Revenue Assurance
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Transcript of Revenue Assurance
REVENUE ASSURANCE
ANANDA
07020541001.
Revenue leakage is often considered a hidden and uncontrolled cost of doing business in the telecom
industry. In addition to fraud, reasons for revenue loss include network provisioning, mediation and
CDR errors, billing and interconnect inconsistencies, loss of data and corrupted files, fragmented
support systems, incoherent databases, and manual or ill defined business processes. According to
various Revenue Assurance (RA) research reports, the degree of exposure lies in the range of 3% to
15% of the Communications Service Providers’ (CSP) gross revenue depending on factors such as
networks and services type, geography, carrier type, and Revenue Assurance maturity level.
In the context of Revenue Assurance - the main question for any business is how much leakage is
acceptable and how to improve the operations and systems that will minimize those leakages. An
effective RA process must ensure the integrity and synchronization of both data and processes across
all the disparate systems and the network itself, in order to sustain operational and financial efficiency.
RA provides analysis of the relationship between network resources, services, customers, and
generated revenue, and enables the CSP not only to detect revenue leakage (e.g. un-billed customers,
mis-billed customers), stranded assets, and operational inefficiencies, but also to understand the
reasons for these undesired occurrences.
This Guidebook originates from TMF Revenue Assurance Technical Report 131, a technical report on
RA issued by TMF in 2004, and leads the reader through different facets of RA, collecting the
experiences of various professionals.
In its evolution from a technical report to a guidebook, the Guidebook aims at broadening the target
audience from the original group of RA technical practitioners to a broader set of business
stakeholders including other contributing, influencing or benefiting organizations in a CSP.
Additional topics have been investigated; others that were only outlined in TR131 have been further
expanded.
In particular, the Guidebook deals with the following topics, each one covered in a separate chapter:
SID and eTOM models’ support for RA, according to the recent proposal of TMF Modeling team to
integrate RA into the SID and eTOM
View at Regulatory Compliance through the prism of RA, addressing Sarbanes-Oxley (SOX) and
regulation in general.
Linkages between Fraud Management and RA, a section in which several options of how to
effectively address RA issues are recommended to CSPs.
RA for Content Services, giving recommendations and highlighting some of the new challenges
currently posed to CSPs by the delivery of new advanced content-based services.
Business Scenarios in which RA becomes significant, providing an insight of perceived root causes
and a classification of main areas affecting RA
In conclusion, a technical Appendix introduces the reader to the Telecom Fraud topic, ending with
taxonomy of possible frauds.
A background section follows, to briefly highlight some the key aspects of TMF TR131 which may
be considered a starting point for this work: Traditional RA approaches, drip tray model, RA maturity
model, and RA best practices.
Background
Revenue Assurance is a well-known challenge in the Telecommunications sector, mainly
rooted in the Telephony world as a set of techniques and methodologies to identify and fix revenue
leakages and/or prevent or detect errors resulting in unbilled or uncollected revenues of the CSP.
Today’s accelerated growth in the data, IP and real-time services market introduces additional
complexity and exposure for RA due to dynamically evolving technologies, continuous demand for
new services, more complex business processes, new value chains, additional external partnerships,
new business models and an every increasing and more complicated operational and business systems
infrastructure.
The above factors, coupled with the tumultuous economic climate that started with the slowdown in
2001 and the revitalization in 2004-5 and the current regulatory environment, provide evidence and
compelling need for RA in more and more CSPs. This need, in turn, together with the
acknowledgement of the strategic significance of RA for CSPs, resulted in the formation of
organizational units to ensure the accuracy of financial reporting and revenue recognition. Given
increased regulatory and competitive pressure and in order to remain competitive and profitable, CSPs
are continuingly restructuring their organizations according to new business targets and priorities.
These structural change and the response to market conditions suggest the benefits of the acceptance
of a holistic RA process to optimize the business process, the usage of existing assets, the data
integrity and as a result - maximizing revenues and in parallel - reducing costs and increase
profitability.
Up to 2004 no CSP emerged as credible industry leader, nor was a unique definition available to
comfortably align RA practitioners from different business domains. This situation may be understood
since RA evolved from several organizational units (Finance Control, Network Operations, Fraud
Management, Billing Operations, etc.) each of which has a different perspective, approach to RA and
own priorities.
Moreover, RA is an over-used buzzword. It often reflects the financial needs as well as objectives
related to a business problem. These needs and objectives tend to be defined differently by different
stakeholders, hence the confusion associated with the term of RA.
Dimensions to the RA problem
For the revenue stream in the usage-based billing environment (i.e. billing that is based upon data
volume, duration of sessions, etc.), a comprehensive analysis of the entire process from capturing and
recording a billable event through billing, cash collection, accounting and revenue recognition is
required. One example of an approach used by a CSP offering voice telephony services is to compare
the network’s CDRs (Call Detail Records) to SS#7 events to verify the proper ratio of CDRs to SS#7
events. An alternative technique uses test calls that are generated either manually or automatically, to
compare the generated CDRs to the record of the event from the subscriber’s perspective.
The subscription-based charging model (recurring or one-time fees) requires an inspection of the data
pertaining to the servicing network elements and comparing it to the subscriber’s billing data.
However, order management, asset/inventory management and provisioning systems should also be
part of this assessment because data discrepancies may result in the billing process not being aligned
with the number of orders, order details or services actually provisioned within the network.
Additionally, stranded assets in the network inventory (assets shown in use by the operational support
systems but no service actually utilizing the asset) can result with excessive CapEx due to
discrepancies in network capacity and orders or allocated resources.
For event-based charges (SMS, MMS, etc.) the tariff structure could be regarded as even simpler and
requiring only reconciliation. Some providers tend to tie such charges to those of content delivery
service (video, music, etc.), which include quality of service related attributes; this requires much
stricter controls to be performed.
There are other dimensions to the problem such as pre-paid and post-paid issues, wholesale and retail
differences, and so on. Each one requires particular care and may even require a distinct approach,
since the type of service or targeted customer segment influences choice of methods and priorities for
the CSP’s RA program.
Economical Perspective
Assessing costs and benefits is a required first step prior to introducing new often-complex projects
within a business. This is also the case for an RA initiative. To address this issue, TR131 includes a
detailed discussion of the outcomes of a real life example of a cost-benefit analysis performed by an
operator.
The analysis uses a drip tray model; a common metaphor used in describing the affect of errors in
processing charges, a term commonly referred to as “leakage”. The metaphor is appropriate as the
loss of water from a pipe exhibits similar properties to the loss or corruption of data as it is processed
from one system to the next.
The amount of water lost by the pipe could be measured by comparing the amount that goes into one
end of the pipe against the amount that comes out of the other end of it. Though simplistic, the
comparison of ins and outs lies at the heart of activities intended to monitor, diagnose, prevent and
measure the extent of error.
Some drip trays will lead to the capture of errors, some will lead to their capture and resolution.
Capturing errors without resolution means that errors are measured but still take place. Capturing and
In Out
error not captured
error captured not resolved
error captured and resolved
resolving errors means measurement of errors that would have gone unresolved without the drip tray.
A drip tray that captures errors without leading to resolution has a cost, but no clear attributable
economic benefit.
The analysis indicates the benefits of an effective and on-going RA strategy greatly outweigh the costs
associated with the project and the operation.
Reactive, Active, and Proactive RA
Using the following definitions for different styles of revenue assurance initiatives
Reactive – doing something as a response to existing leakages, for example a project to identify and
resolve the causes of actual revenue loss;
Active – doing something to address problems as they occur, for example by monitoring of problems
in real-time. This approach is designed to initiate corrective responses prior to any revenue loss takes
place;
Proactive - acting in anticipation, by implementing controls and other measures to prevent problems
from occurring
In general, the reduction in time required to respond to a problem is the basis for the shift from
reactive to active RA. The goal is to anticipate what can go wrong and prevent it. This “pre-emptive”
approach is the basis for proactive RA.
The Reactive, Active and Proactive approaches to RA are complementary approaches. A good RA
practice must always include Reactive controls, to identify leakages and create the case for the Active
and Proactive controls. Active controls are required to discover problems in near-real time, and to
correct their outcomes before they cause a real damage. Proactive controls are the ultimate goal. These
controls help preventing the problems from occurring in advance and normally do so by being
addressed in the design and deployment phases. That said, it is a bad practice to rely only on
Proactive controls since, as a result of the significant complexity of the operations and business
systems and processes of a CSP, some problems may not be able to be detected proactively
Data Quality & Data Integrity vs. Process Improvement
An approach pursuing Data Quality & Data Integrity focuses on improving the quality of data to
ensure accuracy of revenue. This normally involves the extraction of data, from one or a number of
systems and/or the consistency validation of the data when moving from network to billing.
Process Improvement is normally undertaken by a review of the business processes supporting the
generation and management of revenue generating events (e.g., Order to Cash processes). The aim is
to ensure that processes are designed properly and performed as expected.
In this type of audit style approach, RA tends to identify where potential areas of risk exposure might
exist: within system functionality, handoff between systems, as well as supporting business processes
and interaction between the processes and systems.
Both approaches are complementary and we recommend combining them. There are RA problems
that will be detected only by one of the previously mentioned techniques. For example, an automated
provisioning process that generates many errors and needs human intervention, may end with
successful provisioning and complete data integrity, but cause revenue leakages (the customer will
start to use the product later) and subsequently increase the CSP’s costs (the cost of the human
intervention). This problem will be detected only by using Process Improvement techniques and not
by Data Integrity techniques.
Best Practices
Best practices have been constituted to ensure that comprehensive strategies include network element
configuration data, OSS service activation data, usage data, mediation rules, and customer account
data from order entry, billing and CRM.
Best practice in RA represents a dynamic striving for optimization rather than the static delivery of a
particular series of methods, controls and tools. RA best practice itself shall be subject to perpetual
review and shall not be considered as a static process.
For an RA strategy to be considered effective it is mandatory to include all of the following
components: technology, people and processes.
Technology component includes identifying data discrepancies and prioritizing the correction efforts,
which is a daunting task, and needs the support of software to be carried out. eTOM and SID, to some
degree inherently provide for improved benefits of technology integration that reduce some, but not
all of the potential fallout associated with technology components that do not interface without a
global standards adoption.
People component includes the necessary quick investigation of suspicious data by RA analysts and
subject matter experts, intended to determine the validity of threshold violations when abnormalities
occur.
Process component refers to the solid understanding of the complex interdependencies among
network infrastructure, B/OSS environment and business processes in CSP’s operations that the
expert should have. eTOM Layer 0 – 2 processes establish some of the interdependencies and
cooperation across business units, departmental approaches and various company objectives.
RA systems should be designed to support data acquisition from network elements, provisioning
systems, mediation platforms, billing systems, order management systems, asset management
systems, intercarrier exchanges, partner relationship management, etc., according to the specific
business scenario. Beyond data access capabilities, RA systems should also implement key functional
features to perform appropriate detection techniques (monitoring, reconciling, correlation and so on)
and include reporting tools such as dashboards, tracking and correction panels, case management
tools and enterprise controls visibility across all business functions, especially given the new financial
regulatory environment such as Sarbanes-Oxley.
RA Maturity Model
TMF Revenue Assurance Technical Report 131 (TR131) also sets forth five successive stages that
characterize the RA level of maturity within a CSP. Not only does this scale give CSPs a benchmark
to measure their progress against other CSPs, but it also lays out a road map for other RA operations.
Five steps of maturity have been identified, with the fifth step an ideal to be reached.
Initial, when no RA process has been established and only arbitrary ad hoc reactions to circumstances;
Repeatable, when RA processes are developed at the level of individual projects, products and
implementations. Flaws are identified and remedial action is taken. Defined, when RA processes are
developed for the whole organization. Organizational priorities for revenue assurance are understood
and guide proactive deployment of resources. Managed, when RA processes provide consistent
quantitative measures. Measures drive planning and control. Optimized, when the measures, planning
and controls implemented in order to improve the business themselves become the subject of
continual improvement.
Revenue Assurance is not yet part of the NGOSS eTOM (enhanced Telecom Operations Map) and
SID (Shared Information and Data) paradigms. The TeleManagement Forum’s Revenue Assurance
modeling team submitted a proposal about the integration of RA with the SID and eTOM. This
proposal is under review, and our expectation is that it will be accepted with minor changes in the next
few months. In this document, we present the highlights of the proposition.
The eTOM Business Process Framework serves as the blueprint for process direction and the starting
point for development and integration of Business and Operations Support Systems (BSS and OSS
respectively). The SID, as the NGOSS information model, provides an information/data reference
model and a common information/data vocabulary from a business as well as a systems
perspective. Using the SID in combination with the eTOM business process and activity descriptions,
it becomes possible to create a bridge between the business and Information Technology groups
within an organization, providing definitions that are understandable by the business, but are also
rigorous enough to be used for software development. The integration of RA into the eTOM and SID
will greatly impact the standardization of RA, permitting service providers, system integrators, and
Continuous improvement via feedback. Decentralized ownership, central control.
Leakage quantitatively understood and controlled.
Standardized approach developed. Designing-in control commences.
Basic project/process management. Repeatable tasks.
Ad-hoc, chaotic. Dependant on individual heroics.
vendors, to implement RA in a canonical way, reducing costs, and ensuring interoperability between
systems and processes.
For the sake of the RA practitioners who may not be familiar with the NGOSS, eTOM and SID
framework, we first provide a short introduction to NGOSS, eTOM and SID.
NGOSS
The NGOSS Model
NGOSS is a comprehensive, integrated framework for developing, procuring and deploying
operational and business support systems and software.
NGOSS is the TeleManagement Forum initiative to drive efficiency in and cost out of the operation of
telecom networks. NGOSS enables service providers to change the way they think about their
business and operations.
NGOSS is a comprehensive, integrated framework for developing, procuring and deploying
operational and business support systems and software. It is available as a toolkit of industry-agreed
specifications and guidelines that cover key business and technical areas.
Through an integrated system of business and technical elements, NGOSS allows OSS/BSS systems
to become as interoperable as they have been never before.
NGOSS positions Service Providers with a repeatable process for automation of complex operational
tasks and positions vendors with the most effective open interfaces in the industry today.
Business Process Automation delivered in the enhanced Telecom Operations Map (eTOM™)
Systems Analysis & Design delivered in the Shared Information/Data Model (SID)
Solution Design & Integration delivered in the Contract Interface and Technology Neutral
Architecture (TNA)
Conformance Testing delivered in the NGOSS Compliance Tests
Procurement & Implementation delivered in ROI Model, RFI Template, and Implementation Guide
documents
The eTOM
The Enhanced Telecom Operations Map® (eTOM) is the ongoing TM Forum initiative to deliver a
business process model or framework for use by service providers and others within the
telecommunications industry. The TM Forum eTOM describes all the enterprise processes required
by a service provider and analyzes them to different levels of detail according to their significance and
priority for the business. For companies adopting eTOM, it serves as the blueprint for process
direction and provides a neutral reference point for internal process reengineering needs, partnerships,
alliances, and general working agreements with other providers. For suppliers, eTOM outlines
potential boundaries of software components to align with the customers' needs and highlights the
required functions, inputs, and outputs that must be supported by products.
SID
The SID, as the NGOSS information model, provides an information/data reference model and a
common information/data vocabulary from a business as well as a systems perspective. The SID uses
UML to formalize the expression of the needs of a particular view.
The SID provides the common language for communicating the concerns of the four major groups of
constituents represented by the four NGOSS Views: Business, System, Implementation and
Deployment, defined in the NGOSS Lifecycle. Used in combination with the eTOM business process
and activity descriptions, SID makes it possible to create a bridge between the business and
Information Technology groups within an organization, providing definitions that are understandable
by the business, but are also rigorous enough to be used for software development.
In order to integrate Revenue Assurance into the NGOSS framework, and to gain all the benefits of
this framework, RA must be integrated at least into the Enhanced Telecom Operations Map®
(eTOM), which defines the business processes in the telecommunications industry, and into the
Shared Information/Data Model (SID). The integration of RA into the eTOM permits
telecommunications operators to have a better understanding of the function of RA at the operational
level and to comprehend the interactions between RA and other processes. The integration into the
SID allows identifying the common data/information model that should be followed by RA solutions,
permitting structured and easy integration between RA solutions, and between RA solutions and other
entities in the telecommunications operational map
The proposal
The TMF RA modeling team made a detailed proposal of integration of RA into the SID and eTOM.
Below is a high-level description of this proposal. The reader should keep in mind that this description
is neither detailed nor exhaustive, and that exactitude was sacrificed for simplicity.
We identified 7 RA Aggregate Business Entities (ABEs) that should be incorporated into the SID
Revenue Assurance controls,
Revenue Assurance violations,
Revenue Assurance key performance indicators (KPIs),
Revenue Assurance objectives
Revenue Assurance rules that map revenue assurance KPIs and threshold violations to revenue
assurance trouble tickets.
Revenue Assurance actions/responses
Revenue Assurance assessments
Figure RA.4 depicts the Revenue Assurance Aggregate Business Entities (ABEs) within the SID
Framework.
Enterprise (Under Construction)
Revenue Assurance
RA Control
RA Violation
RA Trouble Ticket
RA Action_Response RA KPI
RA Assessment
Enterprise
Revenue Assurance
RA Control
RA Violation
RA Trouble Ticket
RA Action_Response RA KPI
RA Assessment
RA Objective
Revenue Assurance ABEs
The Revenue Assurance Control ABE defines policy-based rules that represent the logical definition
of comparisons performed on entities to identify Revenue Assurance Violations. For example a
Revenue Assurance Control may compare pre mediation and post mediation call details records
(CDRs) to identify improperly dropped CDRs, i.e. Revenue Assurance Violations
Revenue Assurance KPIs are defined on Revenue Assurance Violations and on other revenue
assurance related entities, such as bills and CDRs. For example a RA KPI may count the number of
Revenue Assurance Violations found by the Revenue Assurance Control that compared the pre and
post mediation CDRs.
Revenue Assurance Objectives are targets whose infringement may trigger the creation of Revenue
Assurance Trouble Tickets. Examples of Revenue Assurance Objective are that the value of the
Revenue Assurance KPI that counted the number of dropped CDRs is lower than 50,000, or that the
trend of this value over a period of time is negative (the number of violations is dropping). When one
or several Revenue Assurance Objectives are violated, a Revenue Assurance Trouble Tickets may be
issued. For example if the number of dropped CDRs is higher than 50,000 a Revenue Assurance
Trouble Ticket may be issued and assigned to someone, to check the cause of the problem, and to try
to recycle the dropped CDRs. Revenue Assurance Trouble Tickets may be created as a result of the
infringement of one or more Revenue Assurance Objectives, or as a result of the finding one or more
Revenue Assurance Violations.
Revenue Assurance actions/responses reconcile revenue assurance trouble tickets, and Revenue
Assurance Violations and may bring the Revenue Assurance Trouble Tickets to closure by initiating
and performing a series of one or more activities. These activities may include corrective activities,
e.g., correcting and recycling the dropped CDRs, and other activities such as sending reports to all the
people that should be aware of the violation of the objective, e.g., sending a report to the CFO if more
than 50,000 dropped CDRs were found. Revenue Assurance Action/Response ABE entities also may
consist in root cause analysis.
Revenue Assurance Assessment ABE entities measure the effectiveness of Revenue Assurance
Controls, Revenue Assurance Objectives, and Revenue Assurance KPIs. Revenue Assurance
Assessment ABE entities include recommendations of refining controls, objectives, and KPIs.
The RA ABEs proposed are based on existing SID ABEs, for example the Revenue Assurance
Trouble Tickets is defined using the already existing SID ABE of TroubleTicket, and the Revenue
Assurance actions/responses is defined using the already existing SID ABE of Activity.
Revenue Assurance (RA) business entities support the complete RA lifecycle. These processes range
from creating RA controls, KPIs and RA objectives, identifying RA violations and trouble tickets,
resolving trouble tickets to assessing an enterprise’s RA program. RA eTOM processes are shown in
Figure RA.5.
RA eTOM processes