Revenue Optimization – High Value, Hard Revenue, “Superstar” RA

Every once in a while, I hear someone in Revenue Assurance talk about how they worry they are doing the Revenue Assurance job so well, they are “working themselves out of a job.” While I understand why they might think that way (and I talk about it more in a previous post), I completely disagree with anyone who says that.

I am convinced Revenue Assurance will never work itself out of a job, just because the better you get at doing Revenue Assurance, the more things you realize you can do to deliver value. And that’s exactly what GRAPA members all around the world are telling us with Revenue Optimization.

Successful Revenue Assurance Always Expands Scope, Lowers Costs

When these Revenue Assurance professionals are successful and good at what they do, management always seems to find other problem areas where they need help, at the same time realizing that Revenue Assurance has exactly the skills needed to help. The good news is that with these new responsibilities usually come with more budget and more headcount for your department.

I want to pause here to say though, that just because management gives you more budget and headcount, doesn’t mean you should be doing/spending more to assure areas that are already well controlled. If, based on management’s appetite for risk, certain areas like billing, mediation, etc. already have a reasonable level of controls, there’s no reason to do more.

Especially if there’s not a compelling business case, those resources should be used in areas where there will be a large and clear return on investment, and that’s what Revenue Optimization is all about.

Do CFOs Want More Cost? Or More Investment? Moving to High Margin/High Cost Areas

In fact, if certain areas are well controlled, and controls have been institutionalized, there are usually cost savings to be had, rather than need for more budget. Because when it comes down to it, your CFO doesn’t want you to bring him/her more cost or expense for something that’s supposed to be under control.

On the other hand, CFOs are always willing to invest in things that deliver more value and more hard revenue.

The business case for Revenue Optimization is clearest in two main areas – optimization of high margin Lines of Business (LOB) and optimization of margins on assets. When it comes to Lines of Business, we’re talking about interconnect, roaming, content etc. When it comes to assets, it could be anything from BTS/BSC, softswitches to FTTH/FTTN.

When it comes to optimizing these areas, the value and benefit doesn’t just come from the fact that these are high cost, high margin areas. Especially when telcos are subsidizing or taking lower margins on other aspects of their business (on-net calls, cheap/free customer equipment, bundle discounts, etc.) these high margin LOB become all the more important.

These Areas Are Important/Valuable, But Also Difficult/Complex

But the reason Revenue Assurance gets involved isn’t just because there’s value to be had and a clear business case for action, it’s also because these are complex, difficult to understand areas often lacking transparency, clear control points or standardized approaches and controls.

Often times, people know these areas have problems, but they don’t even know where or how to start looking for issues, much less how to solve them. Is it just me, or does that sound like a challenge Revenue Assurance was designed to tackle? And the kind of problems we tackle all the time?

This mixture of high value/high returns, along with complexity and lack of transparency, doesn’t just exist in these high margin LOBs – it’s often as big a problem with optimizing the utilization of network assets.

Asset Margins on New, Expensive, High Volume Assets

This is especially true when it comes to relatively high volume assets (where there are many of each item on a network) such as BTS/BSC, softswitches, FTTH/FTTN. With these assets, deployment/maintenance is expensive, and it can become very difficult and complicated to determine the margins/revenue generated by each individual component.

It often doesn’t help that many of these components tend to be new, and telcos have to make decisions on whether or not to deploy them before the technology or market is even stable or established.

Yet if the telco is going to ensure it is making the most of its assets and not over-spending in areas that are not justified, these determinations have to be made, not least if the telco is going to implement innovative billing/charging models such as BTS Billing that can provide a market advantage while maximizing asset utilization.

Revenue Assurance Professionals = Telecom Superheroes

I will bet you anything, if you tried to explain all this to anyone else in the telco other than Revenue Assurance, they would just curl up into a ball and cry because of how complex and difficult this kind of forensics/analysis is. Yet Revenue Assurance professionals all over the world are doing these things every day.

I don’t know if it makes you feel good about yourself – I know it makes me feel good about myself – knowing there are these problems in the telco that are so important and valuable, yet often only Revenue Assurance has the skills to solve.

Anyone who understands this is never going to imagine they would ever “work themselves out of a job.”

And that’s why I LOVE Revenue Assurance.