Some years ago, Vodafone UK had an unusual attitude to revenue assurance. They had a billing assurance department and they believed that revenue assurance was the job of one person in that department. The revenue assurance job was responsible for the validity, completeness and accuracy of all the data that reaches the billing system. Once there, the responsibility handed over to the rest of the billing assurance department. That was very unorthodox, even back then. Most people seem to agree that revenue assurance is the end to end job and that billing assurance is the subset concerned with the billing end of the chain. There is also increasing recognition of the fact that whilst symptoms of problems usually occur in billing, the causes are typically earlier in the processing chain. That means you need to spread the revenue assurance effort across the entire chain, beginning with the collection of data reflecting new orders, network events and such.
Where the chain starts and stops, and where the most effort is needed, is not something people agree on as often. When people say they do end to end assurance they often pick a convenient definition of what the ends are. I mean convenient in the sense of what they know how to do or convenient in the sense of their authority in an organization or reflecting internal telco politics. Not many people doing end to end assurance really do much work to ensure, say, that all orders are taken correctly or that switches are configured properly. There is even more disagreement about the other end. You would have to be very unconventional to exclude billing, but their are differences of opinion about the end point afterwards. Some stop at the output from the billing system in terms of the feed to the print vendors for the bill. Some go further and really check the bills are correctly printed and sent. Some think the goal is correct reporting to the general ledger. Some think the end point is the collection of cash and the maintaining of customer accounts. So whilst most people act pretty confident when asked what the scope of revenue assurance is, you often get the feeling that there is some fraying at the ends.
Over at LinkedIn Answers, Nathan Cooks of Cell C asked an interesting question that touches on all of this.
Can anyone tell me how they would define the role of billing assurance in a company that already has a revenue assurance department?
Secondly what are your opinions on where a billing assurance department should fit into the company structure?
These are question that I have and there are some very obvious answers but I would like to know if any other opinions exist on the matter?
Thank you for your time.
You can imagine how hard I found it to give an answer within the limited number of characters allowed ;) But for those of you who do not read that site, here it is:
I have worked in telcos with a separate Billing Assurance dept and in telcos which did the same work without a separate dept. Fundamentally, I do not think there is one right answer: it depends on the telco. Do not be dogmatic. At this level, org structures are most influenced by the personal and political considerations of the people involved. It might be nice if execs tried to be objective and worked out what was best on a more analytical basis, but they also need to get the best from their employees and that may not be the same as a textbook answer.
After saying that, I will try to give a textbook answer. The consulting/software firm Cartesian issued a document where they defined the difference between Billing Assurance and Revenue Assurance; see here. They consider the end goal is the same, but that BA is a subset of RA that relates solely to the billing system(s). That seems like a decent definition to me. Cartesian goes on to say it is important to distinguish BA within RA because it involves specialist knowledge of how billing systems and the processes around them work. If you accept this line of reasoning, you have a straightforward choice. First, you could place BA in the dept with best specialist knowledge of billing. This might be a Billing dept in Finance or it might be a Billing Ops dept in IT. The advantage is that you try to have the relevant skills and knowledge in one dept, making communication, training and recruiting easier. The disadvantage is that you have no separation of responsibility. The BA team may not do a thorough job of checking what their colleagues are doing. They may suffer the same misconceptions or be blind to their faults. Second, you could separate BA from the people they oversee, to give some independence. The key here is that the more separate they are in the company structure, the greater the objectivity of BA, but also the greater the overheads in terms of recruiting and training people in BA, and the greater the overheads in terms of communication between BA and the departments that they scrutinize. The third option is to have a blend between the first two. In this case, some detailed day-to-day assurance work is performed by the individuals responsible for the processes and systems, and some higher-level assurance is conducted by a separate function, which provides a form of internal control or audit.
The right choice depends on company culture and dynamics. A telco which is entrepreneurial, is smaller, is in a rapid growth phase, or has flat management should probably keep BA responsibility with the people who do the work that needs to be assured. They sacrifice independence for flexibility. Imposing strong lines of division may otherwise lead to underfunding of BA or too many internal conflicts. A larger, more static, hierarchical, cash cow/cost conscious business is better off with separating BA from the billing being assured. They can afford to spend more time and money on staff development and training in order to realize the financial and governance benefits of greater independence.
One last point. In many telcos Billing and Revenue Assurance (and hence BA) will report into a single person who in turn reports into the CxO level. This may undermine independence when it is most needed. But having RA/BA and Billing report into different CxOs can be unwieldy. A sensible compromise would be to require Internal Audit or Risk Management to annually review and report on the adequacy of work done in BA to provide some high-level independence.