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.