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August 2020

Opportunities & Obstacles: Consultant Luke Taylor Muses on the State of the Telecom Risk Assurance Business

Opportunities & Obstacles: Consultant Luke Taylor Muses on the State of the Telecom Risk Assurance Business

The risk assurance business is a drop of water in the ocean of global telecom.

But even though that drop of water looks tiny and lifeless in the palm of your hand, scan it under a microscope and you’d see thousands of plankton nervously swimming around in search of their next meal.

Yes, in a Darwinian world, stragglers go hungry.  Telecom execs are constantly looking over their shoulders at rival telecoms and OTTs eager to nibble away customers.  That’s why there can never be enough new networks, devices, services, promotions, and complex bundles to keep customers loyal — and create steady streams of new operational errors.

Then there’s a different form of competitor: the highly adaptive fraudster, parasites whose ability to steal should never be under-estimated.  So this is the challenging environment where RA/FM plays its key role as revenue stream watchdog.

Yet despite the importance of risk control, there’s also constant pressure to keep a lid on staffing costs.  That translates to the need for better training, greater automation, smarter systems, and innovation all around.

Enter Luke Taylor, owner of UK-based Lateral Alliances and independent consultant whose mission is to help RA/FM pros hurdle obstacles and seize opportunities.

Luke knows our domain very well.  As Chief Commercial Officer of Neural Tech for 12 years, he ran one of the top RA/FM firms.  That brought him face-to-face with hundreds of risk decision-makers from Dallas to Johannesburg.  Luke also has a knack for inventing programs like Risk Reward Awards that bring the assurance community together.

I recently had a rambling talk with Luke on the state of the risk assurance business.  Our discussion was loaded with his valuable advice and perspective.

AI / Machine Learning vs.  Human Analysis

Dan Baker, Editor, Black Swan Telecom Journal: Luke, machine learning and back-office automation is certainly the talk of the day in RA/FM.  How long do you think it will take for AI/Machine Learning to have a major impact?

Luke Taylor: I’d like to think our use of automation is making a difference, and I think the pandemic has allowed and will expedite certain transformational aspects to move forward, but having experienced some odd automation cases recently, it makes me wonder if we are there yet. . .

A few months back, my partner and I each received a letter from the same telecom service provider informing us that our existing tariff was being discontinued and suggested and referenced the exact same tariff plan to migrate to.  They offered it to me at $17/month and they offered the exact same plan to my partner for only $15!

I spoke to the Chief Commercial Officer of this telco who confirmed my belief that we were the targets of segmented marketing, and they have since adapted their approach to ensure that the scenario of segmenting two people from the same address does not occur.  But with all these clever analytics, this was a simple oversight that can have a detrimental effect. . .

Only last week I ordered (in the same order) two of the same item on Amazon, they were two sheets of plywood measuring approximately 90cm x 50cm x 5mm I received two boxes with one item in each from two different delivery drivers and in packaging that could frankly have contained a small house.  So this does not seem to be optimization and intelligence working at its max. . ?

I opened a savings account recently for my son, I had two streams of communications with an online bank, both contradicting each other in rules to follow for opening the account.  I responded to both requests and at one point had two accounts — and eventually no accounts as the communications crossed over. 

The bank lost me as a customer: I had no confidence they could look after my money if they could not open an account.

AI Robot looking at Blackboard

With all kinds of intelligence, analytics and automation, Dan, we need to walk before we run.  There are certain aspects of using advanced technology like AI, machine learning and robotics that can be great, but in more complex areas, it is very difficult.  Using AI and machine learning maybe an alternate, just as voice recognition in the call center may be useful.

But certain real-life decisions require intuition, context, a sense of history, and they also often need some business acumen, social understanding, or demographics knowledge.  And for those inputs, we will need humans.

If you look at very successful analytics today, they are always done with human input looking at the data in context.  What am I trying to achieve from analytics?  What insights am I trying to bring out?

There’s no automation of that deeper level yet.  Today’s analytical tools need to be guided by human experts, especially in the telco space where things are moving so fast.

The telecom service provider MTN successfully demonstrated how automation, analytics and advanced technologies can be used in certain areas of fraud and RA to improve efficiency, performance, etc.  It will only be time until the creases are ironed out and we will see automation being utilized to maximize its strengths.

As patron of the Risk Reward Awards, I have seen some interesting use cases and case studies using innovative technologies to solve problems.  The crucial thing is that technology should not be used for the sake of a marketing hype, but for real tangible business issues.  If that rule is followed, then adoption will surely come.

AI and ML absolutely must succeed as we move into 5G where the volumes, diversity and speed of data will require advanced technologies to work.  But just to put a reality check here, we are still under 60% global penetration of the internet, so 5G is not on everyone’s radar.

Generic Platforms vs.  Solving Customers' Key Issues

Luke, please draw on your experience as the previous CCO of Neural Tech.  While you were aiming your solutions in the same RA/FM marketplace, the way a UK-based firm would approach the market is quite different from, say, an India-based Subex.

Subex is not just a product-based software vendor: it also has the qualities of a systems integrator.  In fact, the solutions they build and maintain are often for large telcos like Verizon and BT.

Yes, if your development is happening in parts of the world where there are cheaper resources like India, Sri Lanka, or China, those firms can throw more resources at things, adapt on the fly and can afford to do more customization.  They can manage the overhead of maintaining these bespoke changes and adaptations.

Composite assurance system

But no matter where you operate or write code, having a huge product that’s too generic doesn’t work anymore.  And a big reason is the markets of the world are so different and need things quickly. 

You’ve got Latin America, North America, China, Europe, etc. and these regions are quite different in their customer expectations.  Telco are changing from the “inside — out” approach where they expect customers to purchase what they offer, to the ”outside — in” approach, where telcos offer what their customers actually want and demand.  Focused services and payment models that suit the customer.

On a simplistic level, North America is mostly postpaid phones as opposed to Kenya which is a majority prepaid and there are very different uses of the mobile phone.  SMS, WhatsApp, NFC and email may be strong in the U.S., but in other markets, voice calls are dominant because those cultures like verbalizing their communication. 

Mobile money may be prevalent based on the social-economic environment.  Generic platforms are viable, but bespoke solutions for specific problems are required to ensure adequate protection for the important revenue streams and maintain that critical factor: consumer confidence.

Now what contributed to the vendor gold rushes of the past is that the telco market itself was very lucrative.  Telco used to be a license to print money.  It was a kind of carnival thing: quadruple play, cable T.V., phones, internet, we’ve got it all.  And vendors could skim some of the cream the telcos were getting from their high margins.

Nowadays, the money no longer flows like it once did: the margins a telco makes from an individual consumer is a much less today, thanks to more competition. 

And telcos also noticed that many of their software investments turned into dead projects — projects that failed miserably because of the scenario mentioned before, of the “big bang” approach, or people on the project who moved on or the vendor got out of the business.  If you dig deep into any service provider there will be the skeletons and carcasses of projects that just never came to fruition or were never delivered.

As a result, when people buy a solution today, they tend to want a slick and streamlined product to solve a specific need.  Maybe a particular billing or RA issue is dogging them, and they say, “Please, Mr. Solution Provider, don’t come in and sell us a 2 million dollar revenue assurance product.  Our need is urgent for this one specific problem.  But yes, we are willing to buy a platform so we can plug things into and buy that going forward.”

So the platform is an ideal way of establishing a relationship between a vendor and operator.  The operator can keep coming back and operator can see a return for his investment.  I think the vendors have got to realize: telcos probably need a quicker return of investment and being more agile and fast in the way the delivery is made.

Why Telecom Needs Chief Data Officers

And speaking of data, I read the story on your website, The Chief Data Officer cometh, which argues it’s worth creating such a role.  Makes perfect sense.  In fact, as the role of CIO has evolved, that job is more about managing the utility and security aspect of computers and communications, and has very little interest in what the data’s purpose actually is.

Dan, Gartner predict that 90% of large organisations have a Chief Data Officer (CDO) in 2020.  I certainly think telcos need to move in that direction.  You can see retailers, banks, etc. recruiting and filling data officer, data director roles: data is everything and it makes senses to have some C-level oversight and responsibility for it.

In the U.K. you have got GDPR hitting the likes of Facebook and Google with big fines because something went missing or was inadvertently shared.  So there’s a big compliance side of data that needs to be managed.  Telecom regulators in the UK and elsewhere are — and will continue to — penalize telecom operators who do not have sufficient data governance.

Chief data officer in noc

But also importantly, are telcos maximizing the value of their data?  Now that could be in revenue assurance, in marketing, customer experience, business intelligence, security, you name it.  Look at the network of a telecom operator.  It’s rightly viewed as an asset that needs to be optimized to get the best performance out of.

Well, their Big Data asset is the same.  A lot of hard work went into building that capability up, but still, data is not being fully utilized or optimized at the moment.

So a Chief Data Officer (CDO) needs to take that forward.  Tough decisions need to be made, not to benefit the department who “owns” the data today, but where and how that data should be best managed to add value to the company. 

Only when there’s a powerful CDO who speaks for the interests of the larger company will people start moving or breaking down these silos and historic barriers.

The Power of a Modular Assurance & Analytics Platform

The whole model of building an application and training people in a GUI is going to be challenged in the years ahead.  And what about managed services?  Will it grow?

Yes, managed services will grow.  People don’t want to recruit lots of people to start a practice.  The recent pandemic situation has also forces corporations to reassess their business models.

Agility, a word I have used a few times here, is also a reason: you can ramp up and down resources when required.  They just want the service, saying: “You manage it, and I am going to penalize if you don’t manage it right.”  But software is very much alive if the vendor has a platform infrastructure.

The solution providers (the global ones at least) will use a platform across their whole business, so they can just plug things in.  You’ve got an API to bring data in and the modular product that sits in the platform does its job. 

What will be crucial and determine the successful business is having the correct skillsets.  Digitization has so many risks and challenges that having the correct mix of skilled resources will determine which companies can innovate new services and protect their revenues.

Actually, that’s the business model of Mobileum and WeDo.  They have a platform and they offer all of these modules that the customer can buy on top of it.

I think that’s the way to go.  I have discussions with operator executives all the time and they basically want two things: money and justification.  And spending hundreds of thousands on a solution is not happening — the issue is being able to justify spending that amount.

You need to go to management and say, “Look, this is what needs to be done to achieve X, Y, and Z.” And when everyone lays their cards out on the table like that, it benefits both sides. 

The vendors will get additional work because giving you the right tools means more useful work will come out of it in the future as the customer meets his business objectives.

This model ensures the service provider removes the risk in investing in software.  They can test the waters.  And pretty soon they will notice if it works because they can measure it and justify the purchase themselves.

Same goes for justifying more people: “We can recruit more people to accomplish X, Y, and Z.”  So this is definitely the way forward.  The same mindset can be used to justify managed services with lower operational costs and lower capex.

Mobileum’s Acquisition of SIGOS

In their recent buying of SIGOS, Mobileum has really broadened its offering in RA/FM.  SIGOS is the leader in SIM Box fraud detection, a market where Mobileum and WeDo didn’t have much presence before.  Mobileum also now has a fuller revenue assurance story by acquiring SIGOS’s testing business.  This is a smart move.

I agree Dan, Mobileum have been very intuitive and strategic in their acquisition strategy over the last few years.  As well as SIGOS and WeDo Technologies, we cannot forget the acquisition of Evolved Intelligence in 2018 that offer SS7 and Diameter signaling firewall solutions.

Sigos mobileum logos

This combination of companies provides a comprehensive risk management offering as telecoms step into the next phase of evolution with 5G and the new dynamic of IoT, when it comes to services and features that can utilize this technology.  I had the privilege of being on a call with the CEO, Bobby Srinivas, WeDo Technologies CEO Rui Paiva, and SIGOS CEO Adil Kaya — what a team!

You can sense they are motivated, passionate and driven to take the business forward and support their customer base.  Combining business, operations, cultures, etc. is always going to be a challenge when it comes to acquisitions, but I sensed from that call that people are coming together from across the business in different geographies — and that comradery was exciting to experience.

Innovation in the RA/FM Market

While we applaud Mobileum’s moves to integrate good solutions, I’m seeing plenty of innovation from other players, too:

  • Oculeus can stop IRSF and Wangiri fraud at the enterprise PBX and it offers that as a low cost service a telco can sell to an enterprise.  [Download a thorough discussion of this solution in a TRI white paper.] 
  • Subex may have lost the revenue assurance race to WeDo, but it has a strong and growing business assurance and security business. 

    It's also carved out a unique business, IDcentral, which helps telecoms leverage their vast identity data so that enterprises large and small can use that intelligence for consumer credit approval and many other things.  Look for a Black Swan story on this subject soon.
  • Lanck Telecom’s FMS is another product that’s got my attention.  A couple years back, people were talking about RA/FM solutions in the cloud.  But Lanck is showing how fraud control can be implemented as a real-time network service — something far more significant than a mere SaaS tool. 

    Plus the operator can customize the service and through routing decide exactly which streams of risky international traffic Lanck will fraud-filter for them on the way to call destination. [Download the detailed Solution Guide on the Lanck FMS.]

Yes, there are a number of players (old, young and new) that are innovating.  What is critical is that in an industry like telecoms where everything is fast paced and dynamic, the days of deploying comprehensive large all-encompassing risk management solutions is not practical.

Creative ideas

These initiatives from idea to fruition can take years, if you think of the motivation of the initiative, budgeting, procurement, tender, deployment, etc. by that time, whatever you were looking to protect with technology would have changed, evolved, and adapted. 

Solutions to specific business problems is the way to proceed.  It makes sense for everyone, vendors want satisfied customers, quicker revenue and telcos need to show tangible benefit and ROI.

The likes of Oculeus and Lanck are offering a solution to a specific problem, simplification in this complex industry is needed to ensure success.  Subex has recognized the move into what will be a fully digital world and made concerted efforts to expand their portfolio of offerings through innovation to offer intelligence and risk management to meet the needs of today and tomorrow, and we all know tomorrow comes around very quickly.

Copyright 2020 Black Swan Telecom Journal

Luke Taylor

Luke Taylor

Luke is a seasoned business executive with a deep knowledge of telecoms fraud management and business assurance from his 20 years in the industry working for a risk management software vendor.

He founded Lateral Alliances in 2017 to offer business management and consultancy services focused in the IT sector and specifically telecoms risk management.

Luke has also established his own not-for-profit awards body, Risk Reward Awards with the goal of recognizing the best work done by risk professionals in the telecoms sector.   Contact Luke via

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