As many of you know, I am American. And as many of you know, in America, we in general do not really appreciate what the rest of the world knows as football, or what North Americans call soccer. As most who know me personally know, I am not a typical American. For years,I have been an avid follower of “real football “ through my loyalty to a couple of German teams (Dortmund BVB and Bayern Munchen), both cities where I have lived and have family connections.

But I have to tell you, that in this FIFA World Cup series in South Africa, I was more than a little obsessed, and yes, my favorite team was the US team. At the writing of this blog, my team was cheated out of a winning goal by a questionable call made by a referee. Would the US win the World Cup? No, not this time. But, if there is anything this year’s world cup showed us, is that it is a big world out there, and the way things were in the past (like the dominance of Germany , France and the UK), is quickly being dispelled as major, and seriously good teams from Africa, the Middle East, Asia and even the United States, change the vary complexion and nature of the sport.

Say what you will about the “fairness” of individual referees, or the many different “political quirks” that make up world football championships, in the end, the process is a basically fair and entertaining process. It is interesting to compare the overtly civilized and politically correct way that the FIFA championship is run to less professionally managed championship events like the World Wrestling Entertainment matches and Wrestle Mania.

To my chagrin, I have found that WWE wrestling matches are quite popular on cable channels around the world. In Asia, Africa and the Middle East, millions of people watch Wrestle Mania matches and view that as an example of life and sport in the US. For those of you who don’t know it yet, the WWF, unlike FIFA, is a scam. Yes, it is true. The wrestling matches that you view are a fake. They are undoubtedly entertaining, and certainly violent. However, in the final analysis, the role of the referee is not to make it fair, but to serve as another “clown” in the circus in this so-called sporting event.

But what has all of this to do with Revenue Assurance?

Here’s the thing. In my last blog, I discussed a concept I call “Revenue Mania”. And I encourage you to listen to it, or read it before proceeding with this blog. In that article, I proposed that what we are experiencing in our industry today, is a re-definition of the role of revenue assurance and revenue management in the telecom landscape.

What I also proposed was that there were many “schools” or “groups” advocating different “flavors” or approaches to how we, as a group of professionals can best advance our careers, and help our companies through our professional practices. In that article I mentioned several groups. There are people clinging to old definitions of revenue assurance; that revenue assurance is about software, that revenue assurance is about I/T and about zero tolerance advocates. I also mentioned more forward thinking schools of thought, including the “revenue assurance is about increasing profits” and the “revenue assurance is about customers” schools.

In a very real sense, we, as telecoms professionals, dedicated to the practice of at least what used to be known as revenue assurance, are in fact, participating in the equivalent of a Revenue Assurance world cup. The world over, telecom executives (CFO’s and CEO’s) are appraising the value that their revenue assurance software and hardware purchases, consulting budgets and staffing decisions and asking, “was it worth the investment?” While the majority of them have seen the value in many of these investments so far, mostof them are asking, “can we do better”? Can I get more value out of my revenue assurance Team? Should I add more staff to the team? Should I raise salary levels? Should I reorganize revenue assurance and give them different KPI’s? How can I best spread the revenue assurance goodness across my organization for the maximum benefit?

In general, I believe that this year’s exercise of Revenue Mania, is an absolutely awesome, powerful and a good thing, especially for revenue assurance professionals. But I also believe that we need to be very careful that we run our “Revenue Assurance Mania” process much more like the FIFA world cup and not like the American style “Wrestlemania”.

What does that mean? Well, first of all, it means that we should proceed with some method. We need to be sure that we are building on the things that already work, and not throw out the good with the bad. I believe that it means several things:

First – It means that we maintain a focus on the individual revenue assurance professional; their skills, strengths and weaknesses. To fall in love with an approach that existing staff cannot manage is a formula for disaster. That is not to say that we mustn’t try new things, only that we have to build on the core strengths we have, and not make professionals feel ‘left out’ and worthless.

Second – it means that we have to focus on our relationships: consensus. Building trust between professionals; this is how any professional excels. The revenue assurance professional should consider approaches that enhance and strengthen relationships with CEOs, CFOs, CIOs and operational managers, not antagonize them.

Third – the new migration paths must be rationalized. Part of the reason people abandoned the old approaches was because they couldn’t prove the value. New approaches must prove value before undertaken.

Fourth – the revenue assurance professional needs to expand the scope and re-define themselves with Integrity. They must understand the new domain and preform with precision, excellence, transparency and reliability.

Over the next few weeks, I will be initiating GRAPA’s own version of the Revenue Mania World Cup. Week by week, we will attempt to address a different aspect of the emerging trends in the practice of revenue assurance. We will explore the concepts of Revenue Management , Revenue Engineering, Revenue Optimization, Margin Assurance, Market Assurance, Revenue Governance and others. We will consider the merit of each and the underlying principles and values. We will also explore the dangers and pitfalls that each might hold for the revenue assurance professional. And finally, we will attempt to build a new operational model for how these different flavors of telco revenue management, assurance, optimization and governance can be weaved into a comprehensive framework for growth into 2011 and beyond.

The rules of the Revenue Mania World Cup will be simple. I will create a blog, or series of blogs to initiate the first round. We will then post the topic on our Linkedin, Facebook, newsletter, podcasts, GRAPA Website and other locations. We will solicit rebuttal , discussion and contribution from as many members as possible (in order to help stimulate the process, our membership managers and faculty will join in the contest).

As with the FIFA World Cup, we will do our best to keep the contest fair minded, open ended and with a clear dedication to revealing the best approaches.

We will not tolerate cheap shots, personal attacks, emotional diatribes or name calling. Our intention is to run a nice, clean competition. Other than that, I hope we get a lot of people participating in these discussions. The important thing, from my perspective, is that we hear from YOU, the membership, about these issues.

Stay tuned for some of our upcoming Revenue Mania Topics, and until next time, this is Rob Mattison saying …be safe….

I again (happily) found myself providing training for another corporate, multi-national revenue assurance group. The room was full of revenue assurance managers and team members all working for the same corporate group, but traveling from a dozen different countries around the world. It fills me with a sense of respect and admiration where I see the incredible level of sophistication, dedication and enthusiasm that these professionals exhibit.

Sitting in this room, it is clear that Revenue Assurance continues to be an exciting, challenging and ever expanding career path for those of us who have “The Right Stuff”. Just in case you think I am exaggerating about how exciting and critical revenue assurance has become to telco organizations, I have got to tell you that the organizers of this event provided me with a little “bonus” this week. They told me that I would not have to teach for the first hour, because the CEO for the entire corporate group was going to fly in and provide the kick-off for our one week training and certification event.

Some of you may be surprised that the CEO of a large corporate multinational telecommunication group would travel all that way to spend an hour addressing a room full of revenue assurance geeks. But that would mean you have not been paying attention. In the past year, we have had more than than six onsite training events where the CEO, the CFO or both have opted to kick off the event , and impress upon the revenue assurance team how much they were being counted on to help the company make its objectives in the coming year. I’ve actually had it happen where the CFO to stops by for a visit, listens in on what we are discussing, and then decides to stay around for the rest of the event.

But how do you explain this? Why have a bunch of “CDR Jockeys” suddenly come to find themselves at the leading edge of so many telco operations? It’s simple. They need us. These C Level executives are coming to understand that what we have to offer, is what they need. C Level executives are beginning to see that revenue assurance represents one of the single biggest strategic tools in their arsenal.

At one event in Latin America, the CEO of the group spent over two hours, detailing for everyone in the class what the future direction of the company was going to be. He took the participants through painstaking detail, reviewing plans for major technology upgrades (NGN, WIMAX AND LTE), new product and service delivery plans (launching dozens of new products in three short months). Most importantly, he highlighted and impressed upon everyone the critical role that revenue assurance was expected to play in each of these cases.

Talk about “stealing my thunder”. But ,that’s okay. It greatly enhances my credibility when I can tell them, “This is what is important to the CEO”, when the CEO just got through saying the same thing to them a few hours earlier.

In yet a third case, the CEO of the company addressed our class with a surprisingly clear and simple message for the students. He explained that the revenue assurance  team was a critical part of corporate strategy for the next year, and that the biggest things he needed to see, and he expected from his revenue assurance  team were:

Integrity – He spent more than five minutes drilling down on examples of how important the integrity of the people and of operations was going to be in the year ahead, and how critical the revenue assurance  team was to that strategic vision.

Proactivity – He thanked the revenue assurance  managers, and implored them to be more proactive in their zeal for seeking out risks and revenue opportunities.

If I didn’t know any better I would say that he read the GRAPA standards book on his way to the conference. That is the good news. The bad news is that with this high profile attention comes a lot of responsibility. These guys are putting confidence in us, and the want to see results. Of course, we have the knowledge, the tools and the relationships to get the job done.

In the weeks ahead, our GRAPA social networking group is going to be putting together a series of blogs, articles and interviews about GRAPA success stories, to share with everyone the amazing, compelling and interesting successes that GRAPA members are experiencing.

I hope these stories will help to inspire, enlighten and provide direction to many of you.

So, that’s enough for this week, until next time, this is Rob Mattison saying, be safe.

What do Ernst and Young, Protiviti, Infosys, PWC, Deloitte and IBM all have in common? Is it that:

a)      They are some of the largest, most successful consulting organizations in the world today?

b)      Each has a large, viable commitment to providing professional consulting services to telcos in the Internal Audit, Fraud and Revenue Assurance domains?

c)      Each has sent several of their consultants to GRAPA Certification and Training Events?

The answer is, all of the above.

I was a bit surprised last week when I had the faculty team assemble a study to review the GRAPA memberships and training attendance demographics. Several patterns emerged, but one of the most striking was the high number of consulting organizations filling the seats in GRAPA training events.

I was not surprised that consultants are involved in GRAPA. Many of the consulting firms that I mentioned have been staunch supporters of GRAPA from the beginning. Consultants fill many of the key roles on GRAPA committees, and also provide strong support for the GRAPA standards in the real world. However, what surprised me were the numbers of consultants getting certified is growing, exponentially.

Yes, consultants are coming to learn that GRAPA makes sense for them as well. Being a curious and questioning kind of guy, the first thing that I wanted to understand is why? Why have consultants started to flock to the GRAPA training and certification events?

I think there are several reasons for this. First, we have started to hear of more and more carriers placing a requirement, or at least a preference for GRAPA certification as a criterion for the assessment of job candidates. This makes sense when you think about it. With over 3500 copies of the GRAPA standards downloaded around the world, it is natural that carriers would take the next step, and ask that consultants conform to the same standards that they are practice.

Obviously, once a revenue assurance manager, CFO or auditor recognizes the value of the approach, it is simply the next step to prefer vendors who see things the same way. But, while this tendency certainly helps to explain the phenomena, I think there is even more to it than that.

There really is only one reason for any consulting company to do anything–to gain a competitive advantage. Business in general, and consulting more specifically, is an intensely competitive, highly leveraged activity. Consultants are in a constant state of  re-inventing themselves to get an edge on the competition, re-educating themselves, trying to get the advantage through advanced knowledge and skills, re-evaluating themselves and constantly working to improve their team’s and their own approaches any way they can.

Sounds exhausting, right? I worked for many companies as a Revenue Assurance and Business Intelligence practice leader for many years, and I assure you, it is all that and more. Why then, should consultants develop a preference for GRAPA and the GRAPA standards? Well actually, there are quite a few reasons.

Consultants, just like carriers, need to be concerned about whether their teams have the skills and knowledge needed to do the job and the GRAPA Body of Knowledge (an industry wide, consensus based definition of scopes) makes it easy for consulting companies to benchmark and assess their own people. The GRAPA Body of Knowledge provides a key guideline that everyone can use.

Once the Body of Knowledge was established, it was possible to put together a comprehensive Testing and Certification program. The GRAPA Training, Testing and Certification program is the largest, most pervasive and most respected revenue assurance, telecom fraud and telecom internal audit specific program in the world, as evidenced by the hundreds of people that have certified, or are in the process of certification.

But the benefit GRAPA offers consultants does not end there. In addition to the help GRAPA provides in the assessment and credentialization of their staffs, GRAPA’s industry  Practices (Principles, Methodologies and Standard Controls Based Assurance) make it easy for consulting companies to quickly step into complex situations, and conduct insightful and effective analysis and solution design, with a minimum of fuss and “start up time”. The GRAPA standards provide a common frame of reference, vocabulary and approach making it easy for consultants to step deliver value quickly and effectively.

But I think the real reason that consulting companies are finding lots of reasons to love GRAPA, is the GRAPA core philosophy. GRAPA believes and promotes that the most valuable asset  a company can have, and the best way to solve any problem is through the professionalism of the revenue assurance professionals themselves.

It is the revenue assurance professionals themselves that make the difference in any revenue assurance engagement (a philosophy that aligns perfectly with what consulting companies are selling…the professionalism of their consultants). The only real surprise is that so many consulting companies have not taken advantage of GRAPA. But that’s okay. I’m not worried. The momentum that GRAPA has established is clear. They may not be in our classrooms and taken testing yet, but they will be, or they may have to get out of the telecom business altogether.

Well, I think that’s enough for this week. Until next time, this is Rob Mattison saying. … be safe….

Having goals is wonderful. That is how set up measures for ourselves and assess our progress. However, goal setting can create problems, especially when it comes to choosing role models. What happened to those who regarded Toyota as the example of how to run a car company? What about those who chose Tiger Woods as a role model for the professional and ethical behaviors of “winners”?  Yes, the business of setting goals and selecting a role model to follow can have some serious backlash.

It can be especially dangerous and difficult to choose a role model within telecommunications and revenue assurance.  For the majority of the people I talk to in telecoms and the people clogging the speaker conferences and producing marketing material, the message is simple and clear: To be the best, emulate the big boys.

Do you want to exercise best practice in billing? Find out how ATT does it. Do you want an example of the best at long distance? Let British Telecom be your guide. Conference after conference, vendor after vendor and speaker after speaker the same song is repeated. Since the big telcos do it this way, you should do it this way too. Since the biggest and richest telcos in the world do things a certain way, then copy them, and you’ll become bigger and richer.

Wait a minute! Let me really think about this. The claim is that since the big, successful people do things a certain way, I should too. Their way is the way to success. I have a real, big problem with that logic. Here is the reason.

Let’s look at the ‘big telco’ style of revenue assurance.

‘They’ say:

1. Revenue Assurance is about IT Systems – It is about putting in lots of systems and automating controls. The more computer-run controls, the better your revenue assurance.
2. Revenue Assurance is about doing things the right way, even if it is expensive. In this mode of operation, revenue assurance is like an avenging angel. An agent of change who a) cleans up dirty data b) corrects policy errors c) smoothes out operational problems without regard for the cost. The accomplishment of order is the only goal.
3. Revenue Assurance is about leakage – it is about finding, monitoring, and being absolutely focused and obsessed with little tiny errors in great big systems. Perfection is the order of the day.

But how are those telcos are doing?

1. ARPU’s – Dropping like a stone
2. Market Share – Shrinking
3. Reputation – Eroding rapidly

It seems to me that those are the last models I want to emulate. I am amazed that anyone still gives these people the time of day.

We need to look at the history of telecoms in the past ten years. Who are the carriers we should be emulating? Should we take direction from the dinosaurs behind this thinking and pay to build these systems and engage in never-ending, mind-numbing and meaningless debates? Should we perpetuate the thinking generated by carriers that are so cumbersome and bureaucracy bound that they cannot do anything without a six month study? Do you, in your telco, have time for that???

Maybe we should look at the new market powerhouses around the world: The Zains, MTNs, Vodafones, TIGOs, Orascoms, Qtels, Movistars and the Digicels. Even China Mobile and Airtel Bharti have huge lessons to teach us about how this business can be run profitably.

I propose that these are the companies to be emulated.  These are the people who don’t have time to be obsessed with IT systems. These people know they cannot afford to stand still long enough to have the silly, bureaucratic, political battles about leakage and triple redundancy and the obsessive pursuit of three cents worth of leakage. In other words, in my opinion, these are the carriers who practice telecommunications in the style that has always driven the winners in telecoms:

• Innovation.
• Break neck speed to market
• Change, change , change

It is the commitment to innovation, change and risk that makes a telecom something to be admired, not the size of their IT budget and certainly not hours logged in theoretical discussions about “drip models”. I would not claim that the big cumbersome carriers out there who are bogged down with massive legacy systems, 25 layers of I/T, and enough political process to govern a country do not need to practice revenue assurance the way they the do. On the contrary, I emphatically agree. They really do need to function that way. It is the only way that they can keep up.

What I am also saying, is that the last thing any smaller, leaner, meaner and more effective telco, or revenue assurance team should be doing, is trying to figure out how to do the same thing. Basically, you would be trying to learn how to do the wrong thing.

There is an amusing television commercial put out by Accenture. The commercial shows an elephant crossing a huge chasm by nimbly dancing on a log that goes across the gap. Their message is, you too can be a giant elephant, but we can teach you how to be nimble despite your size. Maybe teaching elephants how to walk across logs sounds like a good idea to you, but I think the chances are good that an elephant is going to be falling to the bottom of the chasm pretty often.

Even more critical, why do you want to be an elephant? Yes, the real key for the revenue assurance professional is not to seek out the worst examples of revenue assurance, and then try to copy them, but to look at your own company, your own situation and your own capabilities, and create your own image of best.

Well, that is about enough time for this week, so I’ll just leave you with this thought. If you want to fly, don’t take lessons from an elephant.  If you want to fly, start learning how the birds do things instead.

Until next week, this is Rob Mattison saying…. Be Safe.

I survived the great volcanic ash cloud of 2010. Like many travelers around the world, I too was stranded in a place I did not want to be when Iceland’s Eyjafjallajokull Volcano decided to do its thing.  We had an event scheduled in Rotterdam, and we had to cancel it while people scrambled to get transportation from once place to another.

Luckily for me however, I had a nice hotel room and no place to go for a week. For most people, a whole week stuck in a nice location would mean a chance for some sightseeing, touring or may just some heavy sleeping. But that is not for me. What I like to do when I get some time on my hands, is arrange some ad hoc meetings with revenue assurance professionals in the area where I happen to be staying.

I was fortunate and managed to meet with quite a few people, and in addition to the usual revenue assurance  team meetings, I was able to swing a few interviews with some CEOs and CFOs to get feedback on how their view of revenue assurance is changing. For many of you, the thought of a CEO or a CFO caring about revenue assurance at all might seem like a stretch.

In the places where revenue assurance teams are taking the GRAPA message to the streets, an amazing transformation occurs. Don’t get me wrong, the transformation does not happen overnight, but in those places where the revenue assurance team works hard, works smart and focuses on their core mission, amazing things happens.

Revenue assurance professionals begin to see a significant and often quite rapid change in their status. As revenue assurance professionals begin to focus more on their understanding of where the true risks to the telco’s revenues are, and get proactive in their mission to “seek out and destroy” risks to revenues in any form it happens to be in, the more revenue assurance professionals come to be perceived as a key strategic asset to top management.

In meeting after meeting, C level executives shared the various ways their revenue assurance teams are surprising them with innovative, creative and downright brilliant solutions to many of the biggest revenue protection challenges facing telcos today. If I were to summarize these stories, I would say that CEOs love GRAPA, or at minimum truly appreciate what GRAPA is doing, because of the way in which it has been helping to transform revenue assurance teams.

Among the most often cited cases that C Level executives are mentioning are:

1. The clear commitment to rationalization and the insistence of the revenue assurance team that all remedies developed are cost justified. That, keeps showing up as number one wherever we go. For many people unfamiliar with the GRAPA standards, there is a prevailing assumption that revenue assurance is some kind of “data cleansing” or “operational best practices” discipline (which is something that no C Level executive has time for). But when the revenue assurance team adopts a hard core, rationalization stance, things really begin to change.

1. CEOs and CFOs were emphatic about how much they appreciate having a team of professionals on staff that proactively looks for risks to revenues without being told to. It seems that C Level executives, like everyone else, have too many things to keep track of, and anyone who is vigilant and proactive in “keeping their eye on the revenue line” is going to attain a “favored” status very quickly.

Most surprising to me were the number of executives who told me that their number one reason for escalating the status of the revenue assurance team in their estimation, was because they were realizing that revenue assurance was their number one best line of defense against revenue loss in new product development areas. An amazing number of telcos now include revenue assurance as a critical member of the new product development team, where they are perceived as the ultimate arbiters of the speed vs. risk tradeoff that all new product development teams must deal with.

For some people getting stuck someplace for a week because of a volcano might seem like a real bother. But for me it was an amazing opportunity to get some necessary and incredibly powerful feedback regarding the job that the revenue assurance teams are doing out there.

The net result of these interviews for me, among other things, is a renewed commitment, and even more focus on the “non-traditional” revenue assurance disciplines (Margin, Market, New Product and New Technology Assurance) that the CEOs seem most focused upon.

Well, that is enough for this week. Who knows, maybe next week, I’ll get stuck someplace else, and have another chance to get more of the “C-Level” view of what is happening in telecoms, and revenue assurance today.

But until then, this is Rob Mattison, saying…be safe.

When Lightening Strikes – Botswana and Revenue Assurance

R Mattison’s Podcast

I recently spent an amazing week with a class of revenue assurance, internal auditor, fraud and telco operations professionals in Botswana. During the training two issues kept coming up: “How exactly do I set up a governance model for revenue assurance,” and “What model should be used for measuring how effective the revenue assurance team really is?”  These are interesting questions and certainly frequently asked at trainings.

If you are a follower of our blogs and of our new Corey’s Corner webinars, we are beginning to uncover some of the really critical areas where revenue assurance is asked to help when disasters strike. When the people in the class in Botswana started asking about the different controls and revenue assurance scenarios, it brought to mind a story reported to GRAPA recently.

It seems that a Latin American wire line carrier had one of its switches struck by lightening. Of course, the network engineers had to make some quick decisions about what to do. It happened that this carrier had been in the middle of a migration from the Class 4 and Class 5 switch environment, to an NGN (Next Generation Network) architecture, where the switching was managed via VOIP instead.

Since the old switch was already destroyed, the network engineers decided to cut over to the new NGN environment. Unfortunately, for the engineers, the carrier and their customers, the revenue assurance group had not been called in order to assist with “New Technology Assurance”. When the cut over happened no one checked to see if the new architecture was set up properly for accounting revenues. The result was that for over one month, customers were double billed for every call they made.

Since this group had not instituted their standard revenue assurance based “Ratio Controls” in billing, and did not institute “Change Management Controls” in the network, the customers of this telco got a little surprise in the mail: a bill twice as big as it should have been. The carrier was of course embarrassed, and they made refunds and corrected the problems, but what an incredible waste of time and money, in addition to the irrevocable damage to reputation.

The questions that the managers in that Latin American telco may have asked themselves after this happened was, “Should I have put the revenue assurance controls in place when I had the chance?” and “Would those controls have prevented this revenue disaster?”

The clear answer, in this case, was yes. The investment in those few critical controls would have more than compensated for the damage to regulatory standing, public relations and actual revenues that the “lightening strike” created.

It is easy to look back and to say “We should have done it this way.” It is another thing to develop the skill, judgment and capability to make such decisions ahead of time. This is where the beauty and efficiency of the GRAPA approach to risk and controls management comes in. Under the GRAPA approach, we do not try to tell managers or revenue assurance professionals how much risk they should be willing to take. That, according to the GRAPA standards, falls under the “Appetite for Risk” principle.

The GRAPA standards are not prescriptive. We do not provide members with a mindless checklist that allows them to say: “Well, I did what the standards told me to do, so if anything bad happens it is not my fault”. What the GRAPA standards provide is a principle based approach.
Specifically, what we identify for each area of a telco operation is:

1. A method for the diagnosis and assessment for risk in that area (forensics).
2. A set of standard controls, which is a list and explanations of the key points where the majority of telcos have been implementing controls in order to contain risks in the identified areas.
3. A method for the calibration of those controls (a range of control levels from the extremely low cost to the extremely exhaustive).

What we then count on, is the revenue assurance professional, in partnership with the management team, to work together to build the best risk management profile for their situation. In the “lightening strike” scenario, there are clearly over a dozen GRAPA standard controls that would have identified and ameliorated the risk long before the disaster that our Latin American carrier faced. What we provide is a set of “standard control points”, control points that need to be understood and applied in the most cost effective way possible by professionals. .

These standard control points define for the executive and the revenue assurance professional a comprehensive roadmap of both the minimum points of coverage required to consider an area assured. It is up to the revenue assurance team to “scale up” those controls to the level of risk containment. The net result, for our friends who trained in Botswana, and for telco management teams around the world, is a new insight and a much better understanding of the ways they can work to combat the ever increasing risks to revenue loss being faced, in the most cost effective way possible.

That is enough for this week. Remember, the next time you see a flash of lightening, or find yourself facing a revenue crisis, maybe you need to ask yourself a simple question, “Could this crisis have been averted, or minimized if I had simply implemented some basic controls in this area”. You may find, like most telcos that the cost and trouble of implementing a controls strategy will pay for itself many times over.
Until next time, this is Rob Mattison, once again saying…. be safe.

(Keep on the look out for our upcoming articles about Revenue Assurance In Haiti, and the role of revenue assurance in the earthquake zone, as well as some really interesting articles about revenue assurance in the battle zone, and learn about the unique revenue assurance challenges in Afghanistan where one of your biggest revenue assurance issues is dealing with the fact that people keep blowing up your towers and switches. )

In a previous article, I discussed the issue of revenue assurance and our involvement in the assurance of sales channels. As we considered in that article, it was clear that even though sales channels might be considered off the beaten path for the typical revenue assurance team, more and more telcos are realizing that:

a)     Breakdowns in sales channels can have an enormous negative effect on revenues.

b)    Revenue assurance teams are exceptionally good at addressing those risks.

As we said in that article, the decision to include Sales Channels within the charter of a revenue assurance group is not a spurious one, but when it is made, it is critical the revenue assurance team be prepared to do a good job.

The Role of Sales Commissions in Revenue Recognition

A naïve observer might propose that sales commissions and the payment of sales reps and channels for their activities are far removed from what we know as revenue assurance. Indeed, in the classical sense, the payment of commissions is simply a “cost of doing business” with no direct correlation with the delivery of the service.

That may have been true in the “old days”, but in today’s tight margin, highly competitive environment, sales commissions and channel incentives have become a major component in the overall strategy of how telecoms are run. If paying a channel an additional 5% for their efforts will yield an additional 30% in sales it makes good sense to do it. Unfortunately, as seductive as that simplistic logic is, it does not take into account the many perversions of logic that can creep into the organization.

As organizations get more creative in their compensations schemes, and as sales channels learn how to best “manipulate” the system, major revenue leakages can be generated. For example: assume we decide to offer a program that allows for sales channels to be paid $10 for every new sim card they sell. The marketing people do some quick math and say that since an average customer generates $100 (at $.10 per minute) in a year, then paying $10 bonus will be a good business activity. (We simply lower our margin by 10%).

• 1 customer = 1,000 minutes in a year. At $0.10 per minute that should result in a revenue of $100

• I give a commission of $10 for the sale.

• I now get 1,000 minutes in a year, but receive only $90 – meaning that I have reduced my revenue by $0.01 per minute.

Revenue went down a bit, but it is still good business and not a revenue assurance issue. What happens when I make this deal, but the customers that are attracted do not generate 1000 minutes? What happens when I offer this deal and the sales reps bring in customers who end up using only 100 minutes? (How can this happen? Easily–customers churn all the time based on aggressive sales promotions). I now have a customer who generates 100 minutes of traffic – which brings $10 of revenue. But, I paid the sales rep $10 for the commission. So now, is there even any revenue? No.

And taken to the extreme, you have cases where sales reps learn how to “fake” the activations to get the commissions resulting in a negative margin. In other words, you lose money on every sale. In this situation, the solution is a correction. Change the policy so that reps are not paid for the sale of a Sim, but for actual minutes delivered and paid for. While perhaps a bit extreme, our example demonstrates the problem a revenue assurance manager must face when asked to assure the sales commission area.

There are actually two things that revenue assurance needs to be concerned about:

1. The commission programs themselves.
2. The commission program accounting and crediting procedures.

Commission Program Assurance

Accounting for and assuring the composition of commission programs fits squarely under the domain of Marketing and Margin Assurance. (Readers are referred to the GRAPA standards, body of knowledge and certification training modules for details about these domains.) The foundational groundwork in the performance of market and margin assurance is for the revenue assurance professional to perform a complete “risk assessment” of every single program based upon the 6 major risk dimensions. These include:

• Subsidy Risk
• Network Risk
• Market Risk
• Sales Risk
• Billing and Assurance Risk
• Partner Risks

Once each of these risks is considered, a Revenue Model for the marketing initiative is prepared. This Revenue Model explains each of the assumptions that make up the marketing proposal, requires the marketer to provide forecasts along each of these dimensions, and defines the “controls” that need to be in place so the marketing manager can be warned when their forecasted levels are not being met.

It is the development of these models, and the initiation of these controls that define the revenue assurance professional’s job. Tracking the programs and responding to errors is the job of the marketing manager responsible for the program.

So how does this relate to Sales Commissions?

Simply stated, one of the principle “sales risks” to be considered is, “What happens if the sales that occur do not meet the conditions specified by the model”. In other words, if my marketing plan expects that each sale is going to be worth $100 in revenue, and that is how I justify the commission, then I need to be sure that I create some controls that make sure that this assumption ($100 in revenue) is the result.

The definition of the control involves:

a)      Measuring and tracking to make sure the assumption is actually happening.

b)      The definition of an alarm and thresholds that will notify the program manager when the assumptions have gone seriously wrong (when the failure of the assumption threatens the revenue in a significant way).

c)      Defining “remedies” and “adjustments” to be made when an alarm is triggered.

Sales Commission Plan Assurance: Summary

The first sub-domain under Sales and Commission Assurance is the Assurance of the Plan itself.
The purpose of the assurance activity is to provide management with clear information about:

1. The risk to revenue that the commission plan represents.
2. The establishment of objective measures that track the assumptions.
3. The creation of alarms and triggers to make everyone is aware when revenues are seriously jeopardized.

Commission Accounting Assurance

The other major area of assurance for commissions is concerned with the accuracy of the commission (and sales tracking) and the accounting process itself. The best sales and commission program will be worthless if it does not accurately track the sales and services delivered, and provide for the accurate and timely assignment of compensation.

While the vast majority of issues concerning Sales and Commission accounting are a straightforward accounting function, revenue assurance will become involved when management has decided to use the sales and accounting system as the method for managing the sales and commission tracking controls. If sales and commissions accounting is not going to house and manage revenue assurance market and margin controls and alarms, then there is no reason for revenue assurance to be involved.

If, however, this system is going to be the way management automates these controls, then revenue assurance participation becomes critical. The ability of the sales and commission system or process to track the items and variables defined in the commission plan (the things being tracked in the forecast, triggers and alarms) is clearly going to define how well the revenue assurance controls will work in this environment. It will therefore, be up to the revenue assurance professional to get involved to the point where he is sure that they are in place.

Providing this assurance will be completely dependent on how the overall market/margin assurance process is managed. What the revenue assurance professional will need to do is:

1. Assure that those things identified within the Sales Risk component of the marketing model are being accurately fed into the commission/compensation system.
2. Assure that the method of computation for the compensation defined in the model is the method being utilized within the compensation / commission system.

If the revenue assurance practitioner has done these things, they will have met their responsibilities.

Summary:

Sales commissions are becoming a critical ingredient in the diverse “innovative new marketing schemes” being created by marketers and product developers. Assuring that these “crazy schemes” are viable, that they contribute positively to revenues, and that they are being accurately executed can make the difference between success and failure, profit and loss and negative vs. positive revenue margins.

As the industry increasingly puts its faith in these innovative strategic approaches, the ability of the revenue assurance team to get involved, and apply a strenuous revenue focus on these programs will be key.

That’s about enough for this installment, so until next time; this is Rob Mattison saying take it easy and…. Be SAFE.

One of the most exciting and challenging things about the revenue assurance world as we evolve as professionals, is how the scope of our responsibilities continues to expand. Few revenue assurance professionals do not understand the process of tracking and assuring the integrity of a CDR. But many of us are finding that following CDRs is a small part of the job.

Case in point is assuring sales channels. Not long ago people would tell you revenue assurance had no business poking around in the sales channel area. Indeed, Sales Managers did not want anyone else looking “under the covers” of their operations, and for many organizations accounting and internal audit was assumed to be “in control” of those areas.

Unfortunately, what happened to a lot of telcos was…well, what always happens. New sales channels sprang up overnight. Instead of managing one internal sales force, the telco now must manage dozens of teams along with partners, brokers, agents, pseudo-employees and mega channel partnerships. Creative, cost effective and incredibly complicated sales tracking and compensation plans were suddenly created.

In the wake of all of this change came leakage and fraud. In no time, telcos inadvertently invented dozens of ways to lose revenue, use sales tracking to give false information, give sales credit where it wasn’t earned and most critically, to fail to accurately and honestly report revenues.

When this happened, it wasn’t long before the CFOs came to realize the skills and capabilities of the revenue assurance team were the best available to address these issues. And so the “morphing” of the definition of revenue assurance began.

Early RA Efforts in Sales Channel Assurance

The first documented cases of allocating the responsibility for “leakage” in sales channels can be found in the South East Asian carriers. In these markets, the rapid expansion of the role of sales channels to fuel prepaid became the impetus for change. Over the past decade, the trend has grown to where the majority of telcos now include “sales channel assurance” as at least a part of the scope of the revenue assurance team.

Given that sales channel assurance has worked its way into the charter of many revenue assurance groups, what are the details behind it? Luckily, the GRAPA standards spell out the principles and approaches key to sales channel assurance and the GRAPA certification training classes review the standard controls and assurance points in detail. For those who have not had the chance to review those standards, or take the training, we will provide an overview here.

Assurance of Sales Channels – Domain Fit

The first issue for the revenue assurance professional faced with the job of sales channel assurance is to identify which domain it falls under. This is critical, because only by mapping a situation to our standards and body of knowledge can the revenue assurance professional gain any leverage or support for the areas they cover.

When you determine which domains a problem touches, you gain access to the standard controls, approaches, benchmarks and knowledge other revenue assurance professionals have gathered over time. Under the GRAPA standards, sales channel assurance can be positioned in several ways.

First – Channel Assurance is one of the four major domains required to assure the prepaid line of business. It is impossible to assure prepaid billing systems and the entire Prepaid LOB without assuring the company that the sales channels are tight, leak proof and feeding the voucher management system with integrity.

Second – Sales channel assurance fits under the subject of CRM assurance and assuring the different CRM value chains:

a) Sales

b) Customer Service

c) Marketing

Either way, sales channel assurance is critical, and definitely “in scope” according to the standards. When is the assurance of channels part of the charter of the revenue assurance group?  As for all revenue assurance domains, the domain comes “in scope” when:

a)      Management identifies it as a domain of concern.

b)      The operational team invites the revenue assurance team to help.

c)      The losses or risk of loss become pronounced.

When the domain is added to the revenue assurance group’s charter the revenue assurance manager must:

a)      Perform an initial forensic analysis of the domain to rationalize and quantify the extent and nature of the revenue risk and loss.

b)      Prepare a set of recommendations and relate them to specific quantified risk areas.

c)      Review the recommendations with top management and the operational teams concerned.

d)      Implement actions based on management decisions.

Channel Assurance – Objectives

What are we supposed to accomplish when we assure this area? After all, there are no CDRs in a sales channel. What leakage are we trying to address? Experience has shown that when a CFO wants the revenue assurance team to “assure” a sales area, they have some specific problems in mind.

The nature of revenue leakage and revenue loss protection when sales channels are involved has taken a couple of major forms:

1. Inventory and “virtual inventory” related losses – When top-ups and sim cards are not adequately accounted for (revenue producing assets are mismanaged, resulting in the false accounting of revenues, or the “giving away” of services) There are three operational sub-domains to consider in these cases:
   1. Outbound Asset Management Failure – Faults in the process of accounting for the creation and delivery of revenue generating assets (virtual and physical) to the point of sale.
   2. Boundary/Exchange Failure – Fraud or error in execution of exchanges of value with sales persons – when sales channels (internal and external) accept responsibility for revenue producing assets, and they are not accounted for properly.
   3. Inbound – Accounting Failure – Failure to get funds collected properly allocated to the Account Management System and the bank account.
2. Post sales accounting – Inaccurate sales reporting/commission pay out – When the payment of commissions or the allocation of sales credit becomes part of the overall profitability of a service area, then the accuracy of the sales tracking and commission payment domains fall under the charter of revenue assurance as well.

How is this Revenue Assurance?

So now we get to the heart of the controversy for some carriers and CFO’s. How can we justify the inclusion of the assurance of these areas as part of the mission of revenue assurance? After all, these are not direct revenue issues are they? At this point, we are forced to go back to some basic definition of revenue. Under the “Old School” Revenue Assurance definitions the term revenue is used to refer to the monies received for the delivery of a service. Revenue is the money we receive from the customer.

In the good old days of telecoms, when all revenues were postpaid, we provided a service to the customer, we collected CDRs that we used to make a bill, and the customer paid us. In this revenue management chain scenario, revenue assurance was ensuring the CDRs are collected, processed, billed and monies collected from the customer.

The Prepaid “Spin” On The Definition Of Revenue

In the modern telecommunications world, revenue is not that simple to understand. In a large number of carriers, the primary form of business is not postpaid but prepaid. In the prepaid world, monies are collected far in advance of service delivery.

I get client money and they receive a “token in exchange” (i.e.: a top-up card), that is used to top up their online account. When they use the service, an amount is deducted from the account management system. In the prepaid world, in the “purist” sense, revenue assurance is a very trivial process, making sure the account management system decrements the balance correctly. There is no long revenue stream or CDRs, just a brief, instantaneous online transaction. That should mean the revenue assurance job is small and specific. However, it is not that simple.

In the postpaid world, losing money because you didn’t collect from the customer reduces your company’s revenues. Errors in collections come “out” of the revenues counted. Because of that, most people consider the job of revenue assurance to be the assurance of the real revenues, not the legalistic definition of revenue under accounting principles. Whether I am worrying about the “watering down” of my full revenue realized from a failure to collect from a postpaid customer, or a breakdown in the collection of prepaid monies, it amounts to the same thing.

The question is not whether this is a problem, nor is the question whether this has a negative impact on revenues. The question is whether the CFO should include that within the scope of revenue assurance, and is a decision they need to make based upon need, skills and the depth and breadth of the problem.

Once that decision is made, it means revenue assurance must concern itself with the integrity of the process of getting the money from the customer and getting it into the Account Management Systems intact as well as making sure  the “moment of truth” that occurs at the point of revenue recognition is accurate.

And so the “channel assurance” domain of Prepaid Assurance is born.

Objectives of Channel Assurance

The mission of revenue assurance when it comes to channels is fundamentally no different than it is anywhere else. The GRAPA standards specify the particulars. Our job is to:

a)      Identify any and all “risks to the loss of revenues” that the domain represents to the company.

b)      Quantify that risk, both in terms of the amount of money at risk and the probability of that loss occurring

c)      Recommend remedies to management (recommend changes to procedures, or the implementation of controls)

d)      Implement the recommendations that management chooses based upon their appetite for risk.

That’s enough I think for this installment. We will continue to explore these issues by taking a closer look at a couple of the sub-domains under channel assurance, namely, Prepaid Time Assurance and Sales and Commissions Assurance.

Until then, this is Rob Mattison saying… be safe.

This week we had a break in our training schedule, so Brigitte and I spent a week in Germany visiting family. I love Germany. That should be obvious, since I married a German. Brigitte was born and raised in Augsburg in the Southern part of Germany known as Bavaria.

With its beautiful countryside, rolling landscape, forests and farms Germany is a pretty place and always a treat for me to visit. We called on my in-laws, helped my niece Anna with her English lessons and trigonometry homework, and visited the famous Augsburg Christmas market.

However, whenever I visit Germany, I always take the time to engage in my favorite pastime. What I love to do more than anything else is a little game I like to call Autobahn Hanne (Chicken in German). The way you play is simple; you get a rental car, get on the Autobahn (the German highway system) and see how many times you can get your car going over 200 KPH before Brigitte screams in terror.

That is right! In my opinion, the most brilliant thing the Germans ever invented is the Autobahn, the highway system with no legal speed limit. Yup, in Germany, you can drive as fast as you want, and nobody tries to stop you. Moreover, unbelievably the Germans  have a lower accident rate than many, many other countries in the world, with much more stringent speed and traffic laws.

Now, I know what you are thinking. How did the Germans make this miracle happen, and how can I get in on it? Is it because the Germans are genetically better drivers? Do they have better coordination or cars ? Firstly, the Germans are impatient people. They don’t like to wait, and have no tolerance for people who get in their way and slow them down. Trying standing in a queue at the airport with Germans in line and you will see what I am talking about.

The way that they make the autobahn safe is simple. They have figured out the best places to put the roads. They have organized their laws, rules, highways, on ramps, off-ramps and everything else in ways that make the autobahn not only possible, but also safer than roads without that kind of comprehensive engineering.

However, remember, the Autobahn is much more than just a road and some asphalt. It works because of all the different parts of the process work together. It requires the coordination of disciplines: driving, engineering, law and more than anything else, an attitude adjustment.

On the Autobahn, they have laws and rules–lots of them. In fact, they have rules and laws that you do not have in other countries. For example, when you are on the Autobahn, you must always get out of the way if someone behind you is going faster than you. For the Autobahn to work, people have to learn how to get out of the way. Also, on the Autobahn, you can only pass on the left, never on the right. You see, it is not magical at all. The Germans have a structure and rules that allow them to accomplish their speed without compromising on safety. However, who within the telco environment is qualified to figure out how our product and marketing Autobahn should look?

What are some of the things that get in the way of new product developers and slow them down? Network engineers telling them that the product cannot be supported by the existing infrastructure. Billing systems people telling them that the products can’t be billed the way they want it to be billed. Actually, just about everyone involved in the delivery of services.

This new product development Autobahn requires someone who is expert not at any one aspect of the delivery of services, but who understands how all of it fits together, and how it can be “tweaked” in order to get to where you are going with the least obstructions possible.

Let’s see now. Where can we find someone like that? A person who understands the intricacies of network elements, switches and CDRs, billing and customer service. For many, many telcos, the new “hero of the hour” has been, repeatedly, the Revenue Assurance professional. What? Revenue assurance perceived not as “the guys who slow things down”, but instead as “the guys who speed things up?”

Actually, yes I have personally heard dozens of stories of situations where frustrated CFOs, product developers and market executives have turned to the revenue assurance team to help figure out how to “get around’ design and operational problems and help make things work better, faster and safer.

If you to ask me to identify the one thing that presents the biggest opportunity for revenue assurance professionals, and for telecoms overall, it is the identification and inclusion of revenue assurance as a critical component of every product development team. For those telcos who have figured it out, revenue assurance represents the “backbone” of the new product development operation, with new product development support making up to one half of the entire RA team.

So, the next time you listen to a marketing person, CEO or a product developer talk about creating some insane project and launching it much faster than anyone thinks is possible, take a step back and think about the Autobahn for a minute. Is there a way that your expertise, insight and unique set of skills and knowledge can help them get to their destination?

If so, maybe you are ready to join the ranks of more and more revenue assurance professionals who are finding this to be one of the most interested, exciting and challenging aspects of their jobs. And after that, how long before you to start to develop a taste for Autobahn Hanne (Autobahn Chicken). Why not see how fast you can go before you make your CFO scream in terror? It is an interesting thought isn’t it?

Well, enough for now, until next time this is Rob Mattison saying “Be Safe”.

I once again found myself conducting GRAPA training in the pretty little country of Luxembourg. In my world, ending up in the same city twice in the same year is a real bonus. I did not even have to buy a new SIM, I still had top-up on my “Tango” SIM from the last trip. I think Luxembourg with its castles, cobblestone roads and grand homes in the French royalty tradition, more than many European countries, brings to mind the “olden days”. Yes, Luxembourg clearly speaks to the grandeur of old. It would be easy to imagine fine women in billowing gowns, and aristocratic men in powdered wigs walking the streets.

However, I was not here for sightseeing. This time, we had an entire training center full of experienced revenue assurance managers. I really enjoy teaching the Core Curriculum classes. However, when I get a chance to spend a week with a group of experienced revenue assurance managers I really get excited. Just imagine a room full of men of women whose accumulated experience in telecom revenue assurance is over one hundred years. Over a century of expertise was in one room–amazing.

Of course, whenever you get a group of seasoned revenue assurance managers together, you are going to have some differences of opinion. After all, being cantankerous and assertive is clearly how we have all been able to survive this long in our high-pressure jobs. However, several things about this group stood out. When we teach our manager class, we still spend time on technical issues and techniques for revenue assurance, but we spend the major portion of the class discussing those things most critical to managers, namely:

1. Politics
2. Staffing and Team Management
3. KPI’s
4. Politics
5. Working with network, billing and customer service
6. And Politics

It is interesting to sit down and take a good look at where we have come from, and where we are going, in each of our respective groups. The average size of staff for this class was six, with some dealing with startup scenarios and others dealing with departments that have been in existence for many years. This group, like most other groups of managers we have seen had a couple of characteristics in common and that always upset me, to a certain extent. If I were to write a list of some major shortcomings in the typical revenue assurance manager, the list would look like this.

1. Pro bono work

2. Terminal Uniqueness

3. Dirty Laundry

4. The Search for Revenue Assurance Royalty

Pro Bono Work

In the legal profession, there is a special kind of casework lawyers are expected to take on known as Pro Bono work. Pro Bono work is work done by lawyers for free for people who need it, even though they cannot pay. Lawyers are expected to do this kind of work in order to “give back” to the community and to keep their skills sharp.

In the revenue assurance profession, we all have our own versions of pro bono work–like when the CFO asks you to do this or that analysis. Or when the internal auditors ask for your help on a special report or an operational manager asks you to analyze revenue reports because they know that when you look at them, they will be correct.

Do not get me wrong, I do not think there is anything wrong with revenue assurance teams doing Pro Bono work. In fact, I think it is very important they do this. It is critical to our effectiveness and the management of our relationships and marketing.

The problem I see is revenue assurance managers think they have to apologize for doing this work. They assume this kind of work is not in scope, because it does not involve counting CDR’s or building elaborate and often foolish controls over a process that works just fine without.

No, in my opinion, the problem is revenue assurance managers need to stop apologizing for doing this kind of work, and start looking for it, and including it in their scope. The problem goes back to understanding exactly what we are supposed to be doing. If our job is to count CDR’s and spend too much money on ineffective systems and solutions, then yes, this is out of scope. However, if our job is to help management and operational managers to understand their revenue risks and to maximize revenues effectively, then the more pro bono work they do, the better.

Terminal Uniqueness