The Spice in Revenue Assurance

When you here people talk about possible futures for the telco Revenue Assurance industry, you tend to get one of a few answers:

  1. It becomes a well-defined niche in the ever more sophisticated world telco BSS software. The job of people in telcos ends up being to run that software in the equivalent of a “Revenue Operations Centre”.
  2. It gets embedded, SOX-style, into corporate governance frameworks as a way for big business to both execute and demonstrate management control over its underlying data. The main output is a ticklist to show the auditors and ultimately the shareholders that everything works correctly.
  3. The focus remains on generating quick win extra money for businesses, so demand for revenue assurance ebbs and flows with the perceived need.
  4. It gets absorbed into business intelligence, with assurance being one of many by-products of having a complete view of all the company’s data.
  5. Other industries emulate the approach of telcos and do similar things, meaning that that there is transferability of revenue assurance skills and technology developed in telcos to new kinds of businesses. Alternatively, telcos themselves gradually adopt new business models outside of the traditional telco space and revenue assurance migrates into those areas at the same pace.

Any or all of these may be true, and I would not rule out any possible combination of the above. What I have often said is that there is no great future in a view of revenue assurance that remains fixated on the nuts and bolts of current telco systems and processes. Many may understand revenue assurance purely in terms of the detailed workings, but if you walked into a bank and tried to persuade them of the relevance of revenue assurance in terms of switch-to-bill CDR recs you would expect plenty of blank looks. Similarly, if telco business models change then revenue assurance will end up in a smaller and smaller niche unless its abstract framework of goals and techniques are applied more widely. It can be applied more widely. Much of what is tightly branded as “revenue assurance” in telcos already exists in other businesses: they just do not have a consistent name for it. Banks do the equivalent of revenue assurance, but they would not call it revenue assurance because it is so embedded into their way of working there is no need to recognize it as a separate discipline. Think of it this way: if your retail bank was as error-prone as telcos reportedly are, you would be carefully checking every line of your statement each month. Similarly, and more obviously, revenue assurance also exists in the utilities sector. Anyone who searches the news for revenue assurance cannot have missed that there is a publicly-listed British company called Revenue Assurance Services. It focuses on the utilities market, predominantly gas. Its remit is the abstract equivalent of revenue assurance in telcos. RAS offers outsourcing and consulting services in the key areas of debt management, meter readings, bill estimation, reconciliation of provisioning to billing, and bill verification. Some of this has a straight-forward analogy to telco revenue assurance. Recalculating bills to ensure the billing system logic and reference data is correct would be the same for either sector. Other activities have little or no analogy. Telcos do not need to worry about regularity or adequacy of customer site visits to read physical meters. However, one area sticks out as being common to telcos but often left outside of the scope of telco revenue assurance: debt management. I think this is because debt collection is not a challenge specific to telco systems and processes, and is an area where you can reasonably recruit experienced staff from other industries. Most (but not all) viewpoints on telco revenue assurance associate it with problems unique to telcos. On one level, this is an advantage. If those problems are unique and significant, then the scale of error may be large and go unnoticed for a long time because people lack the experience and conceptual models to identify the risk. A narrow focus will give the best results. On another level, this is a disadvantage. Setting the scope of revenue assurance according to a narrow view of existing telco systems, processes and issues makes it harder to transfer experience to other business models and increases the chance that the telco version of revenue assurance may become outmoded and redundant.

Newshounds must also have noticed that the aforementioned Revenue Assurance Services is being taken over by Spice, the AIM-listed support services company. Furthermore, Spice intends to move its listing from AIM to the main London market. The acquisition is confirmation of the perceived ongoing profitability of a business aimed at increasing returns, across a broad variety of technical and process areas, in the utilities sector. It is also a warning shot that the Revenue Assurance Services business model could be extended beyond utilities to other sectors. Whilst the first goal will be to grow sales to electricity suppliers, Spice’s reach into telecoms, retail and banking must mean they will be looking at any opportunities to extend the revenue assurance formula further. Areas that are easy to outsource or which are relatively similar across sectors, like debt management or bill verification, will be easiest entry point for Spice to sell revenue assurance to new customers. If suppliers in the field of telco revenue assurance do not sufficiently expand their horizons, they may find that the new kids on the block are the guys and girls from Spice.

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.