Why should Risk Managers make friends with Billing Managers? I can think of three reasons:
- Many risks, if not managed properly, manifest themselves in symptoms captured by the Billing Manager. DSO, billing adjustments, goodwill credits, leakage… the Billing Manager is exposed to many of the indicators of root failures that come back to inadequate operational, financial and sometimes even strategic risk management.
- Billing Managers often end up sympathetic to the need to manage risk, precisely because they are forced to deal with the result of inadequate risk management. Indeed, the development of risk silos like fraud management and revenue assurance is often aided by the Billing function. In many providers, such silos actually grew out of the Billing team.
- We all know of horror stories where the pressure to launch a new product was not matched by enthusiasm to devise a suitable billing solution. I have even known whole communications providers whose ‘revenue assurance’ to-do list could be neatly summarized by one task: implement a proper billing system! If a recurring failure to deliver adequate billing does not count as an example of rotten risk management, then I do not know what does.
One of the greatest causes of uncertainty is lack of information. Not having sufficient data also means risks cannot be quantified. Because Billing is a key nexus of data – bringing together vital information on revenues, direct costs, debts and customer satisfaction – it provides a key resource to aid the management of risk.
It is heartening to see that many Billing Managers are conscious of the advantages of proactive risk management. I recently wrote an article for BillingOSS Magazine about the connections between Enterprise Risk Management (ERM), Billing and the risk silos. The article begins on page 14 and the magazine is available online from here. The connections were also underlined by the TM Forum when setting up a collaborative team working on ERM. The TMF’s ERM team grew out of the TMF’s Revenue Management program. To find out more, you can visit or join the TMF’s ERM community here.
Billing are often left to clean up the mess when upstream decisions, processes, data and systems go wrong. Like so much of life, the people who most appreciate the need to think ahead are the people who otherwise have to deal with the consequences!