For a decade or so Revenue Assurance (RA) was viewed as an important but boring part of the audit process. Basically, it checked whether you were billing accurately and collecting everything you could collect. At the recent ETIS Billing Working Group meeting in Krackow – hosted by Comarch – I was persuaded that RA is much more. For a start, I realized that it can support customer loyalty programmes and for a second, it should be an integral part of a major transformation programme.
There are probably RA programmes running in every significant service provider on earth. If there are not, there should be. In some countries regulation will force operators to establish some form of process to monitor and impose correctness of bills on operators. Outside defined margins of error, fines will be imposed. This is not a bad thing. The UK for example had one of the first and most stringent sets of regulations. As a result, one manager, who was head of RA for a global operator, put it, “I spend very little time focusing on RA in the UK. The regulations basically gave me the metrics I needed to build the process.” That is fine but was RA ever linked to customer satisfaction? Probably not.
Given that billing errors are a way of life, and identifying and fixing problems is the norm, change the viewpoint slightly and you have unexpected outcomes. As one Head of Billing at a large telco put it, “RA helps you look at a complex IT landscape in a financial way and identify the pain points. IT does not have a focus on the revenue at risk.” So that immediately adds an extra dimension to the role of RA. It also backs up the thesis that IT people will re-rate bills because they can, whereas financial and customer facing people will do almost anything to phase out re-rating.
While you are examining how to improve the billing process from the data produced and now you have a host of data to examine, you can put it to work. He also presented a grid where one axis represented the length of time an error had gone undetected and the other the amount of the error (in monetary terms). Given this grid, they worked out a plan to communicate this with the customers, which they were obliged to do anyway by the Regulator. What they found – particularly with the larger errors, for which they called the customers – was that a) the customer was nicely surprised that their operator was calling them to admit to making an error, b) happy that they were being offered some compensation, even though they would have to pay the outstanding amount and most beneficially c) they had an opportunity to discuss their service and in many cases purchased new products or services as a result. Bottom line, customers were happier, churn was reduced, and the customer became more profitable.
The conclusion is that not only should RA evolve into a pro-active as well as reactive process but should support customer satisfaction, financial and marketing initiatives.
In the real time world that is now overlaying the old monthly billing processes, real time thinking will start to work its way through an organization. Processes that help underpin this will be the tools that help the current objectives of agility, cost control and superior customer experiences. That very much includes RA.
Hear, hear!
Alex, I completely agree with you, RA can, should, and in many places already gives many benefits beyond the “standard” RA direct finical benefits. Benefits such as increasing customer satisfaction or marketing analytics support. In many cases these “extra” benefits can be obtained as a side effect with relative low “additional” investment. It is extremely important to Operators, RA departments, as well as to vendors, to maximize the benefits from RA activities, I strongly support this, yet at the same time it is important to always remember that the bread and butter of RA is to prevent and detect leakages, this activity should never be neglected by RA departments.