Rev Assurance to Rev Management :: Leading change of thought process

Apologies for any typing / grammatical errors! Please point out the same through your invaluable comments.

I was reading the book, “Leading Change” by Philip Kotler– and found it amazingly simple to understand. (Suggest everyone who is in business). It s really about 8 vital mistakes so called business leaders do, the 8 things the good business leaders wont do, or rather the things the good business leader would do while creating a better business. Side by side, I read a great post on revenue assurance by Eric on the talkRA blog. (http://talkra.com/archives/1050#more-1050).

and I really found a couple of things freakishly not discussed. That is about the need to change the outlook from the perspective of “revenue assurance” to “revenue management”. No gimmicks– no marketing pitches, no sales pushes– the transition needs to be at the thought process before a real world implementation. So here I am trying my hand as the good Samaritan and bridging the gap in here– and trying to lead the change

Now, the agreement with the blog is that RA, is really a cross-domain need, so horizontal growth is a choice (though debatable), and vertical growth enables the company to get more revenues. So beyond a company’s need, let us discuss a few points on RA. So here they are:

Points to disucss:
1. RA as it started.
2. RA today
3. the COTS myth
4. Growing need of assurance
5. The movement of ideas for a solution
6. What happens to the “product” model created
7. Making a sustainable eyeball business

1. RA is not a new domain for telecoms. RA started and is as old as fraud management for telecoms. Initially operators realized the glitches being faced and tried to do good with the rating, billing and invoicing processes. That was probably where RA started off. I’m not sure if this task got the name of RA back then, but the scope grew.

2. Till sometime back, RA deployments was about ensuring switch-to-bill reconciliation. The scope had grown only from billing assurance to start from switch to invoicing– the full usage chain. All the wise men realized the back log and brought in the entire network, including inventory, subscriber and everything where there was a movement of revenue. RA still grew.

Now there has been a volume expansion of data to be handled for RA. Large number of theories grew, starting form sampled based approach to full data handling approach. Everything was and is  still growing within the scope of RA. Today “RA” encompasses a very wide horizon of activities across all operators. In the yesteryears, people were not sure of the need and the “to-do” list under RA, now they do, and have a very clear idea of what they want.

3. There was a time, when people were really experimenting with the concept of RA to see what could be done, and what not. Now, all of us looks for a COTS application. The myth prevailing is that it would be a box which would solve the RA problems. — WRONG!!!! An out of box product would let you control only a few known areas out of the many unknowns. Lets take the case of mediation systems. If you think checking the problems around mediation would solve all the world’ hunger problem of RA, think again. Mediation anomalies no doubt form a large chunk of problems, but that is not always the only BIG problem area. It really depends on the geography and the type of the operator. It is not exactly about one-problem-one-fit-solution-for-all (– don’t know if there is such a tagging phrase though.)   If you cannot figure out the real unknown sources of revenue loss, you are not doing RA. So ROI calculations jump out of the window in real life, but look good only on Keynote marketing presentations. The sense of RA is really to check the points where one did not know that leakage existed. How do u do that?? That is the million dollar question, but in any case, and out of box application cannot help you figure that.

4. So where is RA going tomorrow. Look around, the answer is all there. There is a huge crunch with dwindling revenues (ARPU); the costs are sky-rocketing; usage of “data” made available because of the high-speed connectivity is increasing at a high rate over conventional voice, SMS, and age-old GPRS;  the mobile phone consumer is the best way to reach out to the mass of customer which is calling in other players like Google, retail industry and even banking to use the same media— thus to add on to existing pain problems with revenues, we have revenue-share-holders; and as if this was not enough, competition is the stiffest challenge to meet. Here is an example of competition– DoCoMo launched a pay per sec plan in India. I know I am a happy customer because i am using one. Immediately all the major operators, Airtel, Vodafone, Reliance and Idea were literally forced to provide the same– objective ” save thy business from customer churn” . Who could help? Newer marketing and promotional programs coupled with exhaustive technology usage is the talk of the hour: “DoCoMo plans LTE cloud to avoid dumb pipe”– That struck the headlines on 19 Nov 09. All this, and then investments to improve in existing delivery to customers and provide new age services– coupling, all the network access technologies for the offerings; with zero knowledge of the fact the the business would be sustain the cost or not. Imagine the state of WiMAX — how many takers worldwide do we have. Similar for femtocells. Well lots of people have the hopes surviving on the success of these. I know I would never call an Inmarsat number–in India and from my operator it would cost me a freaking amount of INR 500 (or roughly USD $10) per minute.  That is where the revenue are all going — only investment and no big tangible returns. Anyone doubts that need for an RA solution? 


Well I do, and that is because if you look at the problem areas I mentioned , it was not about reconciliation of switch to bill– but it had a lot to encompass across a wide range of operational areas.

5. The ability to provide a scanner to ensure visualization of a proper revenue flow across such a  cross operational horizon of opportunities is the key requirement for such a vast problem space. The question is what to name this– Dealer management, Interconnect settlement, Revenue maximization, revenue assurance– or what?? face it— simpler the better. The art is to think objectively and yet simply. The tasks I was talking about is essentially about how the revenue is getting affected– and the need is to ensure that the money-ins and money-outs are being managed properly. Thus simply speaking– it is about managing the revenue — everything that you have billed, and not billed, could not bill, forgot to bill, — everything. Hence I suggest the solution as “Revenue Management”. (for now lets keep objectives of revenue maximization out of the plate, we have too much to first manage before we think of maximizing).

6. So what do we need? rather what happens to the “product model” business of revenue assurance? Product sale dwindles?? yes of course, Operators are not being able to get a hold of revenue from the operations, why would one try to invest in newer RA products. What do the products do then? Well, the need of the hour has risen from switch-to-bill reconciliation, and thus the capability of offerings really need to speak the language of today’s need. Imagine an operator trying to deploy a 3G network with its existing POTS or PSTN network. 3G is yet to have subscribers  and the old network has millions. What would this operator do with an RA tool?? Ofcourse it needs it for both the networks. But the pain are is ensuring: (a) the deployment is simple and smooth with lots of tests. (b) subscribers have a smooth transition if they choose to switch services (c), commitments to subscribers are met (d) lowest possible costs . Now costs is something that anyone would love to minimize, so if one has tools to act even-if-as poor man’s solutions to address the needs, and also at the same time costs very low, the operators would like to consider. Once convinced of the capabilities the operators may obviously choose to go for long term relations. This is where services bundled with products would win the market. (There is a great article by Thomas Davenport in the Nov 2009 issue of Harvard Business Review. Suggest everyone to read the same)

7. When you know you are present everywhere to address the needs, you know the revenues would keep flowing in. This is exactly what I concluded by saying in my last post (a quote form Eric Schmidt). But true to the sense, Google really serves the role models for survival strategies for companies, esp. during transition phases.

This post is not meant to be a technical scoping document– or even business scoping document. There are lots of people talking about a lots of things– problems, solutions and the what would work and what not. What would work and what wont work is something only time can tell, but with the growing challenges, the need is more for collaborative efforts. There is lot to be achieved by the form of collaboration and symbiotic existence in the same ecosystem. It is like a jungle struck by sudden drought– Only those who would collaborate and co-operate would survive the race for existence– that is my opinion..

Please share with me your thoughts.

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This entry was posted in Business, Philip Kotler, Revenue Assurance, Revenue management, telecom. Bookmark the permalink.

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