Dominic Smith assesses the telecom industry’s revenue assurance problem and argues that pre-integrated BSS suites provide the foundation to eliminate revenue leakage at source.
Revenue leakage continues to be a huge challenge for mobile operators all around the world. Last week Juniper Research released their latest industry report, which revealed that more than $58bn was lost in 2011 through revenue assurance and fraud issues, equating to approximately 6% of global mobile revenues.
No doubt due to the sums of money being reported, this story was picked up not just by the industry press, but was even covered by the wider media including the BBC. However almost without exception, the telecoms press seemed happy to regurgitate the mantra that the leakage was down to ‘inadequate billing systems’ and that by implementing ‘automated system solutions that provide end-to-end visibility of the revenue chain’ (i.e. revenue assurance systems) everything would somehow be hunky-dory.
Firstly, let’s look at the question of inadequate billing systems. To point the finger squarely at the systems alone is somewhat surprising – it usually takes a combination of systems, people and processes to run a business. A billing system is also only as good as the way it’s configured and the data that you feed it, so if the system is poorly implemented or integrated in the first place, you’ve not got much chance to assure your revenues.
Then there’s the issue of system maintenance and upgrades. Unless your business is standing still, there will be new products and services to launch, new network equipment and applications to interface with, and so on. Which means that the billing system will always need further configuration and integration throughout its lifetime, and this will need careful planning and preparation to ensure system integrity is retained.
Looking now at the recommendation to implement automated revenue assurance systems, I fail to see how implementing a second system to check on the first system is not subject to the same configuration and integration issues? If it’s badly implemented and maintained, then it will surely suffer with the same issues as the core billing system.
So what next? Implement a third system to check the second system is doing what it’s supposed to do? This all sounds rather like a case of ever decreasing circles.
The other key issue about implementing revenue assurance systems is that your time-to-market is impacted, as you have to setup and test new products in two separate systems rather than just one. And then what’s the revenue loss of being slower to market with a new product or service?
The market for revenue assurance systems has been growing steadily for the past 10 years. However, as respected industry analyst Susan McNeice commented on Billing & OSS World’s coverage of the Juniper Research report, “the 3-11% range for RA alone, exclusive of fraud, was established as an estimate in the mid-1990s”, so things aren’t really getting any better despite all the investments being made in RA systems.
There’s absolutely no doubt that revenue assurance processes must be a core part of CSP operations, but this needs to be geared around checkpoints, dashboards and end-to-end process monitoring in existing systems, rather than through implementing duplicated processing engines and comparing the results.
Revenue assurance must be about proactively addressing the root cause of issues and stopping them happening again, rather than reactively treating the symptoms and trying to recover lost revenue. Put simply, it needs to be part of the business support systems DNA, and this comes much more naturally in a pre-integrated BSS stack, rather than by piecing together disparate systems through integration and data replication.
Revenue leakage is the natural side-effect of complexity. The more complex your systems architecture, the more complex your product portfolio, the more complex your integration, and the more points of failure exist. And as the Juniper Research report suggests, this complexity is only set to increase through the deployment of 4G/LTE services.
By implementing a pre-integrated BSS suite built around a common database, with a single product catalogue and a single master customer record, you can prevent integration ‘gaps’ from appearing in the first place and provide a much firmer foundation for revenue assurance in the future.
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