Recently I was talking to someone who has a long history in manufacturing, and I was trying to describe to him what Revenue Assurance was all about. Once I described the job to him, as well as the problems and issues associated with it, the first thing he said was – that sounds a lot like quality assurance in manufacturing.
And the more I listened to him talk about the problems quality assurance departments used to face in manufacturing, the more I heard the same problems Revenue Assurance departments tend to face today in the telco.
The best example of this is where even now in some telcos, Revenue Assurance teams tend not to get credit when things go well in the operational departments they support (billing, mediation, interconnect, network). And yet whenever there’s revenue loss or fraud found in those departments, Revenue Assurance teams are the ones held responsible.
And the more my friend talked, the more I realized how much Revenue Assurance teams can learn from the lessons of quality assurance to solve problems like these.
What this person was saying is that in the past, when manufacturers found problems with the quality of their products, they would blame the quality assurance team. After all, their department name was quality assurance, so if quality was not being assured, it must mean they’re not doing their job. Sound familiar?
But very quickly they found that blaming the quality assurance team didn’t do anyone any good, except make the quality assurance team miserable. Quality was still not improving.
The real problem was because while quality assurance was being held responsible for quality, they were not able to hold other operational teams responsible for decisions those teams made that might affect quality. One example is where because procurement was buying sub-standard parts, there was almost no way the finished product was going to be good quality.
But procurement wasn’t going to volunteer that fact to quality assurance, because they didn’t care. And the reason they didn’t care was because they weren’t being held responsible for buying sub-standard parts – quality assurance was. In fact procurement was being rewarded for cutting costs, even though it meant an inferior product that could not be sold.
So even if, after a great deal of forensic work, quality assurance found out the problem was in procurement, they couldn’t really do anything about it. They were not in charge of procurement and couldn’t tell them what to do.
They only thing they could do was complain to management, and get procurement in trouble. But that meant that in the future, procurement would be even less cooperative and more secretive about any mistakes they made or problems they caused.
So really, quality assurance was being held responsible for something they could not possibly be held responsible for – because they were not the ones actually, operationally, responsible.
In many ways, that is a problem Telco Revenue Assurance departments can tend to face today. Often times Revenue Assurance is not operationally responsible for billing or mediation or interconnect or network. Despite that, they are the ones blamed for problems caused by those departments, just because the problem has to do with revenue and revenue loss.
In this situation, the solution can seem very simple – just make Revenue Assurance responsible for all those departments, and have all those departments report to Revenue Assurance. And if that sounds crazy and unlikely to you, it shouldn’t, because that’s what used to happen in the telco.
In the past, billing used to report to someone called the Billing Operations Manager, or BOM, who was responsible for the integrity of the revenue streams. But I’m going to talk more about this in another blog post, because that’s almost exactly what Revenue Management is all about. Right now I'm going to focus on Revenue Assurance.
The solution that manufacturing companies decided to use was a different approach – they did not make everyone who could affect quality report to quality assurance. Instead what they did was “make quality EVERYONE’s responsibility” – this meant that if you made a decision that affected quality, you were the one held responsible for it.
Quality assurance could help you find those problems and help you fix them, but in the end if anything went wrong, it was the fault of the operational department (e.g: procurement, in the example above).
And from what my friend told me, this is how quality assurance is still used in manufacturing, and it has been incredibly effective. So much so that no one even questions any more if operational departments have the responsibility – of course they do, they are the ones who need to be held accountable for the decisions they make.
So while I don’t think the comparison is perfect between manufacturing and the telco, between quality and revenue, and I don’t think “making revenue everyone’s responsibility” is the only solution to this problem, I think there is a great deal that Revenue Assurance departments can learn from this example, and more generally from other industries.
While telcos are unique organizations, that does not mean they have to re-invent the wheel in everything they do – we don’t have to make all these mistakes ourselves in order for us to learn from them. Other people have made mistakes in the past, and we should learn from them. Especially if we work in Revenue Assurance.
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