This post is not so much a commentary but more a call out for some assistance.
Imagine that your telco has 1,000 corporate customers, all with individually negotiated tariffs across the full set of products and services you provide. The details reside in multiple contracts and variations with discounting provided at many different levels – service, product, account, location – all dependent on what is negotiated with the customer. This has resulted in a mix of standard and customised pricing structures and solutions within the billing environment to meet the contractural obligations for charging.
Now imagine, you are asked to provide revenue assurance validation over these customers to state that there is neither over nor undercharge or, if there is, to identify it precisely so it can be addressed. One way is to extract the bills, extract each contract and then compare the billing system output with what is expected based on the contract. However, this is often a cumbersome process that takes time and effort and, due to the individual nature of each contract, there is very little room to extrapolate the findings from one customer across to all.
My question is, how would you go about providing revenue assurance in this instance?
Short answer: I would not try to do revenue assurance for these customers, at least not in a way consistent with what most people think revenue assurance is.
Most forms of RA are a type of test. Testing is more efficient if you can perform the same standard test over the same standard output. It is less efficient if your testing needs to be adapted for each individual output. The drop in efficiency begs the question of whether testing continues to be a cost-effective approach to quality control.
I know of one telco that does exactly what you suggested was cumbersome – comparing individual bills to individual contracts. However, they put a clever spin on it. Instead of positioning this as an in-house function, designed to safeguard against revenue losses, they used as part of their sales pitch to customers, protecting the customer from over-charging. The check was performed by a third party, thus ensuring impartiality. I can see this being sold to the customer as a value-add, even in an economic downturn, although the benefits could obviously cut both ways.
You point out that there is little room to extrapolate if each contract is different. That suggests taking a different approach – one more suited to traditional account management. In other words, instead of trying to do multi-account assurance, ensure that account managers have proper incentives to ensure the cash received from customers is maximized – and that credit notes are minimized. Then place the onus on them to ensure bills are correct. You can argue that account managers may not do an adequate job, but if a revenue leak ultimately equates to reduced take-home pay for the account manager, and they still do not check, the problem is really with recruitment.
Hi Mike,
An interesting scenario and one I have previously experienced. A customer requested revenue assurance over it’s 100,000 individually negotiated customer contracts and expected the consultancy I was working for to data input the 100,000 contracts into an RA solution to do some sort of comparison. I immediately dismissed this approach, as it was just as liable to result in discrepancies as the original inputting of the contract. The approach I suggested and adopted was as follows:
Identify the Systemic Issues – the standard practice of ensuring that all of the OSS/BSS work as there supposed to. You assume that the configuration is correct(the contract) and ensure that the configuration is used correctly and result in the deemed correct charging. You also ensure that all transactions(CDR’s) get processed from end 2 end.
Equipment Audit – ensure that all customer equipment is represented on their bills(don’t worry about the price, just the presence). What you are aiming to do here is highlight contracts that need to be reviewed ie if a customers bill says they have a corporate network with 200 extensions, you can compare this to the actual network inventory to see if they have more/less.
Variance Analysis – Hopefully your sales department have some sort of guidelines on the way they construct the customer tariffs. If so use these rules and make sure no customer falls outside the boundaries. If not compare all customer pricing models and look at the upper and lower 2% of any given pricing point(or combined tariff – you can set your own grouping levels, dependant on time/resource to do the work).
The above will not provide you with conclusive proof of accurate billing, however it should highlight areas that need attention and give you a good feeling as to whether or not real issues exist.
Eric, Dave,
Thanks for your comments. Bear with me if I critique these a little.
Eric – your comments are ideal for the “moving forward” situation but perhaps not so much for the “where we are at now” scenario. I agree that remunerating account managers on revenue to incent them not to provide credits and to check billing is a good approach but I would ask:
1 – how many account managers understand the contract in sufficient detail and then have the expertise to be able to accurately recalculate a bill nased on this
2 – if you were an account manager and the customer threatened to leave, I am sure you would give a credit to keep them happy. Short term pain in your pay packet but longer term it would even out.
The third party check is an interesting idea and could lead to some interesting findings.
Dave – I like your ideas as well but lets assume the systemic (non customer specific issues) have been addressed already such that the concern here is that the contract says A but we bill B. An equipment audit is probably a good idea but getting this information could be complex – especially if (for PABX say) you don’t install the equipment. Lastly, variance analysis is the path I think I would consider but then these contracts are highly negotiated so that you may give very cheap voice to win a data contract. I would expect these would be seen as outliers but without knowing the detail of each contract you may go down a wrong path.
I think I need to refine this a little more and if I work it out, I’ll let you know.