Tags Posts tagged with "Revenue Assurance"

Revenue Assurance

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“In school, we’re rewarded for having the answer, not for asking a good question”

This quote from Richard Saul Wurman rightly describes how a normal human mind, as part of it’s social development process, adapts to the guidelines of “finding the answers”, rather than exploring the possibilities of asking the “right questions”.

And this mindset also reflects in our place of work. We are humanly tailored to explore satisfaction in having answers to all the questions. And in the process of being ‘answer ready’, we tend to become left brain heavy than the right. We become target driven and focus less and less on fresh set of questions which could challenge us further to drive improvement and innovation.

Fraud Management ‘function’ is no different. Being a ‘revenue protection’ function in a large ‘organization’ it is expected to act similar to a small, but important organ in human body.
Like hormone levels of an organ, health of an FM function is also measured in terms of subjective financial targets – either monthly, quarterly or yearly. And the corrective action starts when the achievements are found to be ‘less than optimum’.

But, as an experienced doctor would say – It’s the lifestyle you need to keep in check and not hormone levels to remain healthy!
Constant self-assessing questions such as – “Am I eating right ?”, “Am I sleeping right ?”, “Am I sitting right ?”, “Am I exercising right ?” etc. go a long way in guaranteeing you a healthy life. Periodic check-ups then becomes a method to confirm your good health rather than just means to detect illness or deficiencies.

Keeping healthy is a continuous process – be it human body or fraud management. It is actually a practice, than just a function.
And to setup a continuously improving fraud practice in your organization it is essential to keep asking relevant & timely questions across the following 8 pillars of this practice:

  • Influence
  • Organization
  • People
  • Process
  • Tools
  • Knowledge Management
  • Coverage
  • Continuous Improvement

While the questions could be an organization, risk or region specific, I personally always start with the following:

Influence:

  • Is our FM function on a driver seat or secondary role and working as a support function ?
  • How should we enhance the influence of our FM function ?
  • How do we keep showcasing enhanced value from FM function ?
  • How do we extend our internal & external interfacing and make the existing interfacing stronger ?

Organization:

  • How do we ensure fraud awareness keeps pace with the upgrading business dynamics ?
  • How do we enhance internal & external collaboration with FM function ?
  • How do we get higher return of investment from FM function ?
  • How to further reduce the fraud impact on the bottom line ?
  • How to make our fraud management practice more proactive ?

People:

  • Is resource acquisition better or resource development ?
  • How do we safeguard ourselves from attrition ?
  • Is our team structure agile enough while following industry standards ?
  • Do we have all the required roles and are the responsibilities clearly defined ?
  • Are we right, under or over staffed ?

Process:

  • Are my processes effective and easily exercisable ?
  • Are my processes future ready ?
  • Are my processes agile enough to adapt to any changes with acceptable TAT ?
  • Are we adopting and implementing industry best practices ?
  • What parts of my processes can be automated ?

Tools:

  • Is the Fraud Management tool adapted to my business environment ?
  • How do I ensure that the FM tool is fed accurate, complete and timely data ?
  • Are my fraud controls effective & efficient ? How do I reduce false positives ?
  • How do I ensure 100% automated fraud risk coverage ?
  • What capabilities do we need to acquire on tool front to be future ready ?
  • Are we ready against enormous data surge likely to be seen over next few years ? How do we benefit from it ?
  • Are we constantly learning from the industry in terms of fraud detection & prevention methods ?

Knowledge Management:

  • Is there sufficient attention on upgrading to the required skill sets ?
  • How do we enhance resource competency & knowledge against current & future services ?
  • Is our team keeping pace with constant fraud mutations ?
  • Is our team using the tools effectively & efficiently ?
  • Is our team knowledgeable and comfortable with processes ?
  • What are the top 5 areas of learning for the whole fraud function ?

Coverage:

  • Are we aware of all the fraud risks we are exposed to ? What is our current coverage levels ?
  • Do we know the gaps in terms of fraud risks coverage ? How can we improve ?
  • What is our strategy to become compliant to fraud risks introduced by new products and services ?
  • Are we ready for fast converging cross industry environment and the risks it introduces ?
  • What is our stand on customer and partner only risks ? How relevant they are for our business ? Is our current stand obsolete ?

Continuous Improvement:

  • What is our performance management strategy ?
  • Do we have effective KPIs ? Are these business relevant ?
  • How can we improve the fraud function’s effectiveness & maturity continuously ?
  • What metrics should I use to measure health of the overall FM function ?
  • Are we conducting sufficient & periodic RCA & decision analysis ?
  • How do we gather accumulated wisdom & actionable intelligence for improvement ?

Each of these questions can be a healthy point of discussion within your organization.
While these may give you a first hand view of health of your current fraud practice, more importantly, it may also open doors for a much detailed open table introspective sessions, enabling you to come up with much better & effective questions.

Remember, the key to remain healthy is to keep asking the ‘right’ questions.

As Albert Einstein rightly said – “If I had an hour to solve a problem and my life depended on the solution, I would spend the first 55 minutes determining the proper question to ask, for once I know the proper question, I could solve the problem in less than five minutes.”

GSMA has a vision for 2020 for Telecommunications Industry around connected living which focuses on main pillars which are expected to drive the industry forward, namely – Network 2020, Personal Data, Internet of Things and Digital Commerce.

As per my view, the single most important take away from that vision is the rise of Telco 2.0.

Telco 2.0 are those telecom operators which are expected to expand transformationally by taking risks to chase higher rewards in both known and as yet unknown new parts of the value chain. These are expected to be the most advanced & disruptive Telecom Operators.

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The most important enabler of these, so called, Telco 2.0 operators would be the ‘platform’ which would allow them to explore & experiment with those unknowns and expand services while ensuring higher customer experience which will help them achieve that visionary status.

One of such platforms is 4G, which riding on the inability of 3G-3.5G networks in delivering the required quality of service, has shown tremendous adoption rate within operators over the years.

What has made 4G enabled networks so popular is its proven capability as an ideal platform for cross domain services convergence & all access technologies.

A comparison between 4G LTE & HSPA (~3G) based network and service delivery capabilities can be seen below:

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The bitmap above also provides a crude reasoning around lower adoption rate of certain services which were also rolled out over 3G enabled networks, but did not meet the consumer expectations around quality, reliability and price.

4G based networks provide the ability to the operators to become the ‘Real’ converged service providers, which until 3G was more theory than practicality. Operators are now becoming OTT service providers including communication, social media, social network, content, advertisement etc., connected living enablers, enterprise enablers etc. which was, until now, being offered mostly by 3rd parties.

With operator owning the converged service offerings (or at-least controlling some part of the service delivery like quality etc.), the increase in traffic over its pipes has shown potential of increase in direct revenues, that too proportionately.

Factors influencing complexity in 4G environment

Yes. 4G is great! But, not without the share of complexities it injects in the area of assurance (RA & Fraud) operations.

The following variables are identified to be the main influencers with respect to complexity and uncertainty in 4G environments:

New Network Elements

4G introduces new set of network elements and O/BSS systems generally being customized in terms of design or implementation as per the operator raising concerns around interfacing, data availability or quality. This also points to increase in complexity & volume of RA & FM activities to be performed due to increased data sources and controls.

Also, a lot of components in 4G implementations are still not COTS and provide different logging & access levels which raising concerns around capability around identification of internal frauds and external access attempts/brute force attacks.

Parallel Networks

Traditional networks including certain components adopted from 2G, 3G environment and running in parallel to enable backward compatibility and interconnection leads to further increase in risk, complexity and number of controls to be managed.

Non Standard Implementations

Some areas of 4G network, O/BSS systems and interface partnerships (operator, content providers etc.) are being implemented in customized non-standard fashion to enable interconnections (including roaming approach) and support complex products and service offerings (like VoLTE or VoLTE roaming etc.). The situation is more of an experiment and working towards developing a standard rather than following one.

Lack of reference 4G RA & FM practices combined with custom implementations, RA & FM activities are expected to be driven by non standard data sets and frequencies until stability/maturity.

Initially in 4G space, RA & FM practices may be exposed to the scenario of ‘Incident induced learning’ or ‘reactive RA & FM’.

Higher Convergence

Higher convergence of ‘core’ telecom operator provided services introduces more ‘direct’ risks to the operator and an increased need to manage RA & fraud risks introduced by the new services, which in an earlier setting, was a headache of the third party service provider.

New Pricing Models

Conversion to charging policies from minutes to bytes (sessions) and bytes to service subscription & access mixed with complex bundling packs & rate plans is expected to change the traditional mindset of conducting RA & FM, especially around charging, discounting, billing & invoicing.

Disruptive roaming charging policies are also expected to be introduced which will change the perspective further.

For session based charging policy, verification of policy implementation is also expected to impose its own set of challenges.

Complex service offerings

Telecom operators are going beyond their traditional service offerings (Apart from voice and data – TV / content / cloud etc.) and venturing into the modern areas revenue generation such as content, advertisements, connected living etc.

Rich content (VoD, music, messgaging, magazines etc.) management & delivery to become the fulcrum 4G revenues. Also, with various channels of content delivery at hand, advertisement revenues will also play an important role for mature 4G operators

But, service based subscriptions, validity & dynamic delivery along with innovative & complex content and partner agreements are expected to complicate the RA & FM activities like never before.

Increase in transaction volumes

4G subscriptions is expected to increase 3.5 folds to 1.3 billion and data traffic by 6 folds to 17 Exabytes by Dec 2018. Operators will be dealing with many fold increase in data per unit of earned Revenue.

Considering revenues are tied to data sessions, transaction volume mgmt. for the purpose of RA & FM is expected to introduce a big challenges and would require advance data treatment, management & analysis techniques (e.g. Big data).

Responsiveness & Scalability is expected to be one of the main talking points with respect to volume management

Rapid Product & Services Launch

New product, package and service launch across the breath of 4G enabled service platforms are expected to see a considerable rise in throughput due to shortened development, delivery & release cycle.

The agility of RA & FM departments in terms of proactive assessment and risk readiness is expected to keep pace with the higher number of products, services and packages being launched at the breakneck speed across the breath of business offerings

Margin Management & Revenue Enhancement

With increased competition, Revenues are expected to be driven by high volumes and low margins and not high margins. Product performance measurement in terms of adoption and revenue generation against target will have to be carried out at much higher frequency.

With RA having and access to all cost items, charging, payins/payouts, usage records, quality parameters and first visibility to trends and anomalies, margin management and revenue enhancement activities are expected to take center stage

Skill set and technology within the team will have to be enhanced or absorbed to enable and handle increased cross functional interfacing , analytics and product management

Lack of Skill Set

Lack of mature reference 4G implementations is also expected to lead to lack of required skill set which is needed to manage and continuously improve the RA & FM operations. There will be focus on more laborious, reactive & risk prone approach of skill ‘creation’ rather than ‘absorption’

Updated Network Access Authentication Methods

Operators need risk readiness against newer authentication methods which are different for different services – ISIM, USIM, Single Sign On etc. Considering device authentication & security is in the hands of the manufacturer or the OS provider,  any security flaw is a direct risk to the subscriber base of the operator

Also, 3rd party firmwares & apps are readily available for the assistance of hackers. This situation increases the device or OS takeover further.

Increased UE & CPE Types

Exponential increase in multi vendor UE & CPE types has increased user exposure to IP frauds like takeovers (Accounts or UE) enhanced by ‘easy’ service access methods such as ‘single sign on’ for single or multiple services.

While user equipments are highly exposed to malicious Apps, URLs, Malwares etc., readily available custom firmware for Customer Premise Equipment are found to expose them to the same level of risks.

To top it off, high profile sensitive customer information hacking cases by external sources are on the rise both against individual subscriber and enterprise networks, calling for much more robust, secure and continuously improving infrastructure and detection capabilities.

Power user exploits

Power users or technology aware users are expected to exploit any loopholes in the implementation of service access, newer pricing models etc. through the use of various complex techniques such as URL masking etc. to bypass charging and gain free access to services

Spoofing or device configuration updates like MAC Address may also gain popularity to help divert charging to someone else in absence of adequate authentication and multi level device binding mechanisms

 

Movement to 4G or a higher capability environment is inevitable.

I believe, if traditional approach to manage RA & FM operations is continued as it is even for 4G environments, these functions are expected to attract steep investments to manage complexity factors mentioned above (including increase in network elements & O/BSS systems, data streams, data loads, controls, resourcing, technology requirements etc.).

There is an immediate need of shifting from current mindset and adopting “Smart” & “Agile” RA & FM practices across the operational spectrum (of people, process, measurement, organization & technology) to contain costs and risks much more efficiently.

Taking a cue from Game of Thrones – “Winter is coming! and this one will be long. God help us all if we’re not ready!”

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While pressures on cost and margins with traditional services remain, fast emerging services are bringing in new risks and demands for new skills to manage them. Telcos are now looking for Managed Services engagements as a key differentiator in the emerging world.

 Telco’s are at the cross roads today – on one side they are pushing boundaries in a saturated and commoditized market to garner revenues and improve margins, whilst on the other they are pressurised to innovate and cater to the demands of the ubiquitous connectivity and data enabled services. Telco’s do not have a choice, but to act, to remain relevant in the market place with the changing landscape, new challenges and competition. With telco’s looking inwards for business optimisation – focusing primarily on the profitability of the business and monitoring the operational state of the business – what are the key trends shaping the industry and opportunity landscape ?

 Opportunities to remain relevant and successful in the new world order are plenty. Some of the initiatives are fairly quick to implement, while others require long term dedication and focus. Let us look at 3 key areas of opportunities in BSS for any telco.

  • OpEx control – Improving margins: The immediate and short-term opportunity for telcos is to control OpEx and improve margins on an already stressed traditional revenue streams. However, how do operators overcome the challenges facing them at two different levels – (a) skills upgrade (b) shortage of talented resources internally, and start improving their margins?
  • CapEx control – Improving RoIC: In the medium term, telcos are going to invest heavily in new and emerging technologies. The common conundrum corporate heads face are related to (a) successfully managing risks that comes with anything new (b) utilising the available critical capacity of technology & resources (c) responding timely & appropriately to market in face of competition and consumer expectations. How does Managed services help in providing the necessary capabilities to improve RoIC?
  • Economy of scale – Fuel growth: In the medium-longer term, telco leaders are going to look beyond their operating boundaries ; Industry consolidation, overseas M&A, new sources of revenue like PaaS/IaaS/SaaS for MVNOs or group op-co’s will be a key ingredient to the revenue growth. Is Managed services a viable solution to manage strategic and compliance risks?

Click here and download our latest newsletter in collaboration with Gartner for answers to the critical questions facing the industry leaders.

 

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Over the years we have gained a deep understanding of the culture within telcos. We are best known, through the ROC, as specialists in Revenue Assurance and Fraud Management. As such, we know how to deliver different views of the same data.

Having successfully done this in the BSS world, we have turned our attention to the networking side of the business. Controlling costs and optimizing network capital investment are priorities for the business and managed by the CFO’s office. Optimal usage of the network assets and manage traffic effectively are under the control of the CTO’s office.

Both offices need access to the same information but in different ways. With different priorities, sharing the same information without interpretation or tailored analytical choices would make communications between the two entities very difficult.

A CFO needs to know how many assets are stranded and therefore not producing revenue. Right now, the status and whereabouts of only 75 percent of a telco’s assets are known. Knowing where assets are, knowing how long an asset is in place before it is revenue producing and knowing that delaying an investment for a month makes financial sense is of huge importance to a CFO.

Understanding which assets can be re-used in other parts of the network, or which need to be retired can help the CTO with his priorities. Some assets can be effectively re-sold, so what is a retirement to the CTO becomes a possible source of revenue for the CFO.

We believe that creating a view into network assets will benefit both offices and create a better collaboration between them. Revenue Assurance can provide a financial view of IT assets, which adds a new and effective dimension to that craft. So, too, Asset Assurance adds the tools to the network capex side of the business to actively manage it. We not only believe it, we know it. Working with one of our customers we found $17 million of stranded assets in a single week. Better yet, Asset Assurance also benefits the customer.

Talk to a Telecoms Manager about what he would like from his telecoms provider and he will not say more accurate bills as a priority. He accepts that billing is complex and accepts that his comms bill will never be 100 percent accurate. What he would like more than anything is to know what inventory is in place in his organization, where it is, whether it is still live and whether he is paying for it. This can be discovered with Revenue Assurance tools, but now the communication providers can actively manage the whole inventory issue with the new Asset Assurance solution.

By leveraging our experience in Revenue Assurance and Fraud Management in the OSS world, we are now proud to be able to offer solutions and expertise to operators in all of the vital parts of their business, including network. And we are already proving that this concept of asset assurance is important in managing assets more effectively and efficiently.  We also believe, like many such solutions, that we will discover uses for Asset Assurance that we cannot quite see yet. We will keep you up to date with the story as it unfolds.

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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.

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What is the scope of Revenue Assurance? Honestly, this is a vendor / RA team/ consultant capability dependant age old myth, leading to the term being a misfit for the purpose. There are always things that one can debate on such as what is in scope and what is out of scope? However, if one takes the terms “revenue” and “assurance” at the face value what would be defined as the scope of work? It would simply mean any activity/event that has the ability to generate revenue should be monitored to ensure that the associated ‘revenue’ is generated; and if it is not, ensure steps are taken to fix it. Sounds fair? But then, this brings in another primary question: “What is “revenue”?

Ask personnel from finance and they would give you the most appropriate and correct answer. Now if you ask the same question to an RA professional, the response would not be encouraging. It is not to say that such individuals don’t know anything- but it is a matter of knowledge w.r.t the financial context. Typically, the individuals working in the RA department have sound knowledge of KPIs, data analysis and such items that are monitored as part of RA activities.  However, often the large part of data analysis related to finding leakage is not translated in the correct/appropriate terms for business benefit.  The net effect of this at times, results in inappropriate KRAs for the RA department. I remember hearing somewhere, the KRA for the RA department for an operator was to detect x% more leakage from the previous year!  I don’t think that is a valid KRA.

The solution therefore is to establish the following two things:

  1. KRA’s for the RA department need to be worked backwards: The KRA’s of the department need to be defined keeping in mind the core business objective of the operator.  In this aspect, one would have to determine, how to map the organization KRA’s to that of the RA department? This would definitely vary across operators. Example, if the organization’s focus is to improve profitability of services, one would have to determine the impact of the same in cases of leakage.  Hence, the KRA for RA department would have to be worked backwards to ensure that the efforts put in by the RA department are aimed at fixing leakages around activities that would improve profitability.

  1. Accounting of detected leakages in a manner that makes sense:  The “revenue” calculations should be used only for quantification and gauging the leakage potential and recovery. This may or may not be the most accurate revenue calculation because RA is not accountable for revenue generation. However, there are a few methods  which use the following of revenue calculation
    1. ARPU
    2. “best fit rating” of usage xDRs
    3. Effective rate of XDRs
    4. Effective rate of files

NOTE: A revenue assurance department should ideally NOT even attempt to calculate Revenue per Stream/Service/Business Unit, ARPU, AMPU and other revenue figures. These should be obtained from the financial systems for quantification of the leakage detected and to understand the potential impact of leakage on the top line of the company.

Besides “revenue” there are multiple other aspects of RA that should be addressed and answered much before the start of RA activities. In the next post I would try to address the following 5 questions that should be looked at, as the business aspect around RA:

  1. Who is responsible for RA?
  2. What should be viewed as the tactical task for the RA department?
  3. What is the ideal number of controls that should be worked on by the RA teams?
  4. What are the most important parameters to report on?
  5. Is Cost Management a part of RA activities?

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Could privatization of Air India have saved this day? Should the government be running a business? Should it have left the business to people with the necessary skills and expertise? It is argued that privatization, which is a part of disinvestment process, results in better use of resources and efficient allocation. Around the world, many instances of businesses that have thrived after government relinquishing control are common place (there is also the other side that have not taken off well due to various other critical success factors not being met).Nevertheless, increasingly, governments are taking the role of regulators and not producers.

Is it not a similar situation being observed in Telecom industry? From a situation where the Telco’s produced (or managed) everything themselves, they are shifting their focus to building brand equity, customer satisfaction and user experience. Thus, telco’s are deciding how their eco-system needs to shape and work to achieve their goals (regulators), while a partner is delivering the required results (producers). Some of the strategic outsourcing engagements in India (Bharti and IBM for example) are very good examples of a thriving partnership. What was common place for networks is now spreading its tentacles to B/OSS.

Of course, many Telco’s are in a quandary on where to fit in functions like Revenue Assurance & Fraud Management – firstly, does it come under tactical operations or strategic business? One RA business head that I know of in the region has been tasked, by the CFO, with a specific KRA of increasing revenue by “x%” from the existing customer base in the current FY. Many more are likely to follow suit in the coming years (refer to KPMG Global RA survey 2012). The profile of RA/FM is changing – in addition to protecting revenues; they are involved in the areas of enhancement & managing revenues. Hence, the answer to the question above – RA/FM are both tactical (producing the desired results) and strategic (supporting the strategic initiatives of the organization).

Now what would be the right strategy – should I outsource or not? There is no one answer that is right. The only right answer is “what suits you”, depending on the organizational social & cultural makeup, risk appetite and the scale of economic issues. When I meet my customers, we work with multiple options and eventually decide on the best fit. Here are a few possibilities that could be looked at:

  • Pilot program (minimal scope, few people, short duration etc) for the risk averse
  • Bonus / Gain share to ensure accountability from vendors
  • Part outsourcing the tactical part and retaining strategic initiatives (remember one main challenge is to retain resources for career progression reasons. This would be an opportunity to give them the much needed upward movement into a new area)

No matter what the option chosen, it is important that it works for both the partners in meeting the common goals.

And, I hope Air India takes off well again – they have better leg-room and delicious food compared to other airlines in the sector.

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During one of my business travels recently, I met the Revenue Assurance & Fraud Management heads of few telco’s. There was one meeting in particular that struck me – let me call him Jack, the AVP of FM. Jack has been using a Fraud Management System(FMS) for close to 4 years & has certain business challenges to address. Jack was exploring the option of upgrading the FMS to tackle the challenges and needs.

Jacks’ primary challenge was to build a business case justification for FM upgrade to show the elusive RoI. Apparently, there have been challenges of his team detecting fraud, and he was of the belief that an upgrade will help address the fraud in new generation of services (which the current system is not capable of) and thus contribute to the RoI.

On probing further it was clear that he’s been under tremendous pressure from the higher-ups to showcase RoI, especially in the recent past due to tough macro-economic conditions. Some more questioning and discussions with his team members revealed that there have been (and are) many hurdles in performing their tasks –

a)      IT issues pertaining to system availability, performance, processing & tuning

b)      Knowledge issues in fine-tuning the rules and thresholds periodically

c)      People issues in understanding the domain and carrying out effective and smart investigations

While the operator is on a drive to introduce Next Generation services, more than 88% of the revenue still comes from traditional services – Voice, SMS/MMS, Roaming, Interconnect and GPRS. The top frauds also happen in these areas – http://www.cfca.org/fraudlosssurvey/

It was a revelation for Jack when the data was put up for discussion. It was also evident that an upgrade alone is not going to solve his problem. The need of the hour was an overhaul of the entire eco-system (address the 88%), along with the upgrade (to address the remaining 12%).

During the course of the discussion, I suggested a few best practices based on prior experience through the Managed Services engagements.

a)      Conduct an assessment to baseline the performance of the current function, including a SWOT analysis and detailing a roadmap for growth

b)      Basis assessment, build a business case for justification for skills/efficiency improvement and required technological upgrades

c)      As next step, strengthen the foundation of fraud prevention by improving on people, process by leveraging on best practices and experience from vendors and partners if needed

d)     Once the basics are addressed, mature to the next level by incorporating technological, process, procedures & skill upgrades

I also quoted one such Subex Managed Services engagement in India, where the operator was on an older version of the Fraud Management when the engagement started and has seen more than 2 times RoI within a year, followed by an upgrade to latest version. This helped them in the following ways:

a)      Optimize the resources as a first step and improve on fraud operations through skilled workforce, leveraging on existing technology and automation of repeatable tasks

b)      This resulted in significant financial savings, lowered operational and workforce risks, improved knowledge and enhanced business agility

c)      The highly scalable model for future growth also meant they were able to choose specific fraud related services and technological upgrades depending on its strategic objectives and business priorities

Jack, being the positive person, was able to appreciate a new perspective on his challenges and is looking forward to a detailed assessment to build a case for strengthening the FM team.

After this incident, I wonder are there more Jack’s out there with the right intention but not necessarily armed with the right tools?

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Sim Box Fraud, Landing Fraud, Grey Routing, VOIP Bypass whatever you may want to call it – Bypass Fraud continues to hurt operators across the globe. As per CFCA, operators lost more than 2.88 Billion USD to Bypass fraud in 2011!!! Imagine operators could have sold 7 million Iphones and 3.5 Million Ipads with that much money.
In the recent past we heard of 2 news involving Bypass fraud in Philippines and Ghana –
A huge bypass racket involving three Taiwanese nationals and a Filipino was unearthed at a condo at Makati City – Manila, Philippines. . Losses for operators ran up to millions of Pesos.
While in Ghana – where operators have lost millions of dollars to bypass fraud, the regulatory body has made it clear that if it discovers any illegally acquired SIM cards being used for SIM Box fraud, the respective telecom operators would be held responsible and made to pay for it
Below infographic highlights the unique approach used by Subex to not only detect Bypass fraud but also detect the root cause and prevent it.

To download pdf, click on the given link Bypass Fraud Infographic

Co-Authors – Ravish P, Nithin G & Ashwini S.

Creative – Shafi

Sources:   http://www.ghanaweb.com/GhanaHomePage/NewsArchive/artikel.php?ID=224287
http://allafrica.com/stories/201112010282.html
http://www.fox979online.com/index.php?option=com_content&view=article&id=78:vodafone-and-police-bust-another-sim-box-fraud&catid=4:business-news&Itemid=4

http://fixed-mobile-convergence.tmcnet.com/news/2012/01/03/6027997.htm

http://www.revector.com/news/raids-sim-boxgsm-gateway-fraudsters-save-mobile-operators-millions

http://archives.myrepublica.com/portal/index.php?action=news_details&news_id=29347

http://www.ossnewsreview.com/telecom-oss/the-berkman-center-defines-bypass-fraud/

http://fixed-mobile-convergence.tmcnet.com/news/2012/01/03/6027997.htm

http://communicationsafrica.com/security/822-150mn-sim-box-fraud-.html

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Our story begins with Farmer Joe who has a beautiful daughter Janet. Farmer Joe decides to bequeath the family decorative pin to Janet on her 20th birthday. Now Janet, in a fit of unbridled joy decides to run around a haystack holding the pin towards the heavens. Suddenly,in a scene far too clichéd to be coincidence, she trips and the pin falls into the haystack…

Now begins the daunting task of “finding the pin in the haystack”. Janet is faced with a dilemma which would be quite familiar to RA analysts the world over – how do we find the pattern which highlights the root cause (or the pin, if you are a farmer’s daughter who goes by the name of Janet) within a world of millions of CDRs.

Of course, the solution is to cut the haystack into smaller cubes and search smaller segments for the pin. Does this sound familiar to you, my RA analyst friend? It should – because this is the way we attempt to find the root cause today. When your system presents you with millions of CDRs (or, God forbid, meaningless summaries), we tend to break them into smaller sets which have seemingly similar patterns. Then begins the back-breaking task of finding the elusive pattern that indicates the root cause – an endeavor that involves quite a few cups of strong coffee, pointless mails and shattered dreams regarding deadlines and analyst efficiencies.

But hey, this is how we do Root Cause Analysis the world over right? We would reduce our effort by managing the problem size right? Well, it gives me great pleasure to say that the winds of change are blowing. Today, I would like to introduce to you to a fundamental paradigm shift in Root Cause analysis which would effectively transform the way we do RA.

Let’s imagine for a second that Janet decides to find the pin by placing a powerful magnet over the haystack. Consider how much time and effort she saves, as compared to breaking the large haystack into smaller stacks. Consider how sure this solution is, as compared to the possibility of not finding the pin even after breaking the haystack into smaller segments.

Now imagine such a magnet for RA. A magnet that presents the analyst with all the hidden patterns in a problem set (discrepant CDRs). Imagine how this would change your day in terms of boosting analyst efficiency, achieving cost efficiencies as a department, being prepared to handle new and upcoming technologies and always staying one step ahead of the curve.

That magnet has a name, and its name is “Zen”. Subex recently launched ROC Revenue Assurance 5, and along-with RevenuePad (which my colleague Moinak would write about), Zen is one of the fundamental pillars of this ground-breaking solution.

Zen is an automated Root Cause Advisory engine which provides, for the first time ever, machine intelligence for pattern identification and presentment. What makes it revolutionary is that the engine is programmed to sniff out patterns with minimal involvement from the analyst. Give Zen two data sets, and it will tell you exactly why some CDRs in data set 1 are not present in data set 2. This also involves telling the analyst what percentage of the total data set can be linked to any particular pattern. Since pictures speak louder than words, here is a sample illustration:

The future of Root Cause Analysis

Zen is essentially a data analytics engine for ROC Revenue Assurance 5. Based on the discrepant sets identified as the result of an audit, Zen automatically fires up the pattern analytics engine. As Zen works on identifying the patterns, it also works on linking the patterns to specific CDRs (to ensure that an audit trail would be maintained). Finally, Zen presents the analyst with a comprehensive view of:

  • All identified patterns in the discrepant data set
  • Distribution of how many CDRs are linked to which pattern
  • Historic event indicators to further guide the analyst towards the root cause

Zen is keyed towards two “Intelligent” actions:

  • Pattern Analytics
  • Analyst Feedback integration

We refer to Patterns as “Areas” and the learning from past investigations as “Reasons”. Why do we need both, you ask? The answer is fairly simple – the same pattern (or Area) might have presented itself for very different “Reasons”. A simple example of Subscriber profile between HLR and Billing might clarify this point.

An analyst, on performing the HLR vs Billing subscriber reconciliation, finds that 20 subscribers on the HLR are not present on the Billing platform. Now, in the absence of provisioning logs, he/she might surmise that this is a simple case of provisioning error and forward the information to the relevant teams.

However, if the same discrepancy is seen next week for the same set of subscribers, it might be prudent to address the possibility of internal fraud as well. Here we see an example where the same pattern (20 subscribers are missing repeatedly in billing but are provisioned on the network) might be due to two distinct “Reasons” – Provisioning Error or Internal Fraud.

Zen helps you tie it together. Reasons are incorporated into the Zen engine based on “Acknowledgments” received from various teams. This helps to ensure that “False Reasons” are minimized. In this manner, Zen becomes a repository of Analyst intelligence to address the world-over issue of Knowledge Management in RA.

Zen is a virtual analyst who never sleeps, eats or goes on vacations. For sure he will never leave the team (taking his accumulated knowledge with him).

In conclusion, I want all of us to take a moment to step into Janet’s shoes. The pin is in the haystack, and the stack is getting bigger and bigger all the time (due to burgeoning volumes and technology/product complexity). The timelines to find that pin are ever-shrinking, and cost reduction is the call of the hour globally.

How is your team planning on finding that pin?

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