Revenue Assurance Reboot – Converting KPIs to Clarity

Revenue Assurance Reboot – Convert KPIs to Clarity

R Mattison’s Podcast

Have you noticed there are some people who are good with computers, and other people who are not? At least for me, it is funny to watch somebody who does not get it when it comes to computer use get angry and frustrated when the computer doesn’t do what they think it should.

My mother is a perfect example. She is one of those people who never really liked computers, and who only uses it to check email and FaceBook entries for family and friends. For her, the computer is an ugly, mean little box that is there to torture her. She sits, punching keys, typing things into the screen and in general trying to force the computer to do what she thinks it should be able to do.

Often what she is doing is not something that the computer was programmed to do. I tell my mother repeatedly “the computer will only do what you tell it to do,” it cannot read your mind. It does not know how you feel, and it certainly does not know what you mean by that. A computer just follows instructions.

Recently, as I finished my little speech to my mother and helped her reboot her computer for the third time in a day, it occurred to me that a lot of the problems CFOs and management teams have with revenue assurance can be boiled down to this same issue.

Like a computer, the revenue assurance team is a tool at the disposal of management to help solve problems and get information. Like a computer, the revenue assurance team is capable of doing many different things–if you give it the chance. And, unfortunately for most CFO’s and managers, a revenue assurance team, just like my mother’s computer, only does what you tell it to do.

Yes, it is ironic, but if the CEO and the CFO are not clear about what they expect to get from a revenue assurance department then the results are going to be equally unclear. If management changes its mind about what the priorities are on a week-by-week basis, then the revenue assurance department is not going to be effective. It is actually logical and obvious when you think about it.

Of course, in telecommunications today priorities constantly change, and what managers need actually do change frequently. The solution is not for management to stop asking questions and changing the direction. That is ridiculous! This is telecoms after all! Change and chaos is what we do! No, what is required is that, just as I keep coaching my mother, managers need to learn where the ‘keys’ are, and what, realistically, can be done.

Of course, a revenue assurance department is not really a computer, and it does not have a keyboard. So, what is the equivalent of the keyboard and instruction set? How do you set up the structure for communicating with and getting the results you want from your revenue assurance team? Yes, it’s those dreaded KPIs. The KPI, or Key Performance Indicator.

KPIs are much more than irritating numbers that show up on your reports each month. The KPI is the one, pure, clean, unadulterated thing by which management communicates to the revenue assurance team exactly what is expected of them. Is it any wonder that requests for help and training on setting up the right KPIs have lately become the top demand from the GRAPA membership? Yes, members used to ask for Standards and Certification, and now that we have been able to satisfy the professional community with those two things we are seeing KPIs emerge as the new top hot button. And appropriately so. KPIs are the one thing that managers seem to understand least.

The KPI defines your expectations. They communicate what, at the end of the day, the effectiveness of your revenue assurance. So of course, if your KPIs are wrong, if they are not in alignment with what you are doing, or with what management expects, then you are going to be in trouble.

Some of the “other standards bodies” out there have generated some of the funniest KPIs I have ever seen. They issue KPIs regarding the percentage of rejected CDRs issued by a mediation system, and other such highly technical things. Unfortunately, while these KPIs might be interesting for an I/T guy, or a Software Salesmen they are worse than meaningless for the revenue assurance team.

Around the world, in pursuit of often ridiculous and meaningless KPIs, naïve revenue assurance professionals fight to reduce the percentage of rejected CDRs from .001% to .0001% (yielding a cost savings of only a few dollars a day). And, they do this while their organizations continually launch products and rate plans that generate negative margins (selling things that cost more money than they make), lose millions to fraudulent partners and SIMBOXes, and in general rush toward the doors of bankruptcy.

I do put some of the blame on the revenue assurance professionals themselves for this phenomenon. Certainly, a revenue assurance professional that knows what he or she is doing will understand that they have a responsibility to ensure that they:

• Rationalize their efforts – ensuring that they deliver maximum value for their investment.
• Perform with Integrity – ensuring that they work on what they really believe is the highest priority.

Ultimately, the revenue assurance manager can only advise top management. If top management decides that the best way to measure the effectiveness of a revenue assurance team is by how many CDR’s they can “shave off of the reject bucket”, then that is exactly what they are going to get.

Unfortunately, the most common scenario I have witnessed is when management and the revenue assurance team set up leakage and CDR based KPIs that neither truly believes has value (but are the KPIs that they believe they should use). In the meantime, the CFO sends the revenue assurance team into situation after situation having nothing to do with those silly KPIs.

Revenue assurance teams around the world are involved in user acceptance testing on new products, new technology assurance (making sure that new network components generate billable transactions), fraud detection and margin assurance. Each time the revenue assurance team “helps out”, they are given a “thanks for the good job”. But at the end of the year, it is not the “good job” that dictates the status of the revenue assurance team, it is the KPIs. Since those KPIs are only vaguely related to the job the revenue assurance team is actually doing, everyone is dissatisfied.

So, the long and the short of the story is this: if you are unhappy with your revenue assurance team’s performance, then maybe the first place you need to look is not software, hardware or personnel changes. Maybe the first thing you need to do is to take a good hard look at your KPIs and determine if they are really providing the desired results. If you don’t, then you are going to be just like my mother, sitting there constantly re-booting the revenue assurance “computer” while you try to get it to do what you think it should do..

Until next time, this is Rob Mattison saying … be safe