Transition from the Indicator to the Director

Again, I have been far removed from the TalkRA world for some time. The reason this time around is quite interesting and I couldn’t wait to post it. The last 7 months had me working with a team on optimizing the approach to Revenue Assurance in terms of “indicating” to the analyst the key areas for improvement. The TMF already has quite a good set of KPIs, but as I’ve mentioned in one of my earlier posts, some of the Telco’s in the APAC region of the world have highly specific areas for monitoring, some of which are far too atomic to apply TMF KPIs to.

The problem that lay before us was to setup a framework and not a point indicator to the leakage. Towards this end, the shining knight said “Tally Ho” and set forth to discover the “Holy Grail” of Revenue Assurance – The Key Performance Vector (KPV). As I’m sure most of you know, a vector has two components – Magnitude AND Direction. What I wanted to do was try and see if the existing set of KPIs could be converted into KPVs. At this point, via the magic of intuition, I can see quite a few eye-brows going up and a few mustaches being twirled at the thought of “Yet another metric?!?! RA loves the metric system more than UK”.

The reason behind the KPV is what I would call a Goal Cascade (GC). The intent of the Goal Cascade is to enable the various sub-sections of the RA team to be aligned with the highest level RA goal of the organization. For example, when a Telco says “0.4% leakage is acceptable to me – anything beyond it calls for discussions with HR”, how does the analyst know the weightage of his/her function to that 0.4%? Furthermore, how should he/she interpret the functional KPI? The KPI definitely does highlight the true state of affairs at that moment, but is it in need of further improvement or should the analyst call his mates and nip down to the local pub for a pat on the back?

The Goal Cascade is an engaged activity where the trickling of the Key Goal to the various sub-sections of the RA team is cohesive – and trended over a period of time. Now comes the kicker. The KPV is not a “In-point-of-time” indicator. The KPV is the second derivative of the KPI magnitude trended over a period of time – its not exactly the second derivative, but that is the closest generalization. The KPV actually involves quite a complex formula taking into account multiple factors. If you hate mathematics as much as I do, you’ve probably fallen asleep at this point. However on waking, the end-result of a KPV is an in-line representation of

KPV = magnitude(from the KPI) +functional performance up/down+alignment percentage to Key Goal

The KPV is not mean’t to replace the KPI. The KPV is an extension of the KPI itself. The KPI builds structure in a vast science (Einstein used to wonder about two things – the boundary of the universe and secondly, the boundary of Revenue Assurance – of course I am joking). KPV come in useful when the RA team requires a synchronized view of KPI aggregation.

I would love to hear your comments on the concept – have I finally gone bonkers, or do you see value in this as well?

Ashwin Menon
Ashwin Menon
Ashwin Menon is the Head of Product at Subex. He has also been a consultant and he began his foray into revenue assurance as an implementation on-site engineer.