Recently, the 500th student went through GRAPA Revenue Assurance Academy core training and this milestone inspired some reflection. Certain myths about the function of revenue assurance continue to prevail. I would like to open up the dialog in an effort to demystify  the twelve most common myths of revenue assurance.

Myth 1:

Search ‘revenue assurance’ on the internet and you will find many websites, including major standards organizations and conferences, still defining the role of revenue assurance as the management, counting and accuracy of CDRs. It is frustrating for those involved in revenue assurance to constantly deal with the myth that the revenue assurance job is the task of CDR rustlers. CDRs were the only way to count revenues in the bygone days of the incumbent, wire line, post paid companies. It worked because telcos only had one product and service, and billing was the process of counting CDRs and creating bills.

But, having arrived in 2009, we see the biggest sector is no longer post paid voice, but prepaid. In a prepaid billing situation, there are no CDRs. A prepaid billing system works directly with the switch, allowing you to place a balance up front and subtract from that balance. CDRs have nothing to do with the billing process. So how can the statement ‘revenue assurance is about CDR counting’ be true when the majority of the carriers make 95% of their money from prepaid? Is revenue assurance only about post paid, but not prepaid business? The big revenue is in prepaid and that is the revenue that needs protection. Over the last five years, billions of dollars in revenue have been lost because of the inadequate assurance of prepaid billing systems.

While revenue assurance groups continually boast about their phenomenal CDR tracking systems and the intricate reports that they can generate, companies lose millions of dollars to fraudulent, defective, incomplete or confused assurance practices in channels, roaming revenues, and interconnect. CDR management continues to play a role in revenue assurance albeit a rapidly diminishing one. The majority of telcos have only started to understand that the real risks to revenue come in areas other than CDRs.

Even more critical is that good CDR counting does not prevent revenue loss. Prevention of loss comes through proactive revenue assurance with the use of change management, synchronization and other control techniques. We are seeing the scope of revenue assurance expand dramatically with additional challenges in the areas of sales channel assurance data, GPRS, SMS, credit fraud, risk assurance and new product development. However, as long as the myth of CDR counting prevails, companies will leave themselves open to unnecessary risks in these areas and will continue to waste resources on reactive rather than proactive assurance measures.

The CDR myth conflicts with the GRAPA standards and principles, the most important being rationalization: ensuring the time and money you spend on assuring an area is equivalent to the amount of revenue risk it represents. According to GRAPA standards, the mission of revenue assurance is to attain the maximum containment of risk to the company’s revenues, at the lowest possible cost. Spending your entire revenue assurance budget on CDR counting will not accomplish that objective.

Recently, the 500th student went through GRAPA Revenue Assurance Academy core training. Reaching this momentous milestone inspires some reflection.

In meeting revenue assurance professionals from China, South East Asia, Australia, India, Pakistan, Bangladesh, Egypt, Saudi Arabia, Africa, Argentina, Mexico, Colombia and Chicago a few things have become apparent:

• The practice of revenue assurance is moving in a consistent direction no matter where you go, being helped to no small degree by the GRAPA standards and other consensus building activities
• Revenue assurance professionals are alike wherever they practice. They are highly intelligent, risk takers, good negotiators, take pride in their work and work tirelessly and diligently.

However, regarding the actual function of revenue assurance, certain myths that the industry has come to accept continue to prevail. These myths are often based on falsehoods created by vendors, special interest groups, or antiquated ideas that no longer apply as we face new technology and services. In our training classes, we spend much of our time teaching people that these standard myths are not de facto, and that they may actually inhibit the revenue assurance manager from performing their role and getting the success and recognition they deserve.

I often hear these myths quoted and I have decided to do something about it. On the event of surpassing 500 students, I would like to explore and dispel these “myths” and open up the dialog in an effort to demystify the twelve most common myths of revenue assurance.

It has become the nature of telecommunications where accelerated development and deployment of a constant stream of new products and technologies has become de rigueur. And more often than not, it is the revenue assurance (RA) professionals who end up dealing with the hard and unglamorous work of actually monetizing these offerings and ensuring revenue maximization. This is already happening with GPRS, 3G, WiMAX, content delivery, and any number of other new business models that have sprung up just in the past few years. As if that wasn’t enough, African and Middle Eastern carriers are now attaching billing functions to the radio side of the network.

Not long ago, if someone suggested it was part of a revenue assurance department’s responsibility to assure what happens in the GSM radio network, or to assure BTSs and BSCs, I would have said they were crazy. However, in the relentless pursuit to optimize the network and maximize revenues, carriers across Africa are starting to dramatically change their billing models.

So, far from being followers, or part of a me-too approach to telecoms, trying to catch up with the northern hemisphere and the western world, Africa turns out to be on the cutting edge of both telecoms and revenue assurance practice. This should not surprise anyone, when you consider that unique regional problems and issues lead to ever more specific and focused solutions. However, regardless of where an innovative solution comes from, they always contain lessons for professionals throughout the industry.

One of the biggest changes in billing has started to spread across Africa, where in certain areas carriers have started to experiment based on how busy the BTS is. For those not familiar with GSM architecture, BTS stands for the base transceiver station, the unit that controls the antennae and manages the traffic between the handset and the switch. When BTS utilization becomes low, the carrier sends an SMS to customers, announcing the opportunity to make discounted calls during the lull. This is the equivalent of using peak and off-peak rates to ensure increased and optimal utilization rates for otherwise underutilized equipment, but targeted down to a minute level.

This practice is working well to drive customers to make calls when the BTS is not at its peak, and has a short-term positive effect on the market. However, as with most changes, there are unintended consequences, since it also creates many issues for revenue assurance to address. How can the billing on these calls be assured? Now revenue assurance has to be aware of radio network traffic and how busy the BTSs are in order to know if the right rate is being applied at the right time. Suddenly we have a new universe of technology we have to learn, as well as data we have to interpret and subsequently apply to the revenue stream and assurance process.

At the same time, this type of pricing will inevitably change customer’s attitudes and behaviour. Now customers who would have made a call at a more expensive time will wait until the less expensive time, perhaps with a net loss to the telco. When we consider assuring these activities and the concepts of revenue maximization, the question becomes—are we making money by doing this or are we ultimately decreasing revenue? Is it bringing us customer loyalty to an extent we had not anticipated before? How do we measure this and how does it ultimately affect our bottom line? What happens when our competitors follow suit?

These are the incredibly complicated issues that increasingly drag revenue assurance professionals into more complicated and multidimensional situations. It will be interesting for us to track this phenomenon, and others like it, as it moves forward. For some of you this will be crucial, since you are on the front lines and need to make these systems work, but even for others who do not face this immediate problem, you have to realize it will eventually affect you in one way or another because the discipline of revenue assurance does not keep still for anybody. We know when one carrier in a market starts to do something like this, the others have no choice but to compete. And with the breakneck pace of change in our business we can be sure we will be seeing more of these radically different and incredibly complex scenarios fall into the domain of the revenue assurance manager.

I am hoping that those reading this article will send us information about their experiences with radio side revenue assurance. Let us know what you are doing and what you are finding. The GRAPA steering committee is working on plans to initiate our first round of GRAPA User Groups. GRAPA User Groups will be regional conferences for revenue assurance pros to meet and work on the development of standards as well as approaches for dealing with unique problems such as this. We look forward to your participation in GUG planning sessions and we hope you will get back to us with your experiences with radio side revenue assurance.