5 Questions to consider before starting RA activities

In my last post, I tried to highlight the “revenue” aspect for RA and the way KRA’s should be worked on. In continuation to that post, here are 5 questions that should be considered before starting of the RA activities:

  1. Who is responsible for RA?  It has to be a collective responsibility across the organization where every team/department has their role to play. Being in the Revenue Assurance department, is almost as good as being a Product Manager- where the individuals do not have a lot of control on the rest of the organization, yet they are suppose to own and be “solely responsible” for the role/product in the company. Hence, aiding in RA activities is as much a responsibility of Marketing and Network departments as it is for the core RA team.

  1. What should be viewed as the tactical task for the RA department?  All actions/activities that has the ability to allow the operator to generate revenue needs to be monitored to make sure there are no leakages.

  1. What is the ideal number of controls that should be worked on by the RA teams? This depends on the maturity of the organization in terms of organization, influence, people, process and tools. Hence it is always preferable to perform a quick maturity analysis, based on which primary focus areas would be identified and controls created. Not all controls would necessarily impact revenue. Understanding the maturity enables the creation of a roadmap for improvement across the organization. Typically there is NO need to have hundreds of KPIs to monitor each segment or process. This is because of the 80-20 rule. 80% leakages can be found by 20% of appropriate controls. Hence it is essential to work on controls/KPis that have maximum impact, rather than trying to monitor hundreds of them.

 

  1. 4.       Is Cost Management a part of RA activities? Only when the RA team is capable enough to secure the top-line for the organization, should they focus their activities on more strategic objectives like cost and margin assurance and management. Revenue maximization should ideally not be a part of RA department activities.  Most RA teams should venture into this area solely to ensure they provide ample Business Intelligence for marketing and sales departments to take the information to the market to generate more revenues.

 

  1. 5.       What are the most important parameters to report on?  RA departments should look to quantify the findings from data analysis to provide view of
    1. a.       leakage detected
    2. b.      leakage corrected and recovered
    3. c.       leakage corrected and recovered as percentage of detected
    4. d.      leakage detected as percentage of revenue
    5. e.      leakage detected as percentage of EBIDTA
    6. f.        time to recover from detection of leakage.

In a nutshell, RA is not rocket science, but it is an extremely important and challenging aspect of business- not only telecoms but across other industry verticals as well. The effect in telecoms is much more because of the complexity of operations.

In following articles, we would talk more on RA, scope, new horizons and verticals for RA. Stay tuned.

The 3 R’s of M2M

The revenue

The statistics are astounding. The predictions for future adoption and revenues from machine to machine (M2M) technology nearly boggle the mind. Devices in the billions, revenues in the hundreds of billions. No matter how you define M2M, the uptake and revenues look very promising.

The risks

Any service that expands quickly will have growing pains and certain functions will need to play catch up. Small issues that while manageable on a small scale tend to break down when the scale is increased. M2M and fraudsters are most likely in this category. Devices that are physically removed from constant human presence and are in unsecured locations provide fraudsters with an opportunity for acquisition. In addition, these devices being part of a network provide additional opportunities for fraudsters. Many of the fraud cases to date have been with the stealing of Subscriber Identity Module (SIM) cards from unattended devices, plugging them into devices that allow the fraudster to make calls. Cases, such as fleet monitoring devices, traffic lights, vending machines and others have fallen prey to this. The only key is that fraudsters figure out where they are and have the tools required to gain access to the SIMs. Although network providers often have the ability to limit SIMs to only make calls, and not send text messages or use data access, they are often not able to prevent calls from happening when plugged into a device. This provides fraudsters a way to make calls by simply using a screwdriver at the correct target.

Other types of fraud are likely to become more relevant. Downloading malware onto a device either via direct physical connection or through the network that an M2M device is connected to will enable the fraudster to take over the device. This could enable the fraudster to change the behavior of the device. Imagine a security system that suppresses notification of intrusion or a traffic light that changes based on the desire of the fraudster, which could either create traffic jams or a dangerous free for all. An M2M device could also be used for its Internet connectivity to launch Denial of Service (DoS) attacks and try to hack into Internet sites with no tie back to the actual fraudsters.

Internal fraud is also a large worry about M2M services and devices. Employees have access to generate orders and employees and in some cases third parties have access to the devices and SIMs cards and may steal or route them to fraudsters. Once SIM cards have been acquired, then they can be used for similar purposes as described above.

The response

A comprehensive strategy to prevent fraud in M2M services has three main facets. The first facet in limiting fraud is to put the appropriate internal controls around ordering, fulfillment and distribution of devices, including channels. These controls need to limit or eliminate the possibility that fraudsters will gain access to devices without them being deployed for their specific purpose. The second facet is to restrict as much as possible the activities that a device is able to perform. Some networks do not allow for voice calls to be prevented, but certainly international calls can be disabled. Also, data access is a required service for M2M, but restricting data to certain bandwidths or URLs can be effective at preventing fraud. The final facet is setting up a monitoring system to look for activity beyond the norm for a device, variation from historical patterns or activity that is similar to prior frauds that have been detected.

Managing Product Performance Using Advanced Analytics

It seems there is an endless array of products being offered to mobile customers every day.  Prepaid plans, postpaid plans, new bundles, new handsets, movement to services on tablets, increase bandwidth offers for data streaming, etc.  As operators load the consumers up with more and more choices, understanding what is being bought, who is buying it, is the product making money, when does it start making money, will a new plan rob my bottom line accidentally, etc, are all questions operators must be able to answer, and on an almost daily basis.

As an operator, you should be asking a series of daily questions that need to be answered to protect your business and identify significant revenue opportunities and risks:

1.  What are your product margins today?  Which products are generating positive returns?  Which programs are missing their business plan?  By how much?

2.  When a new product is proposed, do we understand what the impact will be from our existing customers that migrate from their current product to this new product?

3.  When a competitor responds to your new offer with a comparable offer, how fast can you see that impact to your market?

4.  What is the right product offer, the right price, for the right customer segment, in the right section of the network that we should be focusing our marketing resources around?

Many of these questions require much, much more than simple metrics and reports generated by mining activities.  They require advanced analytics that allow operators to predict behaviors and successes (and failures) before those events come to pass, and most importantly, before budget and resources are focused in the wrong areas!  Advanced analytics offer predictive, detailed analysis about what an operator should do, why they should do it, when they should do it, and what the expected outcome should be.  Unlike simple forecasting, analytics is based on science, and offers a proven methodolgy for establishing successful strageties in the business in a near real time environment.

ROCware Product Performance Management (PPM) addresses these (and many other) issues, in a near-real time, high performance analytics environment.  Using ROCware’s advanced analytics technology, PPM is able to provide operators with a full view of their products, margins, and a highly robust future-view into margins, customer and product behaviors, and many other factors that are crucial to properly track and manage your product portfolio.

It is very common today for an operator to have access to limited product data.  Looking more closely at what the operator actually does have access to, it is really often based on excel spreadsheets, with limited information around sales metrics, with some segmentation.  This is not set up as a repeatable process, and thus the requests are completed manually, and most commonly with 4-6 week latency.  This doesn’t help an organization understand margin and profitability; it doesn’t help an organization understand competitive impacts, or the impact of a proposed plan on your existing market.  ROCware PPM does all of this automatically, every day.

There was a time when a monthly performance report was adequate.  That was before products became far more complex, and competitive pressures were measured in days (sometimes hours).  An operator without daily views into their product health and threats is vulnerable to risks that could cost the business millions of dollars in just a single month.  ROCware PPM, along with the other ROCware suite of advanced analytics solutions, takes this worry off the table, allowing operators to quickly and confidently mange changes in their business.

John Brooks
Vice President – Product Management - John Brooks serves as the Vice President of Product Management in Subex. He has over 26 years of experience in Telecommunications, spanning Fixed, Mobile, Data, and Video technologies. Within the industry Mr. Brooks was a board member for the GBA, founded the TM Forum Fraud team (authoring the first International Fraud Operations and Fraud Classifications guides), and now leads the TM Forum Network Asset Management team, focusing on transformative best practices for SDN/NFV operations. Over the years Mr. Brooks has served as an Advisory Board member for a prominent technical university, and has spoken at over 50 industry events and authored numerous papers on topics spanning IoT, Digital Disruption, Big Data, and Enterprise Risk Management. With Subex (formerly Connexn/Azure) since 1999, he has directed over 40 successful Cost, Revenue, and Business Optimization engagements at over 24 top-tier carriers globally, including AT&T, America Movil, BT, Vodafone, and Verizon.

Press & Analyst Contact

Sandeep Banga
E-mail : sandeep.banga@subex.com