Product/Profitability Assurance

How to deliver the expected level of profit to the business?

Key challenges without Assurance

The profitability assurance is important to mitigate the root cause areas of leakage such as product/service not delivering the expected margin, services fee higher than retail charge etc. If not followed it leads to challenges like:

  • Product/service as implemented cannot deliver the expected level of profit to the business.
  • Retail pricing is set lower than the costs to deliver some or all of the services, resulting in low/zero/negative margin.
  • Retail pricing is not adjusted to maintain profitability when the ongoing costs of delivering those services increase, resulting in low/zero/negative margin.
  • Costs incurred from third party suppliers is higher than retail charge, e.g. national roaming fees, VAS service charges.
  • A fixed price discount is calculated from a value that is subject to change and therefore can affect the fixed price discount.

What Subex Business Assurance offers:

Understand existing Business models
Analyse existing business models and understand their revenue & cost overheads and current margin computation methodology, along with available data sources
Logic related to all revenue and cost items
Align the items into meaningful categories, example: Usage revenue (within/outside product), Interconnect Revenue (Domestic/International) and define cost model for ascertaining the per unit cost
Analysis at the granular level
State-of-the-art hardware & computing engine is put in place which can combine multiple sources from different systems and run profilers to derive the final margin, in a scheduled way.
Computation at different parameters
Involves setting up a system with features of roll-up and slice-dice to derive the final margin against different parameters

Additional Coverage

The Product/profitability assurance has a key role to play under Business Assurance. It involves activities to allocate the Network Cost using various industry leading cost allocation models, derive both direct and Indirect cost per subscriber, product and other KPIs. It also analyze the current data sets available in environment for the applicable cost and revenue heads under scope. Compute the subscriber wise revenue and gross margin cost for various services utilized by subscriber. It also offers other benefits such as:

  • Based on Billing and SAP reports compute the Revenue
  • Compute the following Gross Margin cost for subscriber
  • Based on Industry Leading practices, allocate the Network cost at Subscriber and Product level
  • Compute the Product Gross Margin Less Network Cost using various information
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