Revenue Assurance

PITA AGM 2016Tahiti

Workshop SessionApril 29th, 2016

Tobias SkogHead Revenue Assurance

Parcus Group

Agenda

1. Background2. What is Revenue Assurance (RA)?3. Methodology4. Organizational Considerations5. Scope & Domain6. Detection / Correction7. Prevention8. The biggest risks?9. Things to consider10. Conclusions11. Fraud / AbuseCase studies:

a: Interconnect – “insider job”b: Margin leakage in bilateral voice

Background

• Increasingly competitive environment• Shrinking margins• Cost cutting• Growing complexity – systems – products – partnerships – M&A • High volume – low value transactions => “small errors” have big financial implications

What is Revenue Assurance (RA)

“Recovery of lost revenues or costs”

“Revenue Assurance” is a practical response to perceived or actual issues with operational under performance”

“A means to identify, remedy, and prevent, problems that result in financial under performance without seeking to generate additional sales”

“All products & services delivered as expected; all products & services correctly and completely charged, including expected margin, in a timely manner”

Methodology

Detection

Correction

Prevention

Fig 1; AssuringBusiness’ RA maturity model

“Organizational issues” can have a large impact on especially the long term effectiveness of the RA activities

Organizational Considerations

Origination:Commercial functions / Business units - aiming at improving financial performance

Nature:Financial control, Audit and Reporting

Domain:Technology, BSS / OSS

Cross organizational activity requiring broad and specialized competencies

Scope & Domain

Revenueor – Revenue & Cost?Margin & Pricing?

What about riskand fraud?

Opportunity loss? Customer experience?

In order to ensure that the RA activities can be measured and targeted effectively the scope in terms of objective (what to look for) and domain (where) must be defined.

REV

MARG &

PRICE

RISK

OPPORTUNITY

LOSS

COST

FRAUD

CUST EXPERIENCE

Detection / Correction

DetectionMonitor, compare and audit data in order to identify errorsPassive:• Absolute & Relative comparisons• Benchmarks• Aggregate samples• Trends• Algorithms

Active:• Test Event Generation and Interception

Forensic RA – finding the root cause to known or unknown RA issues

Correction• Addressing RA issues identified by the detection activities

Prevention

PreventionImplementing measures that minimise the risk of anomalies• Synchronisation of data and systems• Data Integrity enhancing measures• Pre-process checks• Post-process checks• Ensuring RA is included in Product Development / Pricing process

The biggest risks?

CHANGESPricesProducts and ServicesTechnologyProcesses

Systems very rarely make mistakes

Humans do

Things to consider

Scope & DomainBalance between Detection & PreventionCost – benefit ratioOrganizationCompetence / ResourcingInternal / ExternalManual / Automated Indirect costs of rectifying RA issues

Conclusions

A balanced and deliberate approach to Revenue Assurance, embedding the activities into the operational activities of the organization, is an effective tool to drive profitability and to minimize risk.

What is Fraud?

Wikipedia:In law, fraud is deliberate deception to secure unfair or unlawful gain.The purpose of fraud may be monetary gain or other benefits.

What is Fraud?

• Civil fraudi.e., a fraud victim may sue the fraud perpetrator“breach of contract”

• Criminal fraudi.e., a fraud perpetrator may be prosecuted and imprisoned by governmental authorities“breaking the law”

How it is done

• OriginationSubscription fraudSIM theftSIM cloning

• TrafficArtificial Inflation of Traffic (e.g.. via call generators)Fake voice mail or IVR etc.

• Destination / TerminationNumber hijackingTraffic short-stopping / FASManipulation of B-numbers (double country codes)

SMS /call spammingRoaming fraudPBX hacking

Fraud-like scenarios

• Abuse of price plans• Customer insolvency / non-intention to pay• Call re-selling

Interconnection Fraud / Risk

Abuse of National & International MTR’sRe-origination of trafficManipulation of A-numbers

SIM boxesLeaky PBX“Insider jobs”IP spoofingNetwork hacking

Case study – Premium / Fraud traffic

Acquisition of number range• legitimate• Hi-jackFind a distributor• Someone that has traffic to the number range used• Blend with large volume of ”normal traffic”Create / buy content• Fake ring signal / Fake Voice mail / IVRGenerate traffic• Normal traffic / abuse price plans

What about you?

Are you exposed to Fraud?Have you considered buying ”grey routes”?

Case studies

Interconnect – “insider job”

Margin leakage – bilateral voice

Thank You

For more information contact:

Parcus GroupTobias Skogts@parcusgroup.com+61 468 767 760

www.parcusgroup.com