Revenue Assurance: Whose Responsibility Is It?

Companies most successful in pinpointing their leakage hot spots have assembled a cross-functional revenue assurance team. Further, they’ve typically appointed the CFO as the one to lead this team—and the business—to higher levels of performance.

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Many companies are quick to cite their billing division as primarily responsible for revenue leakage. Unfortunately, in the vast majority of cases, this is incorrect. In fact, the sources of revenue leakage are numerous and they happen across the entire value chain (see Diagram 1).

The nature of the leaks, where they occur and how much is lost varies significantly from organization to organization. This means there’s no one-size-fits-all solution.

Many companies have established revenue assurance departments to deal with the issue. Unfortunately, these programs tend to focus on one area—most notably, billing. While the billing process can be a prime culprit, Diagram 1 illustrates that the potential for leaks is not limited to one department or activity. The potential leakage points and causes are virtually endless. Thus, programs that address one—or even several—of those leakage points will undoubtedly miss other opportunities to recapture revenue, limiting the payoff from any such revenue assurance program.

		The most successful revenue assurance programs, by contrast, are also the most comprehensive. They cover the entire order-to-cash cycle. They pay special attention to each hand-off point from one process to another. They even look beyond the order-to-cash cycle to drive improvements in product/service design, customer segmentation and network efficiencies—areas that can directly or indirectly impact earnings (see Diagram 2). Accenture Revenue Assurance Solution is one example.
Today when operators deal with increased services complexity, growth of the IP based services and very demanding time-to-market timeframes Revenue Assurance function should be very effective to minimize revenue leakages ‘not to late’. Accenture offers a full scale Revenue Assurance program that we constantly tune based on our worldwide experience to provide maximum effectiveness to our clients.

The consequence of revenue leakage affects the entire organization. Thus, the solution must be as pervasive as the problem, addressing all the underlying organizational, process and technology issues. In short, the burden of fixing the problem should fall to the entire organization.

A dedicated, cross-functional team is in the best position to drive a comprehensive revenue assurance strategy. Such a team establishes a coherent approach to recapturing revenue. It oversees the program’s implementation. And, most importantly, it creates an environment of shared responsibility.

Characteristics of a High-Performance Team
The revenue assurance team’s task is complex. It must, for example, conduct sophisticated analysis involving huge volumes of usage, billing and reference data from multiple sources. It must also deal with the silo mindset that usually exists between different departments. Finally, it must be able to identify all potential sources of—or contributors to—revenue leakage. That means the team needs to be able to assess internal weaknesses in policies, processes, controls and systems.

Several factors can help ensure a revenue assurance team’s effectiveness.

• The team has to be multi-disciplined. The job calls for detailed technical expertise and sound operational knowledge. It also calls for relevant cross-functional skill sets that cover a number of areas—product development, sales and customer service, credit screening, billing, fraud management, to name a few.
  
  
• The team must be able to prioritize and implement remedies in key high-risk areas. By setting realistic and achievable targets, the team’s early successes will garner stronger support as it expands its revenue assurance initiatives.
  
  
• The team must be able to analyze actual usage records, revenue-impacting data and business rules. Too often, revenue assurance teams focus on traditional high-level process audit reviews. This approach is ineffective in detecting key sources of revenue leakages such as internal fraud, flawed business rules, system configuration errors and missing usage records. Moreover, revenue leakage will not be readily apparent using trend analysis. This is because what is not captured will not appear in monthly reports.
  
  
• The team must instill a strong revenue assurance culture throughout the company. This serves to inspire the appropriate mindset that will balance the need for protecting company profit with achieving customer service excellence and sales targets. Accenture’s experience clearly proves the importance of a value-centered culture. By establishing a culture focused on earnings preservation, finance departments can create significant value for their organizations.
  
  
• Finally, it is vital that the team has senior management sponsorship and support. This will serve two purposes. It will ensure that departments collaborate. And it will give the revenue assurance team the authority to access data for independent assessments.
  
  

The CFO as “Value Generator”
Who should lead the all-important revenue assurance team? The answer is the chief financial officer. Why? The CFO occupies a unique vantage point in the firm:

• Most revenue leakage comes from faulty handoffs between processes. Only the CFO has the organizational visibility to look across all processes to make sure that the holes are plugged.
  
  
• The CFO has responsibility for the integrity of reported numbers—whether revenues or customer and product counts. He or she strives to make these counts as accurate as possible—and reflected in the bottom line.
  
  
• The CFO organization is best situated to use business intelligence gleaned from a revenue assurance program to examine internal business processes on an ongoing basis. This enables them to better understand the levers and drivers of cost. It also equips them to think about the value finance delivers in a new way. Similarly, finance organizations can offer valuable information about how customers and cash flow through company processes. Using this insight, senior management can direct departments across the company to zero in on problem areas in ways that will positively impact the entire revenue management cycle.
  
  

In short, CFOs should think about value in new ways. Equally important, they should think of themselves as visionary strategists who can solve ongoing business problems, not just report on them. Managing a revenue assurance program allows them to do just that.

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