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….