10 RAFM Issues: Caring for Customers

This is the sixth in a series of 10 articles about the trends, risks and challenges facing revenue assurance and fraud management. The aim is to survey practitioners about which topics they find most important. Unlike a conventional survey, I will rank the results based on which articles are read most widely, instead of asking people to write in and give their opinions. This post is about a topic which comes up on a routine basis but tends to be discussed on an oblique basis, even though opinions vary greatly. To what extent should RA and FM practitioners be responsible for caring for their telco’s customers?

Many ways to care

Whatever you think the objectives of RAFM teams should be, there are numerous ways these teams can care for customers, without directly benefiting the telco.

  • Detecting and preventing frauds where customers are the victims although the telco suffers no loss;
  • Assuring the accuracy of charges levied by the telco to prevent customers being overcharged;
  • Detecting and preventing overcharging by other parties where the telco collects on their behalf; and
  • Executing efficient refunds where the telco knows mistakes were made but the customer does not.

These examples are all pertinent because RAFM teams have relevant skills and data. RAFM functions are likely to be better equipped to perform these activities than other functions in the telco, and there may be significant synergies with their other work. For example, a test that rating plans have been correctly implemented can equally well identify undercharging and overcharging.

Whose job is it to care?

The argument against RAFM teams taking these responsibilities is that other people in the telco are supposed to care for customers. This is considered especially true where RAFM reports to the Chief Financial Officer. But is this a cliché?

Finance directorates are often considered to be culturally suited to compliance oversight. This may also lead to overlap with RAFM. But is it wise to only care for customers when an external party tells us to?

What were we measuring anyway?

Some of the positive arguments for ‘caring’ is that it will also boost profits. Dissatisfied customers churn, unhappy customers are more costly because their complaints and queries consume the time of customer services staff, overcharged customers will demand goodwill credits… there are many ways to argue that the bottom line is enhanced by control and protection activities that might directly reduce the top line by lowering the amount charged to customers.

However, this argument is simplistic. A measure of performance which only considers the upsides to RAFM teams is fundamentally biased. Not overcharging a customer will lower revenues collected from them, whilst some errors are never spotted by customers, so cannot lead to churn or complaints. Whatever measures are used to assess RAFM performance, there will always be some cases where the right business and moral decision will run counter to the numeric targets set for RAFM.

Perhaps the key trend is for RAFM teams to link their work to protecting the reputation of a business. An increasing number of senior RAFM managers see their roles as guardians of the telco’s reputation, and prioritize their work accordingly. This makes sense; overcharging can lead to reputation damage, and share prices can be hit by cyberattacks aimed at compromising customer data in order to steal from them. Accuracy audits, security controls, good data integrity and robust fraud prevention all serve to protect the company’s reputation. But reputation is impossible to methodically measure, and there is no simple relationship between the detail of the many mistakes and frauds that plague telcos and the few which may percolate into customer consciousness and so exert a significant influence on shareholder value. This challenges the common assertion that you cannot manage what you cannot measure; reputations are not susceptible to measurement but surely do require management.

You pays your money and you takes your choice

Whilst the performance of RAFM teams is usually expressed in dollars it is apparent there are many different ways of measuring value. And whichever measures are adopted, there will be still be a debate about whether the measures are promoting the right kind of behavior in every instance. Perhaps it would be easier to make caring for customers an explicit requirement and to use that as the starting point for determining if the company’s reputation has been adequately served by the work of RAFM. Or a different telco may take the opposite approach, and treat RAFM as an atomistic force which focuses on a narrow set of financial targets whilst needing other parts of the business to keep us under control or provide the balance we cannot.

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.