‘So, Kingsley, when you are not busy finding faults with people and their work, what else do you do for the company?’ the Chief Marketing Officer cynically asked. Many Revenue Assurance and Fraud Management (RAFM) leaders have been asked this or a similar question, sometimes to get under the skin of the RAFM professional, out of genuine ignorance of what we do, or because they expect more from RAFM.
Support functions are evolving into professional service partners for frontline functions. Human Resources (HR) have moved from just being an administrative function to consultants within the business, partnering with frontline functions to provide tailormade solutions to their HR needs, so members of these functions and their managers can focus on what is important, their core responsibility. Also, increasingly, Finance is evolving from being a standalone governance function to a more engaging business partner, supporting other functions like Sales, Marketing, Network, and IT to meet their needs, which by extension are the needs of the business. Traditionally, RAFM being a control and compliance function has worked independently, with little influence from operations because there is a belief that, being removed from operations, RAFM can provide effective second-level controls independently and objectively without the risk of bias. A bias might arise if there is a cozy relationship with other functions.
The Place of RAFM in a Telco
Today, in most telcos, the RAFM department can be found within the Finance function directly reporting to the CFO or Finance Director. This has not always been so. In the early days of RAFM, organisations struggled with where to situate this unique telecommunications discipline. Some telcos had Billing Assurance as part of Information Technology (IT) to assure billing accuracy. This had several limitations:
- Scope limitation, as their primary focus was billing accuracy. Other aspects of RAFM like network assurance and fraud management were left out.
- Lack of independence as they reported to the same person responsible for preparing the bills, the Director of IT or Chief Information Officer (CIO).
A few telcos had the RAFM team reporting to a Chief Risk Officer or Director of Internal Audit who also supervised Internal Audit. This placed the CRO in a position where he was responsible for operational control and periodic control and assessing the sufficiency of operational controls from an independent point of view. This arrangement compromised the integrity and independence of the CRO/Director of Internal Audit as he/she became responsible for the second and third level of control (the first level being the responsibility of the operation process owner).
There was also the experiment of making RAFM report directly to CEOs. While this gave RAFM visibility, it struggled to get the attention of the CEOs because they are more focused on growing the business and may not give much time to supervising a control function.
The present position of RAFM, reporting to the CFO, appears to be the most logical. After all, the CFO oversees the revenue being protected by the RAFM team. This is a natural fit as the CFO is an Accountant by profession and the custodian of internal controls and financial governance within the organisation. Although Finance has been a good home for RAFM, this classification comes with its challenges. The RAFM team is technical, made up mostly of non-accountants, reporting to an accountant that typically do not possess detailed technical knowledge. Despite this challenge, RAFM has flourished within Finance more than it did elsewhere.
Unique Knowledge and Experience of RAFM Professionals
Telecommunications is like a city with different parts, and like a city, not all residents have the privilege of living and experiencing life in every part of the city. RAFM is like the police unit that traverses the city keeping the peace and so has a good knowledge of every community within the city. The RAFM function is unlike any other function within a telco because it not only has an overview of what is done in other functions but also has appreciable knowledge of how it is done. From Network elements to IT systems; from product creation, pricing decisions, and customer acquisition by Marketing to product distribution and sales incentives by Sales; from service provisioning by Customer Service to accounting for the revenue by Finance. The RAFM professional engages with all functions of a telco’s operation and provides second-level controls to their activities.
To effectively put on these many hats, the RAFM professional must master technology, business, and finance knowledge and skills. The RAFM professional is also able to offer a second opinion, validating arguments made by others. This is done through testing and reconciliation of artifacts.
Operations – technical and business – tend to view governance and controls as a non-value adding add-on that slows down execution, hinders creativity, and points fingers when things go wrong, so they view RAFM as vindictive fault finders or meddlesome interlopers. The result is that RAFM is left in the dark about initiatives introduced by these functions or methods of execution or incidents of primary control failure. In turn, RAFM highlight system and process failures as big discoveries that were made against all odds.
This cat and mouse approach has made governance a lot less effective than it ought to be and the company, whose interest all parties work for, suffers.
In his book, The Strategic Partnering Handbook, Tony Lendrum define business partnering as:
the development of successful, long term, strategic relationships between customers and suppliers, based on achieving best practice and sustainable competitive advantage.
The definition highlights the components of a successful partnership:
- Common objectives
- Achieving best practice in operation efficiency, the right things being done the right way at the right time, otherwise known as “right first time”.
- Competitive advantage – edging out the competition in the market by being more efficient and effective with resources. In a market where services are homogenous because licenses, technologies and even equipment suppliers are similar, the price and quality of service can only be the differentiating factors. Qualities like being first to market, simplicity of process, elimination of waste can be defining attributes of a good telco.
- Long term and strategic goals connote that the partnership is for the unforeseeable future and it acts at operational and leadership levels.
There is a case for a partnership between RAFM and operations functions.
How Does the Partnership Work?
An effective business partnering model is built on a few pillars:
- Documented Process – As with every business relationship, there must be some guidelines that state the roles and responsibilities of each partner. This eliminates ambiguity at difficult decision points and areas of conflict.
- Knowledge of the business – The RAFM professional knows how things work in other parts of the business and can uniquely interpret business requirements into technical language that IT and Network understand and vice versa. So RAFM could serve as a bridge in the knowledge gap between business and technical matters, working as a knowledgeable advisor to those functions in matters that affect the other.
- Communication and Networking – The value of good communication to business cannot be overstated. The expertise of RAFM professionals puts them in a position where they can speak intelligently on issues. However, speaking intelligently only covers ‘what’ should be communicated; RAFM must still improve on how, when and whom to communicate with in order to get the intended result. Communication can become highly effective if there is underlying mutual trust and this comes from building relationships with other functions.
- Courage and Integrity – While building good relationships across the business is valuable to all, it cannot be at the detriment of doing business. The RAFM professional must not only have integrity but must be seen to have integrity. He or she must courageously hold up a mirror to the business when necessary.
For the benefit of the business, RAFM controls cannot be add-ons to the process but an integral part of the process. RAFM is neither a function you only go to when there is a loss incident, nor are RAFM professionals magicians put in place to sniff out faults. Controls can only be as successful as the whole of the company wants them to be.
Some areas of partnering are: new product development; provisioning; implementation and upgrade of new systems; bill cycle management; churn management; sales incentive implementation; and roaming and interconnect agreement, among others.
In conclusion, RAFM must reach out to the rest of the business, build a sustainable relationship, and proactively prevent loss by being a part of the process, not removed from the process. There must be a paradigm shift from fault reporting to prevention and this will only come from engagement.
This article is for general information and a broad discourse on this issue. It is not offered as a specific solution to this problem.
If you have a question about the article, please contact the author, firstname.lastname@example.org.