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Revenue leakage can be found anywhere along your revenue generation value chain.
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.
Learn more about Accenture’s services, research and client successes for the communications industry
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 TeamThe 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 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:
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
March 29, 2011
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