Is Revenue an Optional Extra?

Every man and his dog seems to offer revenue assurance of one type or another. They may have a bit of a software that fell off the back of Microsoft’s lorry. They may know how to do a ‘join’ statement in SQL. They may follow a systematic process, which is helpfully outlined a colourful booklet they wrote using PowerPoint. The very worst have briefly stood in the car park of a telco whilst waiting to meet someone for lunch, which we all know is more than enough practical experience to do revenue assurance and save millions, and possibly even MILLIONS, for their prospective customers. It should not be a surprise that Nortel offer revenue assurance either. In a world where bankers just pretend to invest your money whilst perpetrating giant frauds, I suppose it makes business sense for Nortel to make money from checking if their customers have installed their equipment properly. What baffles me is why it would make business sense for anyone else to pay Nortel for knowledge Nortel should have told them already.

Have you ever asked Nortel for engineering information so you can do revenue assurance? I do not mean asking some dumbo “so tell me, what is this revenue assurance thing?” question. I mean asking for useful information, that would enable you to determine if there was any revenue loss because the switch was incorrectly configured. I mean, asking Nortel because your business has already spent millions on Nortel’s equipment, and maybe they should show the customer a little respect when asking an intelligent question about how the equipment works, even if you do work in Finance and do not have an engineering degree. I mean, asking for detailed information, very specific information, that only Nortel or somebody trained by Nortel could reasonably be expected to know. Have you? I have. It was painful. It was slow and painful. If given the choice between doing it again and punching myself in the face until I knocked myself unconscious, my response would be to slip a gumshield into my mouth and ask for help with taping up my fists.

I cannot blame Nortel’s people for not wanting to deal with revenue assurance people, especially after the sale has been made. They must feel their job is to deal with the network engineers in a telco. Nortel has long been a loss-making business and now it is a bankrupt business, so nobody in Nortel is going to get a promotion by spending a lot of time waffling with a customer unless it will result in an extra payday for Nortel. I appreciate that. Even so, reading through Nortel’s promotional literature for revenue assurance, I think they have a frightful cheek. Take a look at this excerpt:

Traditional Revenue Assurance solution offerings often identify issues through costly data analysis activities. They analyze and correlate warehouses of call record data from switches and SS7 networks to uncover discrepancies or expected volume thresholds not being reached. These approaches are very expensive and only identify symptoms of the actual problems. These solutions cannot pinpoint the exact root cause of the problems and cannot advise the service provider on how to fix the problems.

Nortel leverages the experience and expertise of its professionals, combined with proven toolsets, to quickly identify root cause configuration problems on the switch in a very cost-effective manner.

I completely agree with the first paragraph. A little bit of knowledge can often enable RA to solve problems far more quickly, and more cheaply, than they will by doing a lot of data crunching. What angers me is the second paragraph – implying you should pay Nortel extra for the kind of knowledge transfer that should come as standard when buying their kit. Why would you buy Nortel kit, and not expect Nortel to share the information needed so that the telco’s staff can configure it? If they have shared the knowledge, but the telco’s engineers do not put it into practice, then the problem is with priorities and the management of information in the telco. A problem like that cannot be solved by endlessly running back to Nortel for help – and paying them a premium when you do. Worst of all, if Nortel expects customers to pay additional fees to find out how to correctly configure their equipment, what hope is there that customers can just call Nortel and find out for free, simply because they are already a customer?

It is a slippery slope that starts with getting revenue assurance from an equipment manufacturer. All the equipment manufacturer can and should do is tell you how to properly use their equipment, and the obvious question is why you need to pay extra fees to make that happen. If Nortel did a lousy job of knowledge transfer, then the onus is on them to improve, without expecting to turn their failure into an opportunity to sell additional services. I know from personal experience that Nortel can do better when it comes to knowledge transfer. To be the fair, they do hand over the knowledge, but they do it in such a big lump it would take somebody with the genius of Leonardo da Vinci and the patience of Michelangelo to sort through it and identify what is most important to which aspect of the telco’s goals. Revenue generation is one of those goals. Nortel write big, thick, comprehensive manuals, but picking through them to determine which aspects of configuration could result in leakage is like looking for the proverbial needle in a haystack.

It does not get better when you try to interact with Nortel’s people. When you phone their experts, you should receive an expert answer, and not the mixture of bluff and codswallop that I sometimes got. I find it bemusing that Nortel want to offer audits to their customers. My audit of their customer service concluded you must be patient and persistent if you want to speak to somebody who can answer your questions based on knowledge, and not guesswork. In the meantime, your telco keeps losing money because of those leakages.

If the problem with knowledge transfer is not with Nortel, but with the telco’s own staff, then paying Nortel more money for more knowledge transfer makes no sense. The money will be wasted and in a short while you will need to be paying them to tell you the same things once again. Telcos need to take responsibility for managing complex information relating to complete, accurate and valid generation of revenue data. To do that, they may need to change who takes responsibility for what, change the way information is managed, and make sure that somebody close to the technology is responsible for those revenues. You can do that by making an engineer care about revenues, or you can do that by making an accountant care about engineering, but you cannot do that without finding the marriage between money and technology.

Whoever is at fault when equipment is incorrectly configured, the answer is not to buy revenue assurance from the manufacturer. All aspects of your network should work correctly, including the recording of information that will eventually be converted into cash. The real value of a piece of kit is not measured by how much it costs, but by the revenues it generates. Accurately recording those revenues is not an optional extra – it should come as standard.

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.