Finding your RA nirvana

Suvradeep Bhattacharjee/Ovum
17 Jun 2010

We have witnessed the increasing importance of the revenue assurance function for a number of operators across the globe, but the underlying reasons for this trend vary widely by region. For North American telcos, the driving factor is revenue leakage from bundled services, while their European counterparts are struggling to gain revenues from new services such as content downloads.

However, there are conflicting views of the RA world. Vendors are marketing their tools and software as a means of identifying current and future revenue leakage; systems integrators and professional services firms would like us to believe that regular audits and process improvement projects are the magic bullets for RA; whereas major outsourcers' visions of the future are full of RA shared service centers and end-to-end managed services. Consequently, it is difficult to see where the future lies for the RA function.

The business challenges of RA come from coordination between billing, invoicing, and collection systems and processes, which are becoming increasingly complicated as the number of prepaid and mobile broadband subscriptions grows and content downloads rise. To complicate matters further, the number of billable transactions is reaching high proportions as more third parties become part of revenue sharing.

Telcos' charging processes are in flux, as revenue models for new content-related services in no way resemble the traditional switch-to-bill approach. Process expertise is indeed a key differentiator for the RA supply side, as telcos' current expertise is still in the legacy switch-to-bill area. Incumbent RA vendors are exposed to competition from new entrants that are more adaptable and are bringing about the demise of the rigid data models that make new service launches difficult to execute and still leave the telcos prone to high revenue leaks.

The RA agenda is now set by the board of major telecom service providers, with the RA department increasingly being overseen by the CEO rather than the CIO. Dramatic improvements have been accomplished in stopping revenue leakages across switch-to-bill processes, although these gains are fast evaporating as legacy networks change to IP. Establishing the credibility of the RA department is swiftly becoming the No. 1 issue for RA heads as they jockey for position in the fight between telco networking and billing departments.

Whichever market you look at, policing the revenue management chain remains the key task of the RA function; detecting and preventing revenue leakage through real-time monitoring is mandatory. However, the techniques used differ significantly because some telcos focus on leakage detection while those with mature RA functions are increasingly focusing on leakage prevention, thanks to a range of tools at their disposal such as baseline reporting.

Suvradeep Bhattacharjee is an Ovum analyst based in London

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