Ten Tips for Starting Revenue Assurance
One of the most common questions I am asked is "how do you start doing revenue assurance (RA) in a communication provider that has never done any before?"I suppose I always put off writing a public answer because I get paid for providing consultation. Giving away the answers for free means I get less money! However, here are my 10 tips for how to start doing RA for the first time.
- Use a list of major variances to outline ambitions, and then use a list of detailed leakages to further define scope and priorities.
- Gather relevant information already known to someone in the business.
- Prove your worth with quick wins.
- Spread your coverage with "quick and dirty" audits.
- Emphasize versatility and a range of skills amongst your people.
- Admit your ignorance and ask stupid questions.
- Engage a broad range of executives with tailored messages.
- Adopt the mantra of "who, what, when."
- Adopt and adapt an off -the-shelf strategy by using the maturity model.
- Get into the loop and get information about the future.
1. Use a list of major variances to outline ambitions, and then use a list of detailed leakages to further define scope and priorities. Setting a scope and communicating what that scope is can be one of the biggest impediments to getting forward momentum when establishing RA for the first time. Begin by establishing your high-level ambitions using the variance analysis described in the article entitled Using Variances to Set the Scope for Assurance in Chapter 4. Most practitioners begin with only a narrow scope of finding and resolving core leakages, but not all do so. Depending on the communication provider's business model and the priorities communicated by the executives, it may be appropriate to include areas such as cash collection, cost management, and network utilization in the scope from the very beginning. If so, be clear about this. Once the broad ambitions have been set, it is time to break out the specific goals.
In practice, many new RA functions find they cannot cover the full scope they set for themselves with the resources available, so they need to have a clear sense of priorities. Decide what detailed controls you want to ensure are in place during your first year and maybe for a couple of years after that. Do not bother to forecast after that; the business will keep changing and you can only guesstimate how quick your progress will be as you cannot know the scale of challenges and leakages in advance. Do not try to be clever by trying to work out every possible leakage your business might suffer.
Any list you come up with is bound to be incomplete, so save yourself some time and trouble and borrow from the TM Forum's leakage framework. You can find it in the TM Forum's RA Guidebook GB941 (Priezkalns, 2009). Not every leakage in the list will be relevant to your communication provider. Identify which ones are relevant, and then make some decisions on which ones will be in scope and which ones will be outside the scope. Give yourself a sense of priority as to which you want to investigate and deal with first. By doing this simple task, you have a solid foundation for explaining your role to your bosses and other people in the business and for showing how you are managing the work by identifying what to cover now and what to leave for later.
2. Gather relevant information already known to someone in the business. A lot of RA is good common sense about how to run a business and stop mistakes. This means that even in a business where nobody has been employed to do RA, there probably are people who already do the relevant tasks. They may be monitoring a specific leak or doing work that helps prevent some kinds of leaks. Instead of duplicating their work in ignorance, make the effort to speak to people around the business and ask if they have measures that will help fill the grid of leakages you created from the leakage framework. Perhaps billing operations do some sample checks of bills. Perhaps internal audit did an audit of suspense management last year. Perhaps the engineers make test calls that are compared to bills. Perhaps internal departments check internal phone costs, and this highlights occasional problems. Perhaps customer services keep track of the number of upheld complaints about billing accuracy.
In short, look through your grid of the leaks to cover and identify if there is somebody in the business who might have some useful data. Find them and speak to them. If there is some data, even if not perfect, it will help you to determine if there is a serious problem or if the risk of leakage is under control.
Perhaps you can generate some quick wins by suggesting small changes to the tasks people already do. For example, perhaps the billing department does sample checks of bills, but they do not keep a record of the value of errors they find. Persuading them to keep a record will give you a new metric. If, after speaking to people, you find there is no data for some of the leakage points, then you have a stronger business case for implementing new measures and controls to fill the gap because you can be confident that nobody else is managing the risk. Finally, the other big benefit of talking widely about
RA is that you will get a good idea of who are your natural allies in the business, and hence who will work with you to deliver results.
3. Prove your worth with quick wins. After you have done your survey of who knows what, focus your efforts on one or two areas that are very likely to generate straightforward and valuable financial benefits. Even if you would prefer to do something else first, pick the areas where you are very confident there are leaks with a significant financial value, where you have a good idea how to stop them, and where you believe you can get results quickly without needing to spend much money. Favor issues where you feel that other people in the business are more likely to support and help you, and avoid those issues where you expect to face a lot of internal resistance. It is more important that you can show you can fix the leak, and demonstrate the value, than to pick the biggest leak. Prioritize smaller leaks if you can resolve them and show the benefits more quickly. If you can, also favor those leaks where you can recover some of the loss; e.g., through back-billing. Your focus must be on overcoming skepticism. Generate the belief that RA adds value to the business, which is why a smaller but quicker win may be better than a larger win that takes longer to deliver. Building confidence and a track record of delivery at an early stage will make it easier to overcome obstacles later on.
4. Spread your coverage with "quick and dirty" audits. Despite the advice to focus on quick wins, avoid the temptation to put all your resources into fixing known problems. Use some resources just to get some understanding of leaks that have not been covered before and where you have no data. A quick and dirty audit, perhaps based on a small sample, is sufficient to provide you with an impression as to whether an area has serious problems or is generally fine. Do not worry about following a perfect approach; just do a rough check to see if there are serious issues. If everything appears fine, you can report to management that you have done a little work and there is no urgent need to act, although you will need to do more detailed work later. If there are problems, you may find other opportunities for quick wins that you can prioritize above some of the leaks you knew about before.
5. Emphasize versatility and a range of skills amongst your people. The range of skills needed to do RA is phenomenal. It could involve everything from writing an SQL query to having an intelligent conversation about the IFRS for revenue recognition. It needs people who can understand technology and people who are good communicators. In the early days of doing RA, it will be very hard to assemble any kind of team, whether a project team, dedicated staff , or a virtual team, with the full range of skills needed. Be aware of this, and try to find individuals who are versatile, adaptable, and willing to take on tasks that will move them out of their comfort zones. Do not employ people who feel they know it all already; prefer people who like to learn and expand their horizons. If you employ a programmer, try to find one with strong interpersonal skills. If you recruit an accountant, choose one who understands technology. Encourage team members to broaden their skills by learning from each other and by substituting for each other.
There are some very bad role profiles circulating around RA circles that seem to say that everybody in the team should have the same kinds of skills as each other. They make no mention of other relevant and useful skills. There are also some very silly profiles that ask for every imaginable skill to an unimaginable degree of proficiency. Be realistic and try to find the right blend of people who will complement each other. Most important, the manager must resist the temptation to recruit only those people from the same background as he or she is. It is harder for a manager to lead people with specialist skills the manager lacks, but good RA demands it.
6. Admit your ignorance and ask stupid questions. Every culture is different, so it is hard to generalize about this recommendation. However, RA people usually do better if they are seen as friends who work with the business, and not as policemen who hand out punishments instead of help. People in RA cannot know all the details, and the best way to learn is to talk to people in the company who know how things work and to learn from them by asking questions. This serves two important purposes. First, it educates you and your people. By understanding how systems and processes work from end to end, you may spot potential leakages, or opportunities for controls, that have previously been missed. Second, by asking a question you may make somebody else think again and realize there is a problem they had not thought of before. Perhaps an engineer is doing a very good job, keeping his boss happy and meeting his deadlines, but nobody asked him about possible financial implications if such-and-such happens. If you ask him, he may realize for the first time that the business is losing money and he may also be able to suggest how to do things differently. He may do this quicker than you could do it.
When this happens, try to have a positive relationship and to share credit for finding and solving the problem. If you share credit, people will be willing to work with you in future. If you give blame or try to keep all the credit, then people will be discouraged from helping you again. It is important that your bosses also think of RA as a means of delivering the desired results by taking simple initiatives like talking to people and asking questions, as well as by involving lots of software and tools.
Remember that there are no "stupid" questions. Even a very simple question may highlight a misunderstanding or a mistake that is costing the business money. Be humble and appreciate that you can also make mistakes and misunderstand things, so find ways to confirm if your understanding is correct. A straightforward way to do this is to explain back what you have learned.
Be brave and ask questions, even when you deal with unpleasant people who think you are ridiculous to ask them. You will not convince everyone, but if you persist, you will succeed, and it is important for you to emphasize that in this world, in every company and in every country, mistakes will happen. It is your job to ask questions to try to identify and prevent those mistakes.
7. Engage a broad range of executives with tailored messages. Presentation is very important. If you present useful information, then you have the chance to become friendly and win the support of many executives, and not just your boss. If you present big totals but with no drill down, or long lists where only a few items are relevant to the person listening, you will lose support. If you present a good-sounding idea but no numbers, you will lose interest. Wait until you have some of your leakage map filled in. Then ask politely to arrange one-to-one meetings with a wide range of executives in addition to the executive you report to. If you have relevant information, you might end up with individual meetings with the CEO, CFO, COO, CIO, CTO, CMO, and so on.
Call big roundtable meetings sparingly. If you talk about RA to a large and varied audience it may save you time but at the price of wasting the time of everyone else. Try to set agendas that concern most participants most of the time and show your appreciation for the time everyone contributes when they attend your meeting. Keep meetings with executives short and focus only on topics of relevance to the specific executive, while restricting the content to explaining a few big issues. Highlight the top few leakage numbers with a known cause, plus a few big risks areas where you have no measures and where there is no indicative data. Be clear about actions that need to be performed and try to schedule follow-up meetings that will discuss whether these did happen. In short, if you can show executives how you support them to meet their targets and how to look better when dealing with the rest of the executive team, you will acquire the influence to get information and to promote change all over the business.
8. Adopt the mantra of "who, what, when." Because of the variety of work in RA, you need very adaptable people to do it, especially in the early days. Even if you pick adaptable people, it is still natural for them to concentrate on the things they are good at, have experience of, and like to do. They may consciously or subconsciously do more of the work they like and not enough of other work that is more important. For example, some people will like to query data and detect problems, but do they follow through on the fix that needs to take place? Perhaps some members of the team like to find problems by creating process maps and holding workshops, but do they interrogate data to back up their theory by quantifying the actual amounts lost? You must constantly strive to finish every job because there is a natural inclination to leave RA jobs half-done. Obstacles to progress can arise at any time; you must create a working culture where obstacles are overcome instead of allowing people to give up and try something different. Deal with this problem by adopting a simple mantra that everybody will repeat and will get used to following habitually. After every task, the next question on everybody's mind should be who needs to do what and by when to follow up. Only when the problem is fixed permanently can you stop asking who, what, and when.
The"who, what, when"mantra is useful to every team at every level of maturity. Get a head start by adopting the mantra at the very beginning and making it part of the team ethos. That way, when the next step is far from obvious, people still feel the responsibility of making the next step happen. Sometimes you know what needs to be done, but not who in the business should or could do it. Sometimes you know there is a problem, but are not sure what needs to be done to resolve it. Sometimes you know both who and what, but are not clear on the relative priority and urgency. Repeat the who, what, when"mantra and encourage everybody you work with to take personal responsibility for finding the right person, defining the tasks that need to be done, and quantifying importance. In short, make it clear that it is everybody's responsibility to learn and ask questions to get answers, whether the answer is a name, a task, or the evidence needed to determine a relative priority. There will be very many questions to ask and very many answers you need to find. Encouraging people to take responsibility, to be autonomous, and to use their initiative is vital to rapid delivery.
9. Adopt and adapt an off -the-shelf strategy by using the maturity model. The Revenue Assurance Maturity Model, described later, can be used to help strategic thinking about RA. It can be used when just starting out on the road to RA or in a business with extensive experience of putting RA into practice.
In the early days, strategy may not seem important but the self-assessment is quick and powerful; it can be performed within a few hours and requires no specialist knowledge or data. Though quick, the maturity questionnaire distils the collective experiences of many businesses. If you have walked around the business and created your leakage grid, and attempted to arrange a few meetings with executives, you will know everything you need to know to assess the RA maturity of your business. The results may surprise. Just because you are starting RA does not mean the business is starting from the bottom in all aspects of what is needed.
Using the maturity model will give you a simple basis for communicating strategic priorities to senior people and a quick mechanism to lay out a road map for how RA should develop. It ensures that the key pillars for good RA are all considered: organization, people, influence, tools, and processes. Making sure you think about all of them will help you to balance priorities and ensure that you improve each aspect at the same rate. Using the maturity assessment is particularly helpful for avoiding traps and mistakes that occur sometimes, where an RA team makes rapid progress but then loses a sense of direction because it focused on too narrow a sense of its purpose.
10. Get into the loop and get information about the future. In the rush to fix the current problems with your business, it is easy to fall behind. Many RA teams discover, much to their horror, that they end up dealing with yesterday's problems, while paying insufficient attention to the problems of tomorrow.
It can feel like the RA team is always struggling to play catch-up. Avoid this by pushing for the RA team to be represented, or at least informed, in case of any new system changes, business transformations, and product launches. You may not have the resource for a thorough review, but at least perform a high-level analysis of the potential risks for leakage and the key controls that should be put in place. Knowledge of what lies ahead will often change the priorities for RA and will help ensure that the most important considerations get the bulk of the limited resources available. A few simple questions about potential leakage also help the business because they can often lead to improvements in system and process design that will reduce the risk of errors. In addition, it is often much cheaper to implement controls if they are included during the initial design stage of a project.
These are my top 10 tips for starting RA. There are, of course, many other things that need to be considered when starting RA. It was a struggle to keep the list to just ten tips. The beginning is a vital time, and the impression you create and how much momentum you generate will determine how rapidly you make progress for years to come. I know of big telcos that claim to have mature RA but where it is clear they started down the wrong path at an early stage. They may find it difficult to get back on track later, no matter how much is spent on staff or tools. This is because RA is much more than the job done by the RA department, and it is crucial to influence the rest of the business to behave in ways that support and enable the goals of RA. Funnily, the best time to influence the rest of the business is at the very beginning. At the beginning, there are no clear expectations and the lack of resources makes it easy for RA people to ask for help and show how they can work well with other staff. Make the wrong start, and other staff may fear the RA team, obstruct its work, or compete with it. It is harder to reverse the damage of bad relationships than to get the relationship right at the very beginning.
If you are starting RA for the first time, you have my sympathies because the challenge may be daunting. But follow these top ten tips, and know that if you start right you can make a very important contribution not just to the bottom line but to how your business works. The beauty of RA is that when it is done right, the benefits are enjoyed in the short term and the long term. It cuts across many aspects of the business and provides a never-ending learning experience with a fresh challenge every day. That makes my eleventh tip the best of
Eric Priezkalns is the founder of talkRA.com, the Web site that gave rise to this book. He is currently an assistant director at Qtel International responsible for enterprise risk management. Eric has over 10 years of experience in the communications industry in the fields of risk management and revenue assurance. Eric was the original (and much imitated) revenue assurance blogger. Having built a loyal readership worldwide, Eric decided to join forces with other thought leaders by forming talkRA, which went on to establish itself as the Web site for practitioners to get insightful views and the latest news about revenue assurance. Eric was responsible for the program that saw T-Mobile, UK become the first CSP to satisfy the UK regulator's stringent metering and billing accuracy expectations across all communication services without exception, including those provided using the then-new 3G network.
From Revenue Assurance: Expert Opinions for Communications Providers by Eric Priezkalns. New York: Auerbach Publications, 2011.