Revenue Assurance: Where Do We Go from Here?

The more things change, the more they remain the same.  That is an old saying that keeps proving itself to be true, and nowhere do we see more change than in the telecoms and revenue assurance (RA) area.

Since GRAPA’s founding in 2007 there have been several major revolutions in the practice of revenue assurance.  Across the globe, we have seen RA move up in status and importance in many organizations.  We have seen revenue assurance teams grow quite rapidly in most telcos.  Likewise, we have seen the role of RA expand to include dozens of new domains as CFO’s and CEO’s have come to appreciate the real value that revenue assurance can deliver to the bottom and top line of the company’s financial statements.

We have even seen the revenue assurance professional move up to an almost C-level type standing in some of the more progressive and innovative telecoms.  So, as the president of GRAPA, I have to ask myself a very serious question.  Where do we go from here?  How can we, at GRAPA continue to support the growth and increase in status of the RA professional, and how can we get even more creative in figuring out ways to help expand the reach of revenue assurance, as well as the effect?

I cannot tell you the complete answer to this question, because I just do not know.  But I do know that we are redoubling our efforts in several areas.  There seems to be a pattern emerging that we are going to try to develop, and that is in the area of specializations.

Clearly revenue assurance has greatly increased in scope over the past few years.  RA professionals are working less on “leakage” and more on “top line revenue delivery” as we get better at the fundamentals of our craft.  Unmistakably, the skills and knowledge developed while securing revenue streams is not the end of the value delivered, but only the beginning.  By leveraging good core understanding of telco technologies, operations and revenue management activities, RA professionals are expanding and applying their knowledge in a myriad of other arenas.

What is beginning to emerge, I suspect, is a number of different specialized revenue assurance clusters which fall under the general heading of Revenue Assurance.  Some of the specializations include the following:

1	Margin Assurance

Of interest most often to CFO’s, controllers and heads of operational units or lines of business.  Margin Assurance (or Revenue Optimization) focuses on ways to take an existing line of business, product line or revenue producing assets like Switches and BTS’s and increase their profitability by changing the way they are managed or offered to customers.  We have seen a large surge of interest in these areas in recent months, and an entire “sub category” of specialized terminology, tools and approaches are being developed to make it easier, faster and more dependable as an approach.

2	Market Assurance

While everyone will tell you that marketing is all about increasing revenues, the reality is the revenues they focus on tend to be only those measured in the short term, and under the most strained of interpretation.  The dream of almost every CFO/CEO team is to find a way to impose clear financial controls on the marketing process without stifling their creativity and effectiveness.  The Market Assurance (or Revenue Driven Marketing) methodology that is emerging offers much promise to financial managers.  By combining the revenue assurance principles of rationalization and integrity to the marketing process, and by supporting it with a new “revenue based control and alarm” structure, many CFO’s and marketing teams are exploring these new wrinkles in the practice of RA.

3	Revenue Management

While managers around the world appreciate the results RA professionals have have delivered to their organizations, many realize that what is really needed is to clean up and fix the revenue streams themselves, ending the need for a revenue assurance function in many areas.  While the wholesale application of Revenue Management (or Integrated Revenue Stream Management) disciplines often meets with unanticipated problems and flaws, implementing revenue management strategically can greatly decrease the cost of managing revenues while containing risks at the same time.  We see an emerging group of revenue management specialists working with the results of revenue assurance analysis, then turning those results into effective and well-run revenue streams.

4	Traditional Revenue Assurance

While the new and exciting “spin offs” of the core revenue assurance function will no doubt continue to expand, the same tried and true core Revenue Assurance (or functions that Identify, Quantify, Report and Address the Risk to Revenue) will continue to play a key role in telecoms.  In particular, deploying teams of experts who can analyze, diagnose, recommend and operationalize corrections and controls across the full range of telco revenue operations is a skillset with a great future.

5	Revenue Engineering

The most advanced, and most powerful of the new RA disciplines is revenue engineering.  Revenue Engineering applies the principles of revenue assurance (margin optimization, market assurance, revenue management, and traditional RA) to new product development, new service line development and the assurance of new technologies brought into the telco.  Here, innovative companies are finding revenue assurance principles can do much more than simply “protect revenue streams”.  With revenue engineering, RA principles can actually drive the entire value creation process -- the real heart of the telco innovation engine.

6	Revenue Governance

What is also badly needed, and quickly emerging, is a framework for the governance of these various functions within the tactical, operational environment of the telco.  Revenue Governance (or a Unified Framework for the Management of Revenue Related Functions) prescribes techniques and guidelines for assigning responsibility for the different risk and issues facing telecoms revenue management.  And that includes things like coordinating and setting operational boundaries between internal audit, revenue assurance, fraud management, security, revenue engineering, revenue optimization and revenue management.  The upcoming revenue governance framework will simplify and organize the telcos‘ management of this entire operational space.

Over the next few months, I hope to see the GRAPA organization further develop and enrich these areas, and provide its members with options for training and certification in one, or all of them.

This article first appeared in GRAPA’s Mattison Avenue blog.