The Cost of Nada

I recently found myself occupied with new endeavors (smart grid related topics etc). Seeking complete closure, I’m somewhat troubled why RA attracts only limited interest from the “typical” telco CXO.

TalkRA is discussing various RA techniques and standards; It had been read by a small and quality community of RA professionals. Yet it would be safe to assume its coverage is limited to a small number of RA practitioners.

I will try to offer a suggestion why…

The highest art of any trade is being able to answer the “what if not” challenge. I presume no one would dare to ask “what is the cost of not have a billing system?” or “what is the cost of not having a customer service department?”

Yet, I’m not so sure what would be the reply if we challenge the RA function and the related costs it involves. Sure, there are rather useful RA dashboards, and there is documentation about the right way of doing business by the TMF, Papa Rob and plenty of consulting firms. We’re also well familiar with fancy ROI figures which support the cost-benefit argument to implement an effective RA policy. However my challenge is being able to reply to a simple question: “what is the cost of not having an RA?”.

For sure one can craft a reply and mention SOX as a supporting argument. Others would mention proper financial controls. In some cases we can offer an uphill reasoning that we need RA to demonstrate that the telco is taking all the proper measures to shield itself from class action law suits when billing is not right.

To my ears, these are somewhat whining arguments. I’m looking for a clear and decisive answer, similar to one where no one dares to ask the cost of not having a billing system. At least in the case of billing, the reply lays within the question. Can somebody offer a similar answer for RA?

talkRA might consider offering an exciting prize for the best reply!

David Leshem
David Leshem
David is an expert in enterprise solutions: billing, profitability, business intelligence, customer retention, churn and revenue assurance.

Away from the office, David is a keen photographer. Visit davidleshem.com to sample his photographic work.
  • Very interesting topic!

    May I answer with a question?
    What is the cost of not having life insurance, car insurance, health insurance,…?

    If all goes well… nothing, right?

    The problem is that like in our lives… many systems don’t always work well (alone or between themselves) and they are not managed by machines or god.

    As an example: It is very interesting to observe how billing systems providers are now using or recommending RA consultants and RA systems to help in their migration procedures.

    Best regards,
    Sergio

    PS The CXO question is also very relevant… maybe I will return to address it.
    PS2 Why do we need Auditors? Why do we need derivatives?… Risk management. BUT… RA offers much more value than those.

  • David Leshem

    Sergio,
    Your attempt to refer the RA to Insurance is self defeating.
    Most insurance companies , excluding few exceptions like AIG, are doing remarkably well. Which is the opposite with RA vendors, at least for the ones that publish financial data (Ectel, Subex, TMNG)…
    For others we can make educated guesstimates/deductions.

    David

  • Hi David,

    To the question you made in your article (again, a very interesting one):
    “what is the cost of not having an RA? (…) I’m looking for a clear and decisive answer, similar to one where no one dares to ask the cost of not having a billing system.”

    … I proposed an answer, using a question with an analogy:
    (For a company or a person) “What is the cost of not having life insurance, car insurance, health insurance,…?”

    The cost of not having a Revenue Assurance Solution and Practice (developed internally or bought from a solution provider) is very easily measured when you (as a company) “die”, have a “car accident” or have to be submitted to a “surgery”.

    With such complex systems and processes environment in the Telecom industry (Network, IT, Marketing, Customer Service, etc…) everyday all sorts of “accidents” happen… from “small finger cuts” to “near death experiences”.

    You can agree with it or not, but of course this analogy has nothing to do with comparing the financial performance of the two “industries” in a specific moment in time (BTW I think all the Revenue Assurance Systems and Solutions providers consider a compliment to compare this small group of small and medium sized companies within the technology industry, with the insurance industry as a whole).

    Best regards,
    Sergio

    PS I do not recommend anyone to invest in insurance industry stocks. Their balance sheets are in even worse shape than the banking industry… fortunately everyone is afraid to discuss it.

  • Lionel Griache

    Staying with the analogies…
    The expense of an RA department is in the same class as the expense for regular cancer screening. It’s not enjoyable and you would rather spend the money on something else but it is key to detect anomalies early and take actions promptly to remain healthy, rather than waiting for the first symptoms of illness.
    You can surely live without revenue assurance…but if you are responsible and aware of the realities of this world, you will spend a little money on it.
    The cost of NOT having RA is therefore clearly a personal thing and different for everyone. It will be higher for the ones who’ve already experienced that peace of mind. It will be low or null for the others.