Leakage Coverage Survey Results Are Roadmap from Revenue Assurance to Business Assurance

A summary of the results of the RAG Leakage Coverage Survey has been made public; it can be read and downloaded from here. The report includes both the key highlights from the data plus insightful analysis by Geoff Ibbett, leader of the survey team and a senior consultant at Symmetry Solutions, sponsors of the survey.

None of the 51 telcos who completed the survey had complete coverage across all 25 categories of potential leakage. That means every telco may be suffering losses without knowing it. On the other hand, most telcos believed all 25 categories were relevant to their business, demonstrating that they are selectively using their limited resources to mitigate a subset of all leakages.

Telcos typically have weakest control coverage in the areas of marketing, contract, process, policy and asset assurance. As a consequence, Ibbett believes there are still many opportunities for ‘quick wins’. He highlighted a few examples:

Contract negotiation, implementation, management, re-signs and terminations for corporate, enterprise and public bodies are notorious for being badly managed; in some cases, it is not even possible to find the contracts at all…

…Oversight of the assets and resources that deliver our products and services are the least well covered of all of the Key Risk Areas. Without effective Asset Assurance businesses can find themselves incurring unnecessary capital and operational expenditure, which reduces the profitability of business overall. Many of these costs can go unnoticed unless Asset Assurance is undertaken.

Ibbett also questioned the quality of controls to assure billing, charging, rating, usage and tariffs, which are typically considered central to the objectives of a revenue assurance function.

  • risk managers in telcos are not identifying some specific risks within these categories;
  • they have not implemented sufficient controls to deliver the level of protection required;
  • the controls deployed are not providing the level of protection expected from them.

Perhaps the most important long-term implication of the report is that it defines a potential roadmap for those revenue assurance teams that want to step up to the challenge of full-scale business assurance. This is most obvious when looking at the contour lines of the graph shown above. Dark green means a telco has implemented controls that would prevent or identify almost all possible leaks in that category. Yellow, orange and pink means leaks can occur without the telco knowing. If we focus on the bars at the left side of the graph, we see that one-third of telcos still have poor visibility of leaks occurring in the areas most commonly associated with revenue assurance. As we scan to the right, we get a sense of the order in which most assurance teams are likely to tackle new objectives. At the extreme right, there are hardly any telcos which have adopted a comprehensive approach to assuring their network assets. Most assurance teams would seek to increase controls over commissions, reference data management and fair usage policies before reviewing the expenditure and management of network assets.

It will be fascinating to see the results of future surveys, and how the contour lines move as more revenue assurance functions take on the expanded remit of business assurance. In the meantime, this year’s summary report is essential reading for any professional working in telco revenue assurance.

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.