Returns on Revenue Assurance

Anyone who knows me must sometimes hear me wittering on about the TeleManagement Forum. Over on their site, there has been an interesting debate recently, about what the expected returns from revenue assurance should be. This got me thinking.

Well, revenue assurance is much like drilling for oil; thanks to Clare Patterson for originally suggesting that metaphor to me. You may strike it lucky, you may not. RA is fairly speculative and you have to suffer a fair bit of cost on faith before you start making returns. The value of the oil industry goes up and down, but the value of a oil company is linked to the value of oil.

So if you assume a rational market, it should be easy to calculate the average returns from RA – just work out the average returns of the average RA vendor. Why has nobody ever calculated this? Partly because the sector is too small, I suspect, but partly because it would give us an unpalatable truth – the expected returns are rarely the huge “oil strikes” that so often get used to make a sales pitch for RA. Even if you conclude there is a high premium for risk in RA projects – the risk of getting nothing instead of a big pay off – and that this is all taken by the telcos rather than being shared with the vendors, then returns enjoyed by vendors still look lower than most of the estimates of the benefits would suggest.

No matter how well you pitch the benefits of a product, and you can think of revenue assurance as a product too, the value is probably best determined by its customers, not by salesmen….

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.