Are Older Carriers Necessarily Better at Revenue Assurance? Reflections on Madrid

A lot of thoughtful and insightful discussion took place during the Madrid training. Thinking about it now, one discussion has stuck in my mind, and it is about revenue assurance management and positioning. One of the attendees asked why traditional, long existing (usually incumbent) carriers were so far behind the rest of the world in revenue assurance. This really surprised me. I had never really considered this before, because the common perception has always been that these older, more traditional telecommunications companies were actually long time leaders in revenue assurance and technology.

Because they have been around for so long, we assume that older companies have already figured everything out, that it is only the newer firms who have to “re-invent the wheel,” and gradually find out what others already know. But after I thought about this for a while, I realized that this assumption might very well be wrong. The real leaders in the field of revenue assurance may not be who we think they are.

Here is the irony in assuming that those telecoms firms who have been around the longest are the ones who know the most about revenue assurance. When you look at who is really stretching the limits and pushing the boundaries of revenue assurance, you will find it is really companies in Africa and the Middle East.

The best way to demonstrate the effect of this is to ask who is suffering the most from the current economic crisis? It is the companies who have over-extended their credit, have inefficiencies in their operations and conservative or limited in their understanding of what cutting edge revenue assurance can contribute.

In contrast, who is weathering this economic climate the best? The companies that are leveraging what revenue assurance can do for them. It is telcos who are running lean operations, supported by revenue assurance staff able to pick up the slack, who are not just riding out the storm but thriving in it.

In many ways this validates GRAPA’s belief in revenue assurance, that it is a key strategic component to the success of any telecommunications company. Older, more traditional carriers tend to lack a centralized revenue assurance decision making chain. So you have to go through committees just to negotiate with different departments about who is responsible for assuring something. You have to be mindful of the internal politics and find out whose territory it is before you even discuss how it is going to be assured.

Leaner and meaner running telcos just hand the job to their revenue assurance staff and it gets taken care of. That is what revenue assurance is all about: maximizing the revenue your company makes by minimizing the risk of revenue loss, but also doing it in a way that is both time- and cost-efficient.

GRAPA’s three key principals are:

• Rationalization: making sure that every revenue assurance activity pays for itself.
• Consensus: ensuring that solutions fit into the operational model, avoiding territorial battles, politics and blame.
• Integrity: Performing all functions while maintaining and reinforcing the integrity of each of the operational units.

That is why GRAPA’s motto for revenue assurance is “The Profit in Keeping What’s Yours.” A company doesn’t actually make money until it successfully retains the revenue it collects, and rationalized revenue assurance ensures that the returns of assurance are always greater than the cost of controls.

Clearly this approach works. And this is why revenue assurance departments are springing up and flourishing all over Africa and the Middle East, while at the same time revenue assurance staff in other parts of the world are left sitting and scratching their heads, not understanding what’s going on.

I credit the Madrid trainees with a phenomenal and counter-intuitive insight with which I can only agree. I think the industry has had it backwards. If you want to see what revenue assurance is all about and what it can do, go to Africa or the Middle East. Look at what the smaller, leanly run telcos are doing—the start-ups and the companies that are forced to be creative in order to get on the map and stay there. They are the companies that are forging trails here. These companies embody what GRAPA is all about.