.gif)
REVENUE ASSURANCE - An effective plug
Considering the scale of revenue losses that many telecoms operators incur, it is vital that they identify the causes, quantify their magnitude and then set about addressing these leakages in a holistic manner. Dominic Smith looks at the main causes of revenue leakage, and outlines ways in which operators can resolve these with the help of end-to-end pre-integrated business support systems
Revenue assurance continues to be a key concern for most telecoms operators. An on-the-show-floor survey carried out by Cerillion at the 3GSM World Congress in February identified it as one of the three most important business issues facing telecoms operators today, with 15 per cent of respondents acknowledging it as their most urgent concern.
This is hardly surprising when you consider the scale of the problem. Latest estimates suggest that as much as 10 per cent of total provider revenue is still being lost due to revenue leakages. In today’s competitive telecoms environment, this situation is unacceptable. And to retain competitive edge, operators need to ensure they are tackling the problem proactively.
Arguably the most important cause of revenue leakage is poor systems integration. Unfortunately, this is often a characteristic of the traditional best-of-breed approach to the implementation of business support systems. With this model, systems integrators are often tasked with implementing and integrating multiple heterogeneous systems to build a complete solution. Invariably, they encounter two key problems that make effective integration difficult.
First, they typically discover incompatibilities between the data models used in the best-of-breed systems. Synchronising data across different applications is complex because of the need to align different ways of identifying the subscriber, service and orders. However, if these mappings are not carried out properly, the operator will struggle to trace orders across the systems.
Second, the systems integrator may not have an in-depth understanding of all the best-of-breed components. As a result, it may integrate the systems inefficiently and introduce data replication or unnecessary layers of complexity, all of which can result in holes where revenue leakage may occur.
Process problems
Poor integration typically also results in a host of process problems. It may for example lead to data entry in multiple systems or incompatible configuration between solution components. The consequence of this may be, for example, rating/prepaid charging errors - essentially applying an incorrect price to a customer record or not being able to price the record at all. These errors will result in usage that cannot be billed for and, ultimately, revenue leakage.
Incomplete or incorrect usage data is another primary cause of leakage. This problem often occurs when network switches produce erroneous information and prevents the operator identifying the type of service used by a customer or the customer using that service. In either case, the result is an inability to bill for usage incurred.
Poorly integrated systems with no common workflow can also lead to delays in billing. Sometimes manual set-up processes for new services cause a delay of several days to occur before the operator can start invoicing the customer, inevitably resulting in a loss of revenues. In contrast, a fully automated process with flow through provisioning enables the operator to start billing for service use immediately.
Invoicing system errors are another potential cause of revenue leakage. Traditionally, the problem is thought to be primarily one of under-billing - operators failing to invoice customers for services received. In fact, over-billing can be just as significant. This typically occurs when a service is terminated but the operator continues to bill for the service in error.
It will often result in costly customer disputes and the requirement to generate refunds or provide credit as a goodwill gesture. Valuable time and resource may be required to fix the offending process, and further revenue leakage will occur indirectly as a result of growing customer dissatisfaction and increased rates of customer churn.
Launching new products and decommissioning old ones are two other areas where a badly coordinated system can cause further revenue assurance problems. Businesses often leak money both by providing incorrect tariffs for new services and by not taking older, more costly products out of service quickly enough.
Reactive versus proactive
Putting additional systems and checks in place is largely a reactive approach to revenue assurance in a best-of-breed solution. In essence, it is a ‘sticking plaster’ approach to plugging the gaps in the system. Rather than dealing with problems at source, it focuses on putting processes in place which track where revenues are being lost and then try to correct these errors retrospectively.
As a result, problems can stay hidden for some time and their source can remain obscure. Operators may initially believe that they have billing issues or that they are suffering from credit management problems. In fact, when they carry out thorough ‘root cause analysis’, they often discover that their problem is order management related.
If the system is not proactively managed, a mistake made in this initial order process will not be discovered by the operator for a month or six weeks, when the customer receives his first bill and finds he has been placed on the wrong tariff or is being billed for a service he never received, for example.
In contrast, the best end-to-end pre-integrated solution suites give operators the confidence that all elements within the product suite will work together in harmony. The holistic approach of these systems is clearly in line with operators’ increasing desire to address and monitor the whole lifecycle from the initial order placement right through to billing and cash collection.
These solutions also enable operators to be much more proactive. Rather than merely reacting to problems when they occur, their seamless connectivity offers a means to prevent ‘gaps’ in the system appearing in the first place. In other words, they treat the root cause of the problem rather than the symptoms.
The tight integration of these solutions helps eliminate data replication and synchronisation problems. In addition, embedded workflow and order management functionality allows front-end orders to be successfully transitioned to the back office, ensuring all services can be billed for and eliminating revenue leakage at source.
The pre-integrated nature of these systems allows key business information to be proactively tracked, detailed reports to be generated for each process, revenue leakages quickly identified and revenue losses minimised. It is hardly surprising, therefore, that ever-greater numbers of operators see end-to-end pre-integrated solution suites as a vital weapon in their ongoing battle to achieve genuine revenue assurance.
Dominic Smith is Marketing Director, Cerillion Technologies
Share this article with others
Post to del.icio.us
Printed from http://www.eurocomms.com/features/111796/REVENUE_ASSURANCE_-_An_effective_plug.html
Comment on this article
Skip to comments
We encourage users to analyse, comment on and even challenge European Communications's articles, including the one above - 'REVENUE ASSURANCE - An effective plug'
User reviews and comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site.
Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. We will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site.