the effectiveness of Revenue Assurance Controls, Revenue Assurance Objectives, and Revenue Assurance KPIs. Revenue Assurance Assessment ABE entities include recommendations of refining controls, objectives, and KPIs.

The RA ABEs proposed are based on existing SID ABEs, for example the Revenue Assurance Trouble Tickets is defined using the already existing SID ABE of TroubleTicket, and the Revenue Assurance actions/responses is defined using the already existing SID ABE of Activity. Revenue Assurance (RA) business entities support the complete RA lifecycle. These processes range from creating RA controls, KPIs and RA objectives, identifying RA violations and trouble tickets, resolving trouble tickets to assessing an enterprises RA program. RA eTOM processes are shown in Figure RA.5.

RA eTOM processes

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