telecom ra survey
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Telecom mu nicat ions Survey 2008
D escriptor
ContentForeword 3Executive summary 5Introduction Revenue Assurance 7Survey set-up 8
The survey results 11Contact information 25
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Telecom mun icat ion s Survey 2008
Forew ord
Looking back to 2007, different trends in the Telecom m unication m arket em erged. All had their ow n speci c challenges:
Decrease of terminat ion rat es an d roaming t ariffs. Even though the num ber of custom ers is still increasing, m ost of the Telecom m unications
com panies offering voice services suffered from a drop in revenues due to the decrease of m obile term ination rates and roam ing tariffs. W e notice
a sim ilar trend for the prices of SM S, M M S and other data exchanges.
Limited success of multimed ia sources. M obile data, w hich are often products w ith low er m argins, continue to be dom inated by exchange of
sm all packets of data, such as m essaging and ring tones, rather than large m ultim edia les.
Limited market response to triple play product. Fixed operator triple play launches w ere w idespread, but discounting rem ained the m ain
m arketing tool –leaving its value proposition open to questions.
IPTV rema ins a n iche prod uct. M obile television failed to gain signi cant traction, w ith som e services ram ping dow n or shutting dow n entirely
due to w eak dem and. IPTV struggled to differentiate itself from the regular television and the overall dem and for the m edium rem ained niche.
2008-2009 prom ise to be equally challenging years: the im pact of a possible econom ic dow nturn on the telecom m unications sector, concerns
about inadequate capacity of the netw ork, the convergence of GPS and m obile technology, the grow ing im portance of com m unications to new
m edia com panies, the accessibility of com m unications to all consum ers and the outlook for m obile phones as it reached 21 years of age to nam e a
few .
Revenue Assurance has not yet properly responded to these challenges. Progress has been m ade in term s of m inim izing revenue leakages, but only
a lim ited num ber of com panies have m oved beyond this point. At its start-up, Revenue A ssurance has indeed dealt w ith the m ost urgent problem s
in the com pany, evolving from an ad hoc re ghting m ode in the late 90’s to an acknow ledged contributor and creator of custom er value. Since
then, its achievem ents have been less spectacular and in som e cases also less visible as not all of the Revenue A ssurance functions report the
prevented revenue losses. This has had an im pact on the perceived added value of Revenue A ssurance, w ith responsibles having to justify the
existence and scope of their activities.
How ever, Revenue Assurance still has an im portant role to play. In a m arket w ith pro ts under pressure, the im pact of proper Revenue A ssurance
processes on the bottom line, and hence its added value to the com pany, increases signi cantly.
By prom oting w orld-class operations across the entire value chain, by assuring the com pleteness, accuracy and optim ization of the revenue
stream , the Revenue A ssurance function can assist the organization in bringing pro table and sustainable products and services to the m arket. The
broadening of the Revenue A ssurance scope to the end-to-end value chain (including a.o. product developm ent and custom er care), is essential for
a telecom com pany to survive in a highly com petitive environm ent w here tim e-to-m arket and custom er retention m ake the difference.
W e note som e of the m ore advanced Revenue Assurance functions m oving aw ay from their traditional role of custodian of the revenues. In order
to further increase the added value to the business, cost assurance has been added to their activities portfolio.
Evolutions in the scope of the Revenue A ssurance function as described above m ay put it back on top of the corporate agenda, as a m ean to
respond to the challenges, assisting in creating the value that shareholders expect. The Revenue A ssurance responsibles should how ever not loose
track of their core responsibility. A scope extension can only be successful in the long run if it is built on the solid foundations of the basic Revenue
Assurance tasks: providing assurance that the revenue leakages are and rem ain lim ited.
This report guides you through the results of our m arket study on Revenue A ssurance in the Telecom m unications sector and can assist you in
benchm arking your com pany w ith respect to the EM EA Telecom m unications industry average. The study has been designed to provide a diverse
selection of view s and thoughts that challenge, inform and engage executives and Revenue Assurance leaders. I hope the results provide you w ith
plenty of food for thought on the road tow ards the future Revenue A ssurance function.
I w ish you a pleasant and inspirational reading.
Laurent Van dend ooren
Partner Deloitte Enterprise Risk ServicesEM EA Revenue Assurance team
Foreword
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Executive sum m ary
The Revenue Assurance function today
The Revenue A ssurance function is further gaining im portance in the Telecom m unication
industry. This is indicated by the increasing num ber of organisations w ith a dedicated
Revenue A ssurance function: 71% of the participant organisations report to have such a
dedicated function.
In m ost of the Telecom m unications com panies the Revenue A ssurance function has reached
an average m aturity level. The Revenue A ssurance function exists and is w ell em bedded in
the organization.
The Finance function rem ains the m ain sponsor of Revenue A ssurance w ithin the com pany:96% of the Revenue A ssurance M anagers report to the C FO w hereas in com panies w ithout
a dedicated Revenue A ssurance function the Finance departm ent rem ains an im portant
sponsor. A lthough the place of the Revenue A ssurance function in the organisation is not
that im portant, but rather the em pow erm ent by the C XO level, the Finance function seem s
to be a good prom oter given its experience w ith risk m anagem ent, internal control, variance
analysis and reconciliations.
The cost of the Revenue A ssurance function (0,013% of the total revenues) is fairly lim ited
com pared to the revenue leakages detected and prevented by the Revenue A ssurance
function. The average estim ated revenue leakage today is about 1,5% . A lthough this is still
high, it is a trem endous im provem ent com pared to a num ber of years ago.
A n im portant contributor to this realisation is the in-house expertise on Revenue A ssurance
that has been built up over the last years. Som e com panies in our survey started w ith
Revenue A ssurance about 13 years ago, giving them plenty of expertise to rely on. O thers
bene t from the best practices available at other com panies w ithin their group. In 52%
of the cases, the Revenue A ssurance function is shared across m ultiple business locations,
fostering the dissem ination of Revenue A ssurance know ledge and best practices.
D oes this m ean that the glory days of Revenue A ssurance have passed? N o, there is still a
road ahead.
Executive summary
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Executive sum m ary
What’s next?
Revenue Assurance has achieved som e trem endous successes over
the years, but it w ill have to address som e key challenges in order toful l the expectations of m anagem ent and shareholders.
Cover the ent ire value cha in. W hen in the late 1990’s grow th w as
starting to slow dow n and the availability of external nancing w as
decreasing, telecom operators began to verify w hether every single
service delivered to a custom er w as actually billed. This w as the start
of the Revenue Assurance activities as w e know them today.
Today w e observe that data collection and billing is still the m ain
focus of the Revenue A ssurance departm ents. In less than 24% of
the cases, the entire end-to-end revenue value chain is in scope of
the Revenue Assurance departm ent.
C om panies, confronted w ith a saturated m arket are forced to
focus m ore on custom er retention. Telco’s are starting to realize the
im portance of an adequate feedback loop on custom er feedback
and behaviour. Revenue A ssurance functions are gradually turning
their attention to the end-to-end revenue value chain, looking at
the business perform ance and the interaction betw een the different
parts of the chain. C ustom er Care is slow ly getting into the picture
as it deals w ith custom er dissatisfaction, typically caused by incidents
earlier in the value chain. C urrently, C ustom er Care is only in scope
of the Revenue A ssurance function in 57% of the cases. Revenue
A ssurance w ill need to realign its activities to respond to these
challenges.
Finding the right b ala nce. D ue to the success of the Revenue
A ssurance activities, som e Revenue Assurance m anagers have todefend the cost-bene t of their activities and the added value
to the business. W e noted through our survey that a num ber of
Revenue Assurance functions consider expanding the scope of the
Revenue A ssurance activities w ith revenue enhancem ent and/or cost
assurance as a solution to that challenge.
W hile this shift in focus can indeed be of added value to the
com pany, Revenue A ssurance responsibles should be careful not to
loose track of the Revenue A ssurance principles. The continuous
m onitoring of the basic Revenue A ssurance controls m ust rem ain a
top priority, given the rapidly changing environm ent.
A nother risk is the potential transfer of ow nership of controls from
the business tow ards the Revenue A ssurance function. Revenue
A ssurance is by nature a controlling body and should be careful not
to jeopardize that role by taking over activities perform ed by the
business.
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Telecom mun icat ion s Survey 2008
Introduction Revenue A ssurance
What is Revenue Assurance?
Revenue A ssurance is a com bination of organizational structure,
processes, technology and inform ation responsible for m onitoring
the revenue process. Its activities are designed to provide assurance
that business processes and system s are perform ing as developed, in
order to:
•Reduce the risk of revenue leakage, by ensuring that risks have
been identi ed and appropriately addressed.
•Prom ote operational ef ciency, by analyzing processes and
system s, identifying gaps and design aw s w hich drive upoperating costs.
•Effectively com m unicate business risks to m anagem ent, in order
to allow inform ed decisions and elim inate surprises (dashboard/
m onitoring).
The Revenue Assurance processes?
The sub-processes of the revenue cycle have been de ned as
follow ing:
Introduction Revenue Assurance
Products &
pricing
Order intake &
provisioning
Fraud prevention
&detection
Data collection
&billing
Interconnect
&roaming
Customer
careCollections
Accounting
&reporting
•Produ cts &pricing : the process from product/pricing concept to
developm ent, testing and go-life.
•Order intake &provisioning : the process of capturing the order
and custom er data, custom er acceptance and provisioning in the
system s/netw ork.
•Fraud prevent ion &det ection: the set of controls and processes
in order to detect and prevent internal and external fraud.
•Data collection &billing : the process of capturing the events in
the netw ork, processing them in the billing system and issuing a
custom er invoice.
•Interconnect &roa ming: the process of handling interconnect
and roam ing invoices and controlling incom ing interconnect and
roam ing invoices.
•Customer care: the process of handling custom er com plaints,
including root cause investigation and the granting of credits,
com pensations and refunds.
•Collections: the process of handling paym ents and m anaging the
custom er account, including dunning and bad debt m anagem ent.
•Account ing &reporting: the process of nancial accounting
and m anagem ent reporting.
The graph below provides an overview of the end-to-end process
fl ow :
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Telecom mu nicat ions Survey 2008
Survey set-up
The survey evolution
This is the 4th tim e that the D eloitte Revenue A ssurance team is
organizing a benchm ark survey for the Revenue A ssurance function
in the telecom m unications m arket. The survey’s topics refl ect the
evolution of the Revenue Assurance function over tim e:
•The surveys of 1999 and 2002 focused on addressing revenue
leakages and im plem enting a structured approach. The key
challenge in the telecom m arket at that tim e w as the transition
from a reactive to a pro-active Revenue A ssurance process.
•O nce the basic processes w ere under control (m ostly data
collections & billing, interconnect & roam ing and accounting
& reporting), the next step w as to im plem ent an end-to-end
Revenue A ssurance process covering the w hole of the revenue
chain. This w as addressed in our survey of 2005: “Revenue
A ssurance, w here to focus?”.
The current trend of m arket convergence results in a m ore global
Revenue A ssurance approach. A lot of the m ajor international
telecom com panies are consolidating their local efforts and best
practices to a w orldw ide approach. The goal of this year’s survey
is to analyse the m aturity level of the Revenue A ssurance function
on EM EA level and to provide a benchm ark w ith respect to the
organization of the Revenue A ssurance function, its costs and
num ber of FTEs. This should allow the telecom com panies to
benchm ark their ow n perform ance on an international level and
to identify the international best practices and the m ain trends of
Revenue A ssurance w ithin the EM EA telecom m arket.
Survey set-up
0
5
10
15
20
25
30
Wireless
d a t a
(HSPDA,
GPRS,
I-mode,...)
Internet
(Cable,
Broa dba nd)
Wireline
Voice
Leased
Lines
Wireless
Voice
Wireless
Voice
as an
MVNO
28 28
24
2019
14
10 9
4
Internet
(Wimax)Digi ta l
TV
CAT
TV
0%
5%
10%
15%
20%
25%
30%
35%
< 25 M EUR 250 M EUR -
1.000 M EUR
1.000 M EUR -
5.000 M EUR
32% 32%
26%
10%
> 5.000 M EUR
The participants
Product representation
42 Telco com panies across the EM EA region participated to this
year’s survey. The participants cover a vast m ajority of products
(voice, internet and data) and custom er types (residential and
corporate m arkets). The follow ing graph gives an overview of the
set of products offered by the 42 participating com panies:
Overview of the company size per revenue and per #FTEs
The participating com panies are also representative for the EM EA
telecom m unications m arket in term s of revenue and num ber of
FTEs. Their yearly revenue varies betw een K€ 322 and
K€ 11.531.000 w hile the com pany sizes vary betw een sm aller
Telco players and large m ultinational organizations. The table below
provides an overview :
The products offered by the survey participants
Revenue in EUR for participating companies
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Telecom mun icat ion s Survey 2008
Survey set-up
0%
10%
15%
20%
30%
35%
40%
45%
< 1.000 < 5.000 < 20.000
42%
32%
18%
8%
> 20.000
25%
5%
Geographical representation
For analysis purposes w e clustered the participating com panies into
geographical areas:
•W estern Europe (19 com panies): U K, Belgium , Italy, Spain,
The N etherlands and G erm any;
•C entral Europe (9 com panies): A lbania, Poland, C zech republic
and Turkey;
•Eastern Europe (7 com panies): M oldova, Rom ania, Latvia,
Lithuania and A zerbaidjan;
•A frica (7 com panies): Nigeria.
Western Europe: 19
Central Europe: 9
Eastern Europe: 7
Africa (Nige ria): 7
M ost of the survey’s respondents are part of a m ultinational group,
w hich allow s them to bene t from the experience and best practices
available at the various entities.
Company size in #FTEs Geographical representation
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Telecom mu nicat ions Survey 2008
Survey set-up
Survey definitions
The differentiation in m aturity levels is based on the follow ing:
•Ma turity level 1 - Initia l: N o real process is in place. The focus lies w ith a reactive action ( re ghting);
•Maturity level 2 - Repeatable: The process is dependant on individuals, it is inform al and inconsistently applied;
•Maturity level 3 - Defi ned: Revenue A ssurance is de ned and a central part of the organization. Process
m easurem ent, quality assurance and detective controls are in place;
•Mat urity level 4 - Mana ge d: Revenue A ssurance is m easured (KPI dashboard) and issues are detected in an early
stage (ongoing testing, preventive controls). The responsibilities for Revenue A ssurance are m ore decentralized
through the organization;
•Ma turity level 5 - Optimized : A dvanced m ethods are used and feedback into the process is optim al (e.g. cost
assurance, custom er / product pro tability analysis).
Initial
(Ad hoc)
No RA processes
processes
(Ad hoc)
No RA processes
Repeatable
Defined
Managed
Optimized
Overview of Revenue Assurance maturity levels
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Telecom mu nicat ions Survey 2008
The survey results
Sim ilar to the results of our previous surveys, the Revenue A ssurance m anager typically
reports to the Finance director. Finance has traditionally been a sponsor of the Revenue
A ssurance activities given its experience and buy-in w ith respect to risk m anagem ent and
internal control.
W e perform ed a sim ilar analysis for the com panies w here the Revenue A ssurance activities
are perform ed by several departm ents (29% of the participant organizations).
W e noted that the Finance departm ent is alw ays involved. The IT and N etw ork O perations
departm ents provide the necessary support to cover the process chain.
Number of employees in the Revenue Assurance department
For benchm ark purposes, w e com pared the num ber of FTEs w orking in the Revenue
A ssurance departm ent to the yearly revenue generated by the com pany.
O n average, the Revenue A ssurance departm ent em ploys about 0,05 full tim e equivalents
per 10 m illion EU R revenues.
0,00
0,15
0,20
0,25
N i g e
r i a
E a s t e r
n E u
r o p e
a n c
o u n t
r i e s
6,05
0,21
0,07
0,040,03
0,02 0,02
0,5
0,10
0,01
0,05
U K
C e n t
r a l E
u r o p
e a n c o
u n t r i e
s I t a
l y
S p a i
n
B e n e
l u x
G e r m
a n y
G r a n
d T o
t a l
FTEs per EUR 10 mio revenue
0%
50%
60%
70%
80%
90%
100%
Fina nce IT Netw ork
opera t ions
Customer
opera t ions
Ot he r Le g al &
Regula tory
100%
76%
67%
50%
42%
33%
17% 17%
Internal
audi tBilling
department
10%
20%
30%
40%
Revenue Assurance activities within the organisation
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Telecom mun icat ion s Survey 2008
The survey results
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There is a clear correlation betw een the num ber of FTEs em ployed by a Revenue A ssurance
function and its m aturity level. The graph below illustrates this evolution:
Initially, w hen revenue leakages are identi ed w ithin the com pany, a num ber of em ployees
are designated to deal w ith these individual incidents. A dedicated Revenue A ssurance
function does not exist at this point.
A s the root causes of the incidents are investigated, other issues arise. M anagem ent
becom es aw are of the risk and invest in proper Revenue A ssurance controls. The num ber
of FTEs em ployed by the departm ent grow s rapidly at this stage due to the high level of
m anual controls (no autom ation yet) and due to the high visibility of the results of the
Revenue A ssurance activities, w hich are a good business case for m ore resources.
In m aturity stage 3, the scope of the Revenue A ssurance activities is enlarged: the accuracy
and com pleteness of the invoice is no longer the sole concern. The Revenue A ssurance tools
available at this point do not cover the entire value chain. A dditional resources are required
to acquire an overview of the controls in these processes and to m onitor them .
The integration of the different controls and KPIs throughout the value chain, the
developm ent of a set of preventive controls and the autom ation of controls and reports
com pletes the transition of Revenue A ssurance to a stable and repeatable process. A lthough
new products are still added to the scope of Revenue A ssurance and existing processesand system s still often change given the continuous changes of the Telco environm ent, the
num ber of FTEs required w ill therefore stabilize and even decrease som ew hat.
Average total cost of the Revenue Assurance department
W e analyzed the annual cost of the Revenue A ssurance departm ent, i.e. the outsourcing
costs, operating expenses, contracted services and direct labour costs. The acquisition and
m aintenance costs of the Revenue A ssurance tools w ere not included in this analysis.
Maturi ty 1 Maturi ty 2 Maturi ty 3 Maturi ty 4 Maturi ty 5
Immature RA
processes
Mature RA
processes
# FTEs
Revenu e Assura nce FTEs vs. mat urit y level
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Telecom mu nicat ions Survey 2008
The survey results
The average cost for the survey population am ounted to 0,025% of the total com pany
revenue.
A further breakdow n of the various cost types reveals that the vast m ajority of the costs
can be attributed to direct labour costs (68% ). O ther signi cant costs are contracted
services (18% ) and operating expenses (13% ). O utsourcing costs (1% ) can be considered as
im m aterial for m ost of the participating telecom com panies.
W e noted that com panies w here the Revenue A ssurance activities are scattered across the
various departm ents, lack an overview of the total num ber of FTEs w orking on Revenue
A ssurance activities and of the total cost of these activities.
When were the Revenue Assurance activities formally developed?
The participating Telco com panies indicated w hen they form ally started the Revenue
A ssurance activities. The graph below also includes the results for the com panies w here the
revenue activities are not centralized via a dedicated Revenue A ssurance function.
0,000%
0,200%
0,250%
N i g e
r i a
E a s t e r
n E u
r o p e
a n
c o u n
t r i e
s
C e n t
r a l E
u r o p
e a n
c o u n
t r i e
s
0,195%
0,068%
0,030% 0,027% 0,024% 0,021% 0,004% N/A0,050%
0,150%
0,025%
U K
S p a i
n
B e n e
l u x
G e r m
a n y
I t a l y
A v e r
a g e
0,100%
Cost of the RA department vs. company revenue
0%
20%
40%
60%
80%
100%
100 78
22
64
36
76
23
2
48
14
2
36
36
18
46
68
13
18
76
19
2
2
N i g e
r i a
E a s t e r n
E u r
o p e a
n
c o u n
t r i e
s U K
B e n e
l u x
C e n t r a l E
u r o p
e a n
c o u n
t r i e
s S p
a i n
G e r m
a n y
A v e r
a g e
Outsourcing fees
Operating expenses
Contracte d service
Direct labour
Cost breakdown per country / region
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Telecom mun icat ion s Survey 2008
The survey results
For the entire EM EA region, the Revenue A ssurance activities started on average 3,5 years
ago. 2 com panies even started their Revenue A ssurance activities 13 years ago, w hile forothers this is only a few m onths.
The U K and the C entral European countries in the scope of our survey clearly have a longer
history in Revenue A ssurance. There is a correlation betw een both as a large part of the
survey participants in the C entral European region have U K-based global headquarters. A s
such, they w ere able to bene t from the experience and best practices provided by their U K
headquarters.
B. Scope of the Revenue Assurance department
This section of the survey provides details on the activities of the Revenue A ssurance
function: the processes in scope of the Revenue A ssurance and the type of activities
perform ed.
Processes in scope of the Revenue Assurance department
To assess the scope of the Revenue A ssurance activities for the participating Telco com panies, w e
asked the respondents to indicate the processes in scope of their Revenue A ssurance activities.
The data collection & billing and the interconnect & roam ing processes are the core
processes for m ost of the Revenue A ssurance departm ents. This result is sim ilar to previous
survey ndings w here w e noted that in m ost com panies Revenue Assurance starts w ith the
m onitoring of the com pleteness and accuracy of the invoices to the custom ers.
O nly 24% of the respondents have the entire value chain in the scope of their Revenue
A ssurance activities.
0%
20%
40%
60%
80%
100%
83%
P r o d
u c t &
P r i c i
n g
O r d
e r I n t a k e
&
p r o v
i s i o n
i n g
F r a u
d p r
e v e n
t i o n
&
d e t
e c t i o
n
D a t a
c o l l e
c t i o
n &
b i l l i
n g
I n t e
r c o n
n e c t
&
r o a m
i n g
C u s t o m
e r c a
r e
C o l l e
c t i o
n s
A c c o
u n t i n
g &
r e p o
r t i n
g
90%
70%
50%
30%
10%
83%
76%
98%
90%
57%62%
83%
Processes in scope: RA department vs dispersed RA activities
0,00
4,00
5,00
6,00
U K
C e n t
r a l E
u r o p
e a n
c o u n
t r i e
s
5,33
4,87
3,60 3,50 3,39
2,822,50
2,00
1,00
3,00
3,46
B e n e
l u x
S p a i
n
G e r m
a n y
N i g e
r i a I t a l y
E a s t
e r n E u
r o p e
a n
c o u n
t r i e
s
A v e r
a g e
2,00
Avg. number of years Revenue Assurance activities
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Telecom mu nicat ions Survey 2008
The survey results
The Revenue Assurance activities
N ext to the processes in scope, w e analysed the type of Revenue A ssurance activities
perform ed by the participating com panies. These activities can be divided into 5 clusters:•“Basic”Revenue A ssurance tasks, i.e. standard controls and m onitoring,
m anagem ent reporting, project m anagem ent and team m anagem ent;
•O ptim ization initiatives to enhance the Revenue A ssurance function;
•Tasks related to cost assurance;
•Sarbanes O xley com pliance activities;
•O ther, com pany-speci c, activities.
O n average about 70 % of the tim e is spent on “basic”Revenue A ssurance tasks.
A signi cant am ount of effort also goes to the revenue optim ization initiatives (16% ).
The latter is how ever often lim ited to the identi cation of quick w ins rather than the
developm ent of a continuous and structured process w hereby Revenue A ssurance analyses
assist in the de nition or ne-tuning of the business strategy.
A bout 52% of the survey’s respondents have participated in a Sarbanes O xley program .
H ow ever, the tim e spent on SO X by the Revenue A ssurance function is lim ited as the
Revenue A ssurance activities are by nature not operational.
W e also noted 2 respondents w here the Revenue Assurance departm ent w as activelyinvolved in the closing process or in the m onthly nancial reporting. The Revenue Assurance
M anager function should be an assurance function. W e som etim es see com panies w here
this function is operating certain controls. This often results in a lack of ow nership by the
business and in the Revenue A ssurance departm ent being blam ed w hen som ething goes
w rong.
0%
20%
40%
60%
80%
100%
52 81 80 65 85 65 60 78
124
25 15 12 15 11
15
3
2325
10
2
B e n e
l u x
C e n t
r a l E u r
o p e a
n c o
u n t r i e
s
E a s t
e r n E
u r o p
e a n
c o u n
t r i e
s
G e r m
a n y
I t a l y
N i g e
r i a
S p a i
n U K
Other
SOX
Cost Assurance tasks
Revenue optimization
Basic RA tasks
A v e r
a g e
70
13
26
95
64
4
56
16
10
Overview of activities per country / region
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Telecom mu nicat ions Survey 2008
The survey results
Impact of SOX programs on the maturity of the processes
A s 52% of the participating Telco com panies have im plem ented a SO X program ,
w e investigated the im pact on the assessed m aturity level of the processes.
The SO X program has an im pact on the m aturity level of the order intake & provisioning and
the C ustom er Care processes. The m aturity level of the collections process also increases
w ith the im plem entation of a SO X program . These are the processes that w ere often not
part of the scope of the Revenue A ssurance activities.
D. Estimated revenue leakage
To perform an assessm ent on the effectiveness of the Revenue A ssurance activities, w e m adesom e analyses on the estim ated revenue leakages. Additionally, w e investigated the revenue
leakages on product level in m ore detail.
Estimated revenue leakage per country / region
The table below gives an overview (in % of revenue) per EM EA region of the estim ated
revenue losses.
The revenue leakage is estim ated to be on average about 1,5% of the total com pany
revenue. For the entire survey population, the estim ated revenue leakage varies betw een
0,05% and 5% .
2
2,4
2,6
P r o d
u c t &
P r i c i n g
O r d
e r I n t a k e
& p r
o v i s i
o n i n
g
F r a u
d p r
e v e n
t i o n
& d e
t e c t i o
n
D a t a
c o l l e
c t i o
n & b i l l i
n g
I n t e
r c o n
n e c t
& r o
a m i n g
C u s t o m
e r c a r e
C o l l e
c t i o n s
A c c o
u n t i n
g &
r e p o r t i
n g
SOX Progra m
3,0
3,4
3,8
3,6
3,2
2,8
2,6
2,2
2,5
3,1
3,0
3,1
3,6
3,4
3,1 3,1
2,6
3,0 3,0
3,4
3,2
3,0
No SOX Progra m
2,8
Impact of SOX on process maturity
0,00
0,50
1,00
1,50
2,00
2,50
3,00
Nig eria Spa in Benelux Cen tra l
European
countries
UK It a ly
2,40
1,75 1,68
1,421,30 1,25
1,10
0,78
1,51
Eastern
European
countries
Germany Grand
Tot al
Estimated revenue leakage per country / region
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Telecom mun icat ion s Survey 2008
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Revenue leakage on product level
The table below gives the estim ated revenue leakages on product level. O nly the core
products of the respondents have been included in this analysis.
Revenue A ssurance has alw ays paid considerable attention to the voice products due to the
usage based billing. These efforts pay-off as the graph clearly indicates.
The data products are still fairly lim ited in use and generally don’t have com plex billing
structures. That explains the good result (1% for w ireless data) for this product set.
The revenue leakages are estim ated the highest for the internet products (respectively 2,4%
for W i-m ax and 2,1% for the regular internet product).
The correlation between Revenue Assurance maturity and estimatedleakage
O ur survey dem onstrated a clear negative correlation betw een the m aturity of the Revenue
A ssurance processes and the estim ated revenue leakage. O n average, a m aturity increase of
1 point on a scale of 5 (e.g. from m aturity level 1 to m aturity level 2) results in a decrease of
estim ated revenue leakage of about 1% .
0,00
0,50
1,00
1,50
2,00
2,50
Internet
(Wimax)
Internet
(Cable,
Broadband)
Leased
Lines
Wireline
Voice
Wireless
Voice
Digita l TV
2,38
2,121,99
1,56 1,52
1,20
1,02
0,74
Wireless
d a t a
(HSPDA,
GPRS,
I-mode,...)
Wireless
Voice
as an
MVNO
Estimated revenue leakage per product
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E. Revenue Assurance tools
In this section of the survey, w e analysed to w hat extend the Revenue A ssurance activities
are supported by the necessary tools. W e also assessed their cost-bene t, i.e. the averagecost of the tools com pared to their im pact on the revenue leakage.
What are the tools available to the Revenue Assurance function and wheredo they come from?
The graph below gives an overview of the type of Revenue A ssurance tools available to the
participating Telco com panies. W e distinguish 4 kinds of tools used by the different Revenue
A ssurance departm ents:
•Reconciliation tools;
•Fraud m onitoring tools;
•Test call generators;
•Various auditing tools.
The graph also indicates w hether the tool w as developed in-house or if it w as an external
acquisition.
Tools are m ainly used to autom ate reconciliations perform ed betw een system or process
data. A s these reconciliations are generally com pany and process speci c, m ost of them
(40% ) are in-house developed.
This is not the case for the fraud m onitoring tools, the test call generator and the auditing
tools: they are generally less available to the Revenue A ssurance function and m ost of them
are purchased from outside vendors.
The average appreciation of the tools is rated on average at 3,7 on a scale of 5 by theparticipants. W e did not notice a signi cant difference betw een in-house developed and
externally purchased tools.
0%
60%
70%
80%
90%
100%
26%
Reconciliation
toolsFraud monitoring
tools
Test call
genera to r
Auditing tools
(e.g. ACL)
No tool available
Combination of in-house developed
and externally acquisitioned
10%
20%
30%
40%
50%
In-house d eveloped
Externa l acq uisition55%
64% 71%
40%
12% 12%
10%
19%26% 24%
17%
14%
7%
2%
Revenue Assurance tools
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The average cost of the Revenue Assurance tools
The average total cost of the softw are acquisition for Revenue A ssurance tools is K€ 15.442,
w hile this is K€ 4.252 for the hardw are acquisition. The average yearly m aintenance cost for
the Revenue A ssurance tools am ounts to K€ 6.601.
The impact of tools on the estimated revenue leakage
The graph below illustrated the im pact of the use of tools on the estim ated revenue
leakages: the coloured bar on the left represents the estim ated revenue leakage for Telco
com panies w ith supportive tools, w hile the bar on the right indicates the estim ated revenue
leakage for com panies that lack the necessary tools.
There is a clear correlation betw een the use of Revenue A ssurance tools and the estim ated
revenue leakage: com panies w ith tools estim ate their revenue leakage to be about 1,2%
w hile this is 2,6% for the others. This result is also correlated to the m aturity of the Revenue
A ssurance processes: m ature com panies are m ore likely to have the appropriate tools
available w hile in turn their revenue leakage is also low er on average.
0
0,5
1
1,5
2
2,5
NoYes
3
1,21
2,6
Estimated leakages vs. usage of tools
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Telecom mu nicat ions Survey 2008
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22
F. Revenue Assurance reportingW e assessed the level of (dashboard) reporting available to the participating telco
com panies. A dditionally, w e also assessed w hether the reporting on the Revenue A ssurance
realizations covers both leakage detection and prevention.
Availibility of dashboard reporting
A bout 69% of the respondents currently have a Revenue A ssurance m onitoring dashboard
available. G enerally, the m aturity of the Revenue A ssurance activities has reached a certain
level before a m onitoring dashboard is im plem ented. The participating telecom m unications
com panies that have im plem ented a dashboard reporting started w ith Revenue A ssurance
on average 4,3 years ago w hile this is 2,2 years for the com panies w ho are lacking a
dashboard m onitoring.
In line w ith the other survey results, the K PIs that are m onitored are m ostly related to the
data collection and interconnect & roam ing processes. KPIs are often not available for thecustom er care and product & pricing processes w ithin the Revenue Assurance dashboard.
M ost dashboards are updated on a daily basis (54% ) or on a m onthly basis (25% ). O nly 4%
of the available dashboard reports are available in real-tim e.
Measurement of the Revenue Assurance realizations
The pie chart indicates the percentage of participating com panies w here the reported
Revenue A ssurance realizations:
•A re not reported;
•Relate to detected revenue leakages;
•Relate to prevented revenue leakages;
•Relate both to detected and prevented revenue leakages.
Leakage detection
Leakag e preventionBoth
None
14%
17%
19%
50%
Revenue Assurance realizations measurement
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23
14% of the survey’s participants have no reporting available on
their achievem ents, w hile for 17% this is lim ited to reporting on
the leakage detected via the control set. 69% of the com panies are
capable to report the revenue leakage prevented by the Revenue
A ssurance function to m anagem ent.
Dashboard reporting vs. estimated revenue leakage
W e investigated the correlation betw een the availability of dashboard
reporting and the estim ated revenue leakage. The bar on the right
indicates the estim ated leakage for com panies w ith m onitoring
reporting, w hile this is not the case for the bar on the left.
A substantial drop of the estim ated revenue leakage can be noted
for com panies w ith dashboard m onitoring: from 2,46% to 1% for
com panies w ith dashboard reporting. The root causes are tw ofold:
•First of all, less m ature telecom com panies often have not yet
developed a Revenue A ssurance dashboard reporting, w hile in
turn their revenue leakage is still relatively high com pared to m ore
m ature com panies.
•Secondly, the lack of proper dashboard reporting seem s to lead to
a m ore negative perception of the revenue leakage perform ance.
This is because com panies w ithout dashboard reporting are m ore
reliant on individual incident reporting (e.g. fraud cases, m ajor
billing problem s, etc.). Since this type of reporting is focused on
quantifying the nancial im pact of incidents rather than reporting
the overall perform ance, the general assum ption of the Revenue
Assurance perform ance w ill be m ore negative.
G. Future Challenges
The participating com panies also provided us w ith their current
and future top priorities. These priorities w ere clustered into 4
m ain areas: basic Revenue A ssurance, cost assurance, revenue
enhancem ent and optim ization initiatives and the im plem entation
of a SO X com pliance program .
The spider graph below gives the results for both the 2007 and
2008 priorities, w hereby 0 is a low priority and 5 is a top priority.
A lthough the “basic”Revenue A ssurance tasks rem ain the top
priority in 2008, w e note a tendency for Revenue A ssurance
functions to also start focusing on cost assurance and/or revenue
enhancem ent.
Revenue
enhancement /
Optimization
initiatives
Cost
Assurance
Basic Revenue Assurance
SOX
Priority 2007
Priority 2008
5
4
3
2
1
0
Priorities for 2007 and 2008
0
0,5
1
1,5
2
2,5
Estimated leakage
with monitoring
Estimated leakage
without monitor ing
3
2,46
1
Impact of dashboard monitoring on revenue leakage estimate
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Contact informationCore team members
Laurent Vandendooren
Partner
D eloitte Enterprise Risk Services
lvandendooren@ deloitte.com
Tel. + 32 2 800 22 81
Tom Van Cauw enberg e
Partner
D eloitte Enterprise Risk Services
tvancauw enberge@ deloitte.comTel. + 32 2 800 22 79
Nico Vandamme
M anager
D eloitte Enterprise Risk Services
nvandam m e@ deloitte.com
Tel. + 32 2 800 23 25
For m ore inform ation about this study, contact us via e-m ail: nvandam m e@ deloitte.com
25
Telecom mun icat ion s Survey 2008
C ontact inform ation
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