Revenue Assurance can only be defined by the company that is attempting to implement a Revenue Assurance Program, Software Solution, or Department.  The description of Revenue Assurance, at least to this author, is that it’s a culture.  No matter how much a company spends, no matter how hard a company tries to rein in revenue loss, without acceptance of the culture by the entire company, it will eventually fail. 

The theory is that every communications company losses 10 -15% of unwatched revenue.  Revenue Assurance is the discipline of “watching” or, as I like to say, “…paying attention”, and although the statement sounds fairly simple, Revenue Assurance is not.  Revenue Assurance is a complex discipline that affects every facet of the company from initial customer contact to rendering an invoice.  Revenue assurance does not stop with the collection and proper accounting of the usage data, but continues into the financial statements with the validation of the company costs directed towards the collection, distribution, and billing of that data.

 An individual who works in Revenue Assurance is an auditor.  Sorry for the label, but that’s it.  You will not make many friends, not if you’re good at your job, and if you’re very good at your job, upper management may wonder why you’re still around when your key indicators are so low!

 The best place to start with Revenue Assurance is at the highest level in the company pecking order as can be achieved.  This is where the requirements for the job reside.  Every executive has expectations of what the company should realize based on input, output and growth.  This translates to what the manager of the Revenue Assurance organization is expected to achieve, which is the key indicator in any Revenue Assurance group -- return on investment (ROI).

How many customers were signed up last month, quarter, year, and how much prospective revenue is anticipated?  Revenue Assurance is the discipline of answering this question, when after weeks of painstaking research the answer to the executive offices is, “…should be, maybe, was supposed to invoice, cost overrun was, estimated at, really not sure…”

Within the communication industry, Revenue Assurance accounts for a larger return for cost per labor hour than any other discipline in communications.  So much so, an entire industry was created to address this single phenomenon with many vendors accepting a fraction of found results as compensation.  Most companies are readily willing to have these vendors come in and find lost revenues rather than build what they feel is another cost center.  The catch, the revenue stream has to be constantly watched.  If not, losses can rise exponentially once the watching stops.

Where to start?  Once a company gives the go ahead to create a Revenue Assurance department, there are three areas that are essential to move on immediately.  The first and most important is the mediation platform.  This is the central element in any Revenue Assurance effort and should be responsive and interactive.  A store and forward platform simply will not suffice.  There is a need to collect, categorize, and report on all usage elements.  Reports need to be accurate and timely so that the proper authority can be noticed to start corrective action.  Revenue Assurance is not the discipline of fixing the trouble but finding and defining the solution. 

The mediation platform must have the capability to screen key data indicators that will trip triggers and notify the Revenue Assurance process of any unexpected data flow.  Key indicators are data types, data flow, data amounts, time of day, day of week and total performance.  These indicators need to be kept by network element and audited every time they move from one system to the next.  The mediation platform needs to do this.

The second item necessary in this industry is an ability to test each network element with a method that allows the element to be exercised as close to reality as possible.  This is done through testing equipment or software that will simulate functionality in the element to generate CDRs reflecting the use of the element.

The Revenue Assurance organization should have the ability to set up accounts as customers just like real users.  These accounts will cover all of the services the provider has for sale, and be setup without the knowledge that they are “special”.  The normal service ordering process is used whether through a customer service representative or through an online self-service capability.  The invoice for the service should be sent to the Revenue Assurance manager. Once accounts are set up, testing can begin and should be done with a desire to “break” the system.  Revenue Assurance needs to know where the problems are, if you can break the system so can your customers, and when they break it, you lose revenue.

The third area of the Revenue Assurance effort is a data repository.  This data warehouse must be set up to accommodate all of the usage data the provider acquires so that it may be analyzed, compared, and reported.  Unlike the mediation platform this repository needs to have access to downstream systems, Billing, Provisioning etc., so that it can validate accounts and the revenue generated based on invoices rendered.

Once in place, this system tests the overall performance and accuracy of the ordering process, the operation of the network element, the data collection, the data dissemination, the billing, and the proper invoicing of the user.  Also, it can be easily adapted to validate reciprocal compensation and intercarrier settlement agreements.

Where to go from here?  One must decide whether to build the discipline in-house, purchase a Revenue Assurance system, or use a Service Bureau that specializes in the Revenue Assurance process.  Whatever the decision the solution needs to be accepted by the company and incorporated into the culture.  There should always be an internal Revenue Assurance expert that can oversea any solution.  The inspector general, if you will, that validates the solutions and its results.

This in-house expert needs to keep their finger on the regulatory and non-regulatory pulse, work within the financial construct of the company to adapt to reporting and auditing changes.  They must also become knowledgeable with the service provider’s services, and work within the network and engineering process to adapt to any changes in service delivery.  Covering the marketing framework would also fall under the umbrella, so that new services, special programs and pricing changes aren’t surprises. 

All this, Taxation and Sarbanes Oxley, if you’d like to discuss Revenue Assurance, contact us at TeleSciences.  We’d love to talk about it and our solutions.