How to Save Revenue with Billing Verification?

Elias Chachak, VP Business Development and Strategic Marketing cVidya Networks Inc.

Stéphane Buigues Strategic Alliance Business Manager Highdeal

Transaction Reporter: Could you define Revenue Assurance?

Stéphane Buigues: The short, simple definition is that the role of Revenue Assurance is to make sure you are not losing money. A longer definition that comes from the Telemanagement Forum is that Revenue Assurance is the activity of using data quality and process improvement methods to improve profits, revenues and cash flows without influencing demand. The important concept is that you are gaining revenue by doing things better rather than getting more revenue from customers or services.

TR: What are the most important priorities for Revenue Assurance?

Elias Chachak: When discussing Revenue Assurance, we can identify a few major areas of focus. Providing a revenue monitoring tool for the full switch-to-bill process, making sure the actual revenue stream matches the expected, and making sure actual partner costs matches the expected are all important priorities. Other major areas of focus include verifying that all discounts and rating plans are implemented correctly, that services are rated and charged accurately from the customer, and making sure that the data in the OSS, BSS, and Network is aligned and synchronized. It is also crucial that operators be notified immediately of exceptions in order to avoid leakages. Lastly, it’s essential that the system help the carrier to reclaim the lost revenue and identify the root cause of revenue leakage.

TR: In general, where and how do revenue leakages commonly occur?

Elias: In the telecom environment, revenue leakages can result for a number of reasons in different areas:
• Mismatch between business systems (BSS, e.g., CRM, Billing) and operational systems (OSS, e.g. inventory, network) where definitions of customers and services do not match, can result in errors in billing customers or in some cases not even billing them at all.
• Problems in definitions of products and price/rate plans can result in further errors in billing customers (e.g., a complex price plan which has different rates for different hours of the day or which grants discounts after a certain number of minutes)
• Problems in the definition of the billing flow resulting in losing transactions and records (xDRs)
These cases may occur due to various causes such as human errors, incomplete or erroneous business processes, software bugs, provisioning failures, data integrity problems, etc.

Stéphane: In addition, it is easier for errors to occur in billing systems with complicated, non-user friendly interfaces such as with older billing software that uses tables or rule based systems to create price plans. It is important that the billing system and the billing verification system are able to intuitively represent the business model as accurately as possible. The more complicated the translation of the pricing into code, the more room there is for errors that cause revenue leakage.

TR: Analysts estimate the revenue assurance market will grow from an estimated $420 million dollars in 2004 to an estimated US$495 million in 2008. What is driving this growth within the telecommunications industry?

Elias: First and foremost, the telecommunications industry is going through a quiet revolution and evolution as there is a shift from legacy to next generation networks and the introduction of new and advanced services (e.g. VOD, mobile content services, IPTV, FMC etc.). As a result of this revolution/evolution, services are much more complex, meaning that a service can flow over multiple networks and domains (e.g. an FMC domain), big portions of some of the services (e.g. mobile content) are no longer within the operator domain and are being supplied as part of a content agreement with a 3rd party, and interactive services are being provisioned on the fly by the customer (e.g. VOD and other interactive services). And of course there is also bundling.

Stéphane: The telecommunications market has been destabilized by the consolidation of telecom, cable TV, satellites, consumer electronics, broadcast TV, and the internet. Five years ago the majority of the market was controlled by large incumbent operators, but that is no longer the case. Fierce market competition is driving incumbents and new entrants to look to improving the way their systems work in order to gain more revenue without raising service costs for their customers.

Elias: Exactly, this intense competition is also driving operators to offer longer trial periods, which is allowing end-users to frequently disconnect, upgrade, or re-connect their service. This dynamic, competitive environment requires tighter monitoring of business processes and the resulting errors. All of the above explains why telecom operators are deploying much more sophisticated Revenue Assurance tools which allow them to cope with such services and such evolution.

TR: Where and how do revenue leakages occur within pricing, rating, and billing systems?

Elias: Telecommunications providers report that they experience 9-15% of annual revenue leakage, of that it is estimated that 2-3% takes place during the rating billing process. Revenue leakages can occur within the pricing process for a number of reasons. One example is with complex price plans where you can multiple dimensions and pricing methodologies (e.g. a price plan according to user groups, with built-in usage discounts and specific promotions like free SMS during the evening hours). The definition of such a price plan and later the association of users to the price plan can result in revenue leakage. A second example is, when defining a new product in the billing system, it is very important to keep consistency with the definitions in the operational systems (e.g. inventory) . Differences between the systems can result in incorrect billing.

TR: What are some of the solutions you can propose to avoid these leakages?

Stéphane: There are some practical solutions that can be deployed to avoid revenue leakage. These might include better training on the BSS environment. Whether it is on the implementation of the main environment or on the verification system, the more training the team has had the less chance there is of them making mistakes. It can also mean having systems and processes that both Marketing and IT can use to communicate efficiently in order to avoid mistakes that result from translating marketing’s ideas into code. Secondly, leakage can occur when you are verifying the pricing plans with the billing verification application. You must manually input the production pricing plan into the verification system by re-configuring it manually, not by copying it from the main environment and paste it into the verification system. Doing this might seem handy and quick, but it can also mask the very rating errors that you are trying to spot.

Elias: cVidya is taking a proactive approach in order to avoid leakage before it affects the operational network. One solution would be to use a rating and billing verification tool, incorporating Highdeal’s technology, that allows the operator to test his rating and price plans before they are deployed and monitor them afterwards in order to find the potential errors and leakage points. The rating engine also allows for the rating verification of sampled collected events (sample of CDR’s, IPDRs transactions, etc.) and it can be used by a Revenue Assurance user to implement the rating plans in the Highdeal engine which runs in parallel with the operator’s main rating system.

TR: Who tends to drive revenue assurance projects in operators today? The IT Department, the Finance Department, or someone else?

Elias: Driving forces for Revenue Assurance within organisations can vary. Finance Departments are the most common drivers since they are usually in charge and accountable for Revenue Assurance, but in some cases, it will be the IT Department who is more involved. Having said that, regardless of the ownership of the process, full involvement of both departments (Finance and IT) is essential to the success of the project. Both need to be involved to make sure that the Revenue Assurance system will be defined correctly, usually with Finance, and will be deployed and connected to the right systems and processes, usually IT.

TR: Can you give any case study of the successes you have had on revenue assurance projects?

Stéphane: cVidya integrated Highdeal Transactive® into their MoneyMap® Revenue Assurance solution and have recently announced their first customer to successfully launch their new solution. We see a lot of interest in the market and we are glad to be part of such innovative product.

Elias: Swisscom Mobile started to aggressively market a new Price Plan (PP) called “Swiss Liberty”. This is a special PP with flat fee per call for up to 1 hour with various roaming options and international rates. Swisscom planned to test it before entering mass production using MoneyMap®/Rating and Billing Verification. The project included interfaces to their BEPPI/Portal Rating system and with the Siebel CRM. It was completed in 3 months.

TR: Can you tell us more about cVidya, and how is cVidya different to other Revenue Assurance companies?

Stéphane: cVidya offers a comprehensive Revenue Assurance solution for fixed, mobile, and triple-play communication service providers.

Elias: We specialize in Revenue Assurance for data/IP services and Rating & Billing Verification. Our sophisticated analysis tools allow for quick implementation due to flexibility in configuration via tables, rules, and scripts.

TR: Why did cVidya choose Highdeal technology to build its Billing Verification solution and how it has been integrated into cVidya’s Money Map Suite?

Elias: cVidya examined rating engines by several vendors. We chose the Highdeal solution because of its ease-of-use, flexibility, GUI, features, price, testing & simulation capabilities. The Highdeal business model that is based on working with resellers partners was very beneficial. Right now in the cVidya Money Map Suite, sample CDRs are sent to the rating engine of Highdeal and processed there. The rated CDRs are then compared with the operator’s rated CDRs and the discrepancies are reported and investigated.

TR: What was your decision process when looking for a solution partner?

Elias: Main issue was the flexibility and ease-of-use in defining price plans, without compromising the required wide range of capabilities including support for bundles, allowances, discounts, credits, pro-ratios, roll-overs, etc.
The Highdeal decision-tree based rating engine provides an intuitive and user friendly GUI. In addition, the testing and simulation tools were a big advantage. Flexibility on the solution pricing was a major factor. Scalability is not a consideration right now since the verification is done on a sample of events only, but we also have confidence in the ability of the Highdeal solution to scale up to very large volumes while keeping overall TCO down.