Myth 1: Revenue Assurance is About CDRs

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.