Tuesday, June 22, 2010

Removing Cinderella from Revenue Assurance

I wonder if many of our members have seen Disney’s version of Cinderella. There is a scene at the beginning of this movie that comes to my head whenever I hear stories about revenue assurance departments that are demanded to be everywhere and must clean up as much leakage/mitigate as much risk as possible. Early in the movie Cinderella is stuck at the beck and call of her demanding step-mother and spoiled step-sisters. In the image that comes to my mind she is carrying three breakfast plates (one in each hand and one on her head), feeding the pets, and cleaning the house on the way up to deliver her step-mother’s and step-sisters’ breakfasts. All the while viewers hear shrill “CIN-DER-ELLA’s” being called out with even more (somewhat ridiculous) requests.

Unfortunately, it seems that revenue assurance departments often can be treated the same way. Since they have few well defined boundaries, and it is not really clear on what they do, they get asked to do everything. They balance the assurance of many domains, lines of business, and in all of them they must find/stop as much risk as possible. Not to mention, that if something goes wrong, Revenue Assurance tends to find themselves to blame.

Now to me, this seems quite unreasonable. Depending on the size and depth of a revenue assurance department, there must be a limit to what they are asked to do and where they are asked to go. As mentioned before, the revenue assurance professional must bring integrity to every task and relationship, which is difficult when there is too much to do.

This leads me to the next three GRAPA Principles proposed for 2011: Scope Management, Management’s Appetite for Risk, and Departmental Sovereignty. Together these three Principles help revenue assurance to prioritize, set boundaries, and figure out (and explain) their role in their Telco.

According to Scope Management,

“Revenue assurance is only responsible for the risks to revenues in those domains that have been defined as ‘in scope.’”

And when is an area in scope? According to the proposal for 2011, five things must occur before an area can be considered as “in scope” for revenue assurance, and only then is RA accountable for that area.

An area is in scope when:
• The RA team has been formally assigned responsibility for the area by management
• The RA team has performed a forensic analysis of the domain, and delivered an assessment of the risks discovered and the recommended levels of risk to be considered
• The RA Team has recommended a series of corrections and controls in alignment with management’s appetite for risk
• Management has approved the costs and changes defined by the recommended corrections and controls
• The corrections and controls have been implemented

As you can see, this principle gets at the heart of the role of revenue assurance. As a profession, RA should have a standard way for approaching the functions they will perform for Telco’s – where they will go, and what needs to happen before they can have responsibility for the revenues of a certain domain. When I look at each of the five steps, each seems so important because if revenue assurance is going to be asked to do something, the only way they can do it right (and with integrity) is if they have been heavily involved in the process from the beginning.

So while this revenue assurance story does not end with a glass slipper or prince charming, I imagine it can provide RA professionals with something much more valuable. With scope management, an RA team can establish boundaries for where they should be and when they can be held accountable for revenues and risk. This principle provides revenue assurance with a process for managing the torrential amount of demands that can be asked of them, and reverses the image of Cinderella I explained earlier. With Scope Management (along with Departmental Sovereignty and Management’s Appetite for Risk) the picture of Revenue Assurance is now one of a balanced professional. He/she does not respond to a Telco’s every revenue-related whim, but knows where his/her role and function within the Telco universe.

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