In the past six months, I visited two Revenue Assurance conferences. The one in November was a graveyard. Everyone was pessimistic and no one knew how the economic crisis will affect the industry in general and our field in particular. The one in March was completely different. While the crisis was still going strong, the conference was in full attendance and included many operators. In one panel session, five operators explained that while their budgets were left intact, they were expected to achieve more with it. In this climate, this consensus came as excellent news.

Now, I know we all say that Revenue Assurance is counter-cyclic and in times of crisis, it is the one field that operators cannot afford to neglect. However, it’s quite another to actually witness this. I’m happy to report that operators actually bought into this and share our view.  

Do more with less
Having said that, it’s always a good idea to achieve more with less, and more so during an economic meltdown. As it turns out, there are three main goals:
-         Identify more leakages
-         Recover more revenue
-         Prevent more leakages
To better understand these goals, let’s consider the TMF’s benchmark of RA standard KPIs:
-         1.19% of all revenue is lost as unbilled and under-billed leakage. This is an impressive number, especially considering it is actual, identified leakage, rather than an estimate.
-         About a fifth of this number is recovered by Revenue Assurance, which means RA contributes 0.25% to the operator’s revenue. Needless to say, no operator spends a comparable portion on RA. As a side effect, investment in RA is perhaps the cheapest way to increase EBITDA, profits and margins.
-         Unrecovered revenue is nearly 1% of operator’s revenue and 80% of identified lost revenue. This is a lot of money to leave on the table, in any economic climate. While unclear why it is unrecovered, it makes for a very good business case for proactive RA: active avoidance of leakage saves nearly five times as much money.  Three Quick Wins
Using the three points from the study, we identify three possible quick wins:
-         In many cases, RA activities cover only a small portion of the revenue related data and processes. Increasing the coverage of RA activities is one easy way to generate cash and corporate good-will.
-         The ratio of recovered revenues out of lost revenues is barely one fifth. This is money that should have been collected by the organization. Automated recovery processes can take a big chunk out of this figure.
-         Finally, an ounce of prevention is worth a pound of cure. Proactive activities have a much strong economic impact than that of reactive RA. Unfortunately, it’s harder to demonstrate this to the management. Automation = Efficiency
Clearly asking the boss to “give me more resources and I will pursue all three points” is not the way. There are, however, more elegant solutions. The first is to automate RA processes, permitting existing personnel to focus on investigating data and preventing, finding and recovering leakages in a broader spectrum of the revenue streams. Automation requires external tools, internal developments, consulting etc. These cost money. But, the good news is that the vendors and consultants alike understand the situation and are offering many pricing models, permitting the operators to gain without doing substantial investments, e.g., revenue share, software as service, managed services, etc.  Best Practices are good for you
Five years ago, there was no standard RA methodology. Each company tried to invent the RA wheel on its own. A lot was learned from these attempts, although at some cost, as learning processes are bound to. Today, Best practices and de-facto standards for RA are developed and maintained by the TM Forum and its members. Using these standards can increase the efficiency of RA significantly.