Creating the Optimal Revenue Assurance Program for Telecommunications Companies

Rarely do such remedies solve the underlying EBIT issues. What is needed is a comprehensive, proactive approach to revenue assurance—one that focuses equally on organizational, process and technology changes to optimize performance.

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Revenue leakage is a remarkably large problem at most service providers, representing a major opportunity for improved EBIT, cash flow and profitability. But, in our experience, most service providers are either overlooking the opportunity or they have revenue assurance departments that only address part of the problem.

So what can service providers do? Accenture’s answer comes from exploring the link between finance mastery and high performance.

According to our experience, the finance organizations of high-performance businesses tend to get several competencies right. These include establishing a value-centered culture, leveraging technology for maximum advantage and building finance employees’ abilities to understand new business models and how to restructure revenue, cost and capital resource streams.

Companies can apply a similar competency set when it comes to developing a revenue assurance program. Specifically, to deliver the greatest benefits—and the longest-lasting effect—revenue assurance programs should incorporate organizational, process and technology components as equal contributors to a comprehensive solution. Further, they should extend their improvements beyond the traditional revenue cycle. That is, revenue assurance principles should be incorporated in all areas that can influence earnings degradation—from product and service design to client segmentation to network configuration.

• Fix current losses and identify future potential leakage points.
  
  
• Keep the issue of revenue leakage high on the management agenda.
  
  
• View revenue leakage as a problem that requires cross-functional capabilities.
  
  
• Have a senior executive—usually the CFO—that takes active ownership of the event-to-cash pipeline.
  
  
• Understand that revenue assurance is more than a temporary improvement in working capital, but an ongoing benefit in terms of improved EBIT and, ultimately, shareholder value.
  
  
• Establish a set of end-to-end performance measures.
  
  
• Monitor key points along the entire customer lifecycle—from initial customer order through cash collected.

True revenue assurance requires ongoing vigilance. It is not an information technology audit or a software package implementation.

It requires continuous monitoring and improvement of key performance indicators, well-designed processes and automated software tools. And it requires strong program management to achieve service and operations excellence. Accenture offer such a solution through Accenture Revenue Assurance Solutions.

While the exact form of revenue assurance a service provider adopts will vary by organization and objective, we believe communications companies should focus on three areas simultaneously:

• Organization. Companies wanting to be revenue assurance leaders should focus on building skills in core areas such as accounting, reconciliation and process management. Further, they should organize and manage their finance organizations to deliver optimal value. This means creating an organizational structure and reporting relationships that support revenue assurance objectives. Finally, they need to develop performance metrics that drive behavior—not only within departments, but also across departments.
  
  
• Process. Companies striving to become leaders in revenue assurance should review end-to-end processes, implement new processes to control critical areas and measure and monitor key checkpoints. Once these improvements are in place, revenue assurance employees can introduce reporting, key performance indicators and auditing capabilities. In some cases, revenue assurance teams even play a role in product development to determine how new products and services will affect performance management metrics across the organization.
  
  
• Technology. Business intelligence tools, which provide enhanced visibility into an organization, have become quite powerful. They enable companies to manage and mine large amounts of data. They also provide dashboard capabilities, reporting features and built-in triggers that identify problems as they occur. Business intelligence tools are particularly important to companies entering new market areas.
  
  

Most service providers are fully aware of their bad debt level, but few can accurately track their lost revenue percentage. And even though most providers cite revenue assurance as a high priority, their actions indicate otherwise because most current revenue assurance programs are reactive in nature. That is, they spring into action only after detecting a significant revenue loss. They do little to prevent revenue leakage from occurring in the first place.

This scenario has to change. Communications companies cannot afford to wait for revenue leakage to appear on their financial statements; nor can they wait for faulty internal processes to negatively impact the customer experience. If they do, they can be sure that their competitors will quickly pass them by.

The good news is that, through effective planning and execution, companies can take a stepped approach that allows a comprehensive revenue assurance program to fund itself. Revenues recaptured during the first step can be reinvested to fund the second step, and so on. In this way, the revenue assurance organization not only pays for itself, but it can actually become a profit center.

In the end, the winners in the revenue assurance race will be those companies that constantly examine their organization, processes and technologies for leakage and opportunities to drive earnings. In short, they will be the companies that continually bolster their bottom lines by securing all the revenue they can—especially the revenue they have already earned.

Learn more about Accenture Billing and Revenue Management Solution for the communications industry