Saving Pennies, Saving Face

David’s recent post, asked a difficult question about which countries appreciate revenue assurance, and which have little interest. This started me thinking. One of the difficulties in comparing revenue assurance is that a telco that seems to have no issues may have an RA team that is not reporting them, and a telco that seems to have lots of issues may be benefiting from a hardworking RA team that finds them all. It comes down to culture. Pride can be a powerful motivator. On the other hand, the need to save face can stop people from admitting and dealing with the real issues they face.

I remember one relevant story from my early days as a financial auditor. I worked on an odd mix of clients, including a Japanese travel agency based in London, that serviced a variety of Japanese corporate clients also based there. Like accountants in most small businesses, they focused on the day to day essentials and let the auditors worry about the financial statements. Come the end of the financial year, there are always some transactions where the bills have come through the post, but nobody has got around to paying for them. You need to be careful that some do not get missed. To check, you ask the accountants for all the recent bills they got in the post, pick a sample, and see if they were included in the totals. We asked the accountant at the travel agency for the paperwork like usual, and he told us which pre-prepared file he had put it in. After coming back from lunch, and quickly reviewing the invoices, it became obvious there was something wrong. There were only a few invoices in the file, yet a travel agency deals with lots of transactions every day. Coming back after lunch, we asked the accountant to come into the windowless room where we were working, and proceeded to explain what we needed. He insisted that all the paperwork had been provided already. The accountant was Japanese, like everyone else at the business. We thought there had been a misunderstanding, so we explained again. Again, he insisted. So we tried to explain why we expected to see a lot more invoices, and he shook his head and said we had them all. It was hard to work out if the problem was to do with language, so we asked again. His reaction made it hard to tell if he really did understood, but he said there were no other invoices. We went on like this over and over again… for the rest of the day. We knew the invoices were too few in number, and it seemed unlikely the accountant had deliberately made an error that was so easy to spot. Over and over we asked, and over and over he, very calmly, slowly and quietly, said he had provided all the invoices. Come leaving time, we shrugged our shoulders and decided to give up, whilst not entirely sure how we were going to handle what seemed to be a serious obstacle to checking the accounts.

What were we doing wrong? In my ignorance, as a junior auditor, I failed to consider cultural differences. Keeping the accountant in the room, and insisting on the invoices, was my mistake. I should have realized that language was not really the problem. The problem was with the threat of losing face. From my limited experience, British accountants would provide you with paperwork when you asked. However, this Japanese accountant took it as a point of pride that he had given the auditors all the paperwork they needed at the outset. Whilst we thought nothing of the fact that some invoices might not have been provided until we asked for them, he felt at risk of losing face. Half of that day had been spent going over and over a pointless conversation. When we returned to work the next day, there was a new object waiting for us in our windowless room – a shoebox full of unfiled invoices, all with recent dates on them. The accountant had understood what we needed, he just could not bring himself to get the box whilst we were asking for it. He could leave the box for us, so long as he did it when nobody was looking.

The Japanese accountant was diligent, and did his job well. He did not want to lose face, even if it seemed to us like that there was no reason why he would. Diligence is vital to good revenue assurance, but pride can sometimes cause obstacles to communication. There are no easy generalizations, but attitudes do vary with cultures. When it comes to judging how good revenue assurance is across the world, we need to listen to what people say, and what they do not say, and also understand what motivates them to talk and what causes them to be silent. This will be especially important to revenue assurance, which is concerned with the inadvertent loss of revenues, and the action needed to save them. We need to understand a person’s motivation to understand what they say and do. Only then can we judge their real attitude to 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.

3 Comments on "Saving Pennies, Saving Face"

  1. Nice post. How do you deal with this problem where the issue has a bit more bite to it, for example where a rating table was set up incorrectly causing revenue leakage?

  2. David Leshem David Leshem | 17 Sep 2008 at 1:46 pm |

    Eric, Thank you for the above story about cultural difference. What really makes me curious is the other side of the coin. How the Japanese accountant would reply if he was asked same question by a local countryman.

    I recall working with a Far East telecom customer, implementing an RA system. Some how, I was able in a relative short time. to develop an open relationship with the Head of RA team. This person was open mined, highly intelligent and brave. Once over lunch along he/she said to me “…in our culture we rather speak for our believes and die honorably than live miserable life and behave cowardly…” (or something similar along this notion)
    And surely enough, not long after, this person lost his/her job. While on the surface the implementation project, experienced smooth implementation identifying only minor issues…

  3. Hi Marais,

    You ask a tough question: and I think you know it!! ;)

    This is not a complete answer, but one thing I would emphasize is that it is not the job of RA to allocate blame. In any telco, there will be people who are not diligent, there will be people who lack the knowledge to properly meet the expectations set for them, there will be people who are under pressure and cut corners as a result, and people who make a simple mistake. Whatever the issue, and whatever the scale of the impact, it is not for RA to determine which description is most appropriate for anyone. But it is necessary to be honest. That means if someone has a responsibility, and the cause of a leakage can be associated with the failure to satisfy that responsibility, that needs to be identified and communicated. The communication should be sensitive and not judge the reasons for the failure, other than the extent to which the RA team has data which supports an analysis of those reasons. For example, the RA team may be able to determine a misunderstanding held by the employee which can be resolved through training, or a weakness in the design of an interface that encourages users to commit errors. Other than that, RA needs to stand back and allow line management to do its job.

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