Why People Are More Valuable Than Tools

I read Eric’s post about how the TM Forum has reduced the importance of people within their new Revenue Assurance Maturity Model. As both a founder of Compwise, a software business, and as a human being who helps big businesses to analyze their data, I wanted to explain why I feel the TM Forum has made a mistake.

For the last couple of years I have switched sides, wearing a client’s hat instead of a vendor’s one. One financial institution, an issuer of various charge cards (a.k.a. debit cards, credit cards, prepaid cards et al) asked me to check their product portfolio and assess their profitability.

At some point I had found myself conducting a typical RA audit assignment where the billing is rather complicated, including about 7 or 8 bill cycles (per TRX, daily, weekly, monthly, quarterly, semi annually, annually and a sporadic one). The tool I used for this audit was Microsoft Excel – with some reliance on “a little helper” assisting me with advanced Excel functions, as my command of Excel is fairly basic. The principles I followed were same as used by any auditor or RA practitioner working in telecoms.

I had analyzed one product only, analyzing the revenue streams, of what is called a 4-party model, which in practice involves around 6 or 7 parties. My analysis revealed hundreds of thousands of dollars in incorrect charges submitted to the financial institution.

I guess if I had procured dedicated software, implementation et al, this would produce better results than my humble use of Excel. However, for zero investment in software, and within a very short time frame, it is far more effective to get 90% of the value that can be saved, rather than waiting for 99.9% of savings to be delivered after the long timeframes involved in a tender, proof of concept, procurement negotiations, purchase and implementation of a specialized solution.

This also means the incremental value added by a specialized solution is not the 99.9% of savings that are reported by the tool. The incremental value is the 9.9% it delivers above the 90% that I could deliver using Excel (minus the costs of engaging me, but plus the costs of purchasing the solution).

Down the road, the data I used for my audit was exported to a BI tool. This makes it easier to analyze the data and find the same mistakes. Today there is a new generation of BI tools, which are agile, cheap and lightweight.

But whilst tools are becoming cheaper and more powerful, it is too easy to focus on the cash costs of tools and to neglect what people need to do, but tools can never do. We often take people for granted, even though people may be part of the problem that needs to be solved.

In my project for the financial institution, the most complex component was to establish the organizational consensus and acceptance for the project. It was obvious the process and the resulting findings would radiate on various departments and some stakeholders might feel concerned with the findings. The key challenge was not the technical part but rather the internal sales process, applying sensitivity in order to create an organizational joint effort where the goal is achieving an improved level of audit and control as well as improved risk management. This obstacle has nothing to do with technology. It is all about people. The source of the challenge lies with people, and only people can overcome it.

Lastly, I recall a situation 7 years ago when I was still running Compwise, selling specialist solutions to telcos. TMN developed an internal tool for churn analysis, with the help of their local IT partner. Based on their CDRs and tariffs, TMN’s in-house tool delivered 90% accuracy compared to the 99.9% accuracy of the Compwise churn simulation tool. TMN invited me to a demonstration of the results. My response was… “well done”. For them, 90% accuracy delivered the right return for their stakeholders. Who am I to argue otherwise?

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.
  • Daniel Peter

    Hey David
    Very interesting article.. Tools are there to complement people, but cannot be considered as a substitute; therefore people are certainly more valuable than people. But CSPs must evaluate the delta 9.9% savings that could be achieved using software instead of being satisfied with the 90% savings that came from stop gap arrangements like excel. Excel based in-house solution is very powerful and provides good results for a consulting assignment, but there are limitations for these solutions. Now that the cost for a full fledged risk management solution has considerable reduced in the market, CSPs should go for a complete solution and target to cover 100% of the risks. Good software also stabilizes the processes and ensures certainty of the saving in the long term.

  • @ Daniel,

    I think both you and David are right. It’s often the case that the extra 9.9% of value delivered with superior tools will make it worth spending the money to acquire those tools. But David is right to point out that the extra value generated is the 9.9% – not 99.9% – because otherwise we are pretending that people can do nothing without first acquiring tools. Many times, people will be able to do rough and basic checks which will deliver a lot of value, even if they are working with unsophisticated technology like Excel. And if there’s nobody competent to do some basic sample checks, that begs two questions. (1) Will anyone be able to generate value by using the off-the-shelf tool, after it has been implemented? (2) What makes you think the value that could be delivered by the tool is worth the money being spent on it?

    In recent years, I think some vendors have ‘turned a corner’ when it comes to thinking about their customers. Some of them maybe had an excessive tendency to assume the customer knew nothing, and it was the vendor’s task to educate their customers. That approach certainly helped spread revenue assurance into more telcos, overcoming internal resistance from management and encouraging RA and Fraud Management staff to be recruited. However, if vendors always take the approach of being the teacher, and of downplaying the skills and knowledge of staff inside the telco, they will struggle to learn from their customers. And that results in vendors having less intelligence about telco needs, which hampers their drive to innovate and to anticipate demand.

    In short, there is a natural limit on how well vendors can ‘push’ their products and services into telcos. They also benefit from having skilled staff inside the telco ‘pulling’ for new products and services – because they perceive needs that the vendors will not be aware of. But for staff to do that, we have to foster an attitude where telco staff are respected and empowered. Only this will allow them to do pioneering work – even if it sometimes involves using unsophisticated tools like Excel – and then get appropriate recognition for the value they add to the business. So really the better vendors have realized they do not benefit by the ‘dumbing down’ of telco staff. There is more chance of a win-win if staff can first identify and prove the need for enhanced assurance, and then make the case for further investment in tools. And this can lead to a virtuous circle, where staff do pioneering work, sometimes in a manual way, which later gets automated and made more efficient, which releases the staff to do more pioneering work, which gets automated, releasing the staff…

  • Mike Willett

    Agree with everything said above…

    Regardless of whether you are using Excel (which can do some pretty impressive stuff these days), the value comes from a smart user (or team) and application of the technology to identify and solve a problem. To me, it is the user that drives the business value by identifying a problem that no-one knew existed and/or applying technology to support the resolution of the problem that no-one else had previously solved.

    Of course, RA itself was the response of ideas, thoughts and vision of people to the challenges of managing complex telecommunications processes and technology and only once these could be articulated by people, could they be codified into system logic.

    I work in the Big Data space more than RA these days and the discussion around AI (artificial intelligence) vs. IA (intelligence augmentation – http://en.wikipedia.org/wiki/Intelligence_amplification) is well worth having an appreciation of.

  • Daniel Peter

    Eric:

    Success of an RA tool implementation strongly depends on the participation of the telco’s RA team; implementation approach includes validation of business rules by the users to make sure the tool delivers what is expected by the user. Users dictate what is expected from the implementation and the vendor facilitates the same. Of course off-the-shelf tools are becoming common these days since the vendor incorporates his domain expertise in the tool, covering 80 to 90% of the requirement, rest to be customized as per the user’s requirement. I believe RA off-the-shelf tools is very close to COTS but also allow users have their say on the rules and logic. I would say that telco has to strengthen their RA team and should carefully evaluate a good RA tool that would provide them RoI and meet their requirement

    I agree that there are vendors who assume the customer knew nothing but they are wrong, and we cannot generalize that all vendors make such assumption. There are situations where the telco is in a nascent stage in RA and bank on the vendor for the domain expertise, but the vendor should realize that the situation will change and telcos will quickly hire a good RA team. Telcos will also make sure that their RA team’s level of expertise is very good and are empowered. Vendors should not think that they are above the users and the customers have to be given their due respect. I have seen failed implementation when user participation is poor since they don’t have a good RA team; the outcome was bad for both — the telco and the vendor, therefore user participation and telco’s RA team expertise in very vital for a win-win.

    • @ Daniel,

      We agree 100%. The quality of the telco’s RA team is the key limiting factor – without competent staff who are empowered to do their job properly, then no tool can deliver value, even if the vendor performs a miracle by getting it adequately implemented. What you say about telcos who rely on the vendor for expertise is true. But in the end, a vendor’s expertise can only come from their experience of working with other telcos. Each telco is different. And whilst the vendor might learn some things about a telco they work with, they will not learn everything about that telco. This is why staff who are dedicated to assurance in the telco must be developed in such a way that they can identify, for themselves, the issues faced by that telco – some of which may be unique, others will be unfamiliar to the vendor whose advice they relied upon. When they do this, they will start to ask vendors for new functionality, to address issues that previously went unaddressed. This is good for the telco. And it is good for vendors – they learn something new, which might be incorporated into their offerings, and passed to other customers. Some of the innovation in assurance must be instigated by customers, and that requires telcos to adopt an attitude where they do not wholly rely on their vendors to tell them what to do. And I think this win-win might sometimes be helped by promoting more examples where telcos innovated, even though no telco has a marketing budget to promote this kind of victory, and a vendor’s marketing budget will naturally be focussed on promoting their own company.

  • David,

    It’s a great story. And as a colleague, I know your humility would normally not allow you to speak out as you have. But it was either contribute or face the horrors of the Eric Priezkalns dungeon: no food, water, or email for 15 days :- ) Eeeek!

    I, too, see opportunities for humans and robots alike.

    Mike, thank you for introducing Intelligence Augmentation. Look forward to exploring that. It reminds me of the telecom term “swivel chair engineering”. Imagine: those Bellcore guys of the 1980s actually designed software assuming there would be highly intelligent network engineers operating them.

    And my mind also goes back to a talkRA column you contributed many years back where you pointed to “business rules” rather than the “revenue leaks” as the broader mission of an RA organization.

    Well, if you go down that road, there’s so much for software and intrepid Indiana Jones data explorers to do in the telco Temple of Doom.

    So far, in fact, RA has only conquered the “easy”, consumer side of telco. It’s hardly made a dent on the telco-to-enterprise side where individual-case-basis deals, VIP tracking, and multi-layered rating are the order of the day.

    But plenty of pioneering work is underway from the usual RA software suspects:

    Subex is breaking new ground in network capex assurance.
    cVidya is exploring the power of fraud detection crowd sourcing and fraud-as-a-wholesale service.
    TEOCO is delivering fine-grained profitability analysis using Radio Access Network data.
    WeDo is evangelizing business assurance in retail and finance industries, and;
    Telarix is pouring R&D into translating contract terms into invoices and audit routines.

    Is there room for David Leshem-esque Excel wizards? You bet. [but a question: is a guy who architected Amdocs’ mediation system and started an analytics firm just your average RA analyst?]

    The irony of it all is that we may actually go back (or maybe forward) to Excel as the focal point of analytics.

    Consider this — companies in the “enterprise search” software business like Ontology, Splunk, and HP Autonomy are actually linking Excel spreadsheets into “soft integrated” (no hardwire schema) applications that solve real telco problems.

    The beauty of telco is that it’s a complex industry that’s becoming more tangled. Clouds, shared data plans, spectrum allocation, network function virtualization, SIM card bypass… Can’t imagine how an alert robot or human could get bored working in this industry :- )

  • I like the interesting discussion but dare to disagree with the word “more” in the subject title. You can not separate the two or compare the significance of the two. As the complexities are increasing with the evolution of technologies and with ever increasing high volume of data, the need for more, better and efficient tools is also increasing. But then you need people to analyze and interpret the data and take action on the results as produced by the tools.

    I agree with Daniel that at times simple tools like excel may produce quick results though not always. But then it is also a tool needing a person to use it. Let us remember that there were times when Pen and Paper were enough. I still remember using annuity/NPV tables for financial analysis during my MBA and then financial calculators and now excel during my job. Can any body think of going back to printed tables?

    The problem what the world is facing now with varying degree across the globe, is not the people but quality people, able to use the data and tools comprehensively and meaningfully. There are so many tools that it is becoming ever difficult to even make a best choice of tools and data.

    Since people and Tools is a great subject: May I suggest the next discussion topic as “People and Tools complementing each other”

    Ahmad Nadeem Syed
    Director Revenue Assurance and Fraud Management
    Mobilink

  • Michael Lazarou

    Completely agree with the statement that tools will marginally (90 vs 99.9 %) increase efficiency. Ultimately this and the efficiency of getting the 90% done with less time/effort is what we seek. I’d argue that a well versed programmer get setup some pretty good tools using open source software and tailor it to the telco he is working for. But then it all comes down to resources/budget: who will give 4-5 people the time to get this done without constantly demanding results. At the end of the day this is a niche sector of telecoms, so you go buy a niche tool and expect/demand immediate results. If it was something that was more mainstream you could use standard tools and get excellent results – you still can, but not as efficiently and nobody is willing to let you have a stab at it because the general understanding and even the position of RA on the priority list of the board is low.