Revenue Assurance

Revenue Assurance refers to a formal management system to ensure the integrity of the revenue management chain. This includes identification and reporting of the risk of revenue loss.

One industry in which revenue assurance can make a significant impact on profitability is the Telco industry. This is due to:

Increased regulatory requirements [including SOX] as to how Telcos monitor and report their revenues
Increased pressure to realize profit on highly commoditised services
Demand by stakeholders to reduce operating budgets
Inadequacy of many existing revenue management and billing systems to keep pace with the rapid changes in technical and marketing innovation

All of these factors drive the increasing need for increased revenue assurance management.

The Telco domain is extremely broad and complex, in spite its rather simple outward appearance. Any revenue assurance program must consider:

Switch programming and behaviours
Business operational systems
Enterprise operational policies and procedures

Regulatory Requirements

Whilst Telcos by nature track their revenues carefully, many areas such as those listed above are not adequately assessed for revenue loss. This is partly due to the lack for formally defined processes covering these areas, and to the lack of technical capability to do so in a cost effective manner.

However, regulatory pressure now demands that these leaks are plugged and that the organisation is fully accountable for all revenue. This has forced Telcos to look more closely at how they track their network and billing activities. This requirement for full transparency is boosting the demand for revenue assurance integrity.

Profitability

Many standard telecommunications services are now highly commoditized, with the market base at maturity and competition highly aggressive. This has tightened margins to very low levels, demanding more innovation in how services are packaged and priced. To append the potential profitability, marketers are looking at how they can avoid revenue loss, as much as how they can capture revenue gain.

Convergence

Telcos are all tackling convergence in different ways. Some are expanding their portfolios within their own corporate boundaries. Others are merging with existing complementary competencies or outsourcing certain services. Regardless of the strategy to provide a fully converged suite of communications capabilities to its customers, the Telco still retains the role as prime vendor. And this means they must be capable of converging not only services into a seamless offering, but also the billing and support of those services.

When multiple disparate mediation and billing systems are forced to work together, errors in the revenue management process tend to increase. In addition, the additional workload can overpower existing systems, already often operating at near maximum capacity and with limited flexibility to incorporate new billing configurations. This further increases risks and errors in revenue management.

Innovation

The past ten years has seen a radical change in telecommunication network infrastructures and business operating assumptions. Every month, new technology, products, price plans, and marketing tactics drive further demands in the capability of the revenue management system. As the rate of innovation increases, the rate of failure of RA systems also increases.

NEXT: Defining The Telco Enterprise