24 November 2017

Revenue Assurance

In the current market context, associated to a constant technological evolution, in which companies face adverse market conditions, the need for profit is always high and since margins are becoming shorter, revenue control gains greater preponderance.

The tendency for companies to have more effective revenue processes, as well as systems that support them is a global reality. To this end, the need to ensure that all revenue generated is received efficiently, in a timely manner, useful and at the lowest cost is a must. It is within this framework that the benefits of implementing a Revenue Assurance solution can be found.

The Revenue Assurance (RA) is a program that can be seen as a mixture of control, audit, technology and Business Intelligence. It was originally created with the goal of controlling and ensuring the processes of revenue and collection in a useful and effective way, contributing decisively to an efficient cash management and business success.

In a simple way, RA uses control points along the cycle of revenue that through procedures and tools of production analysis, allows these control points to be analysed and monitored, and at the same time create initiatives for correction of faults detected during the process, in a logic of continuous review of business processes and systems. The RA aims to use systems to improve operational efficiency and control their inherent risks.

An RA system also allows importing data from multiple platforms into a global repository. Data is then processed in order to identify errors and inconsistencies in the flow of revenue or even highlight opportunities to reduce total costs, allowing the visualization of business processes, saving money in research work and problem troubleshooting, thus allowing effective actions on problems or improvements identified.

 

When implementing an RA system, it is common to identify fraud and loss of revenue.

RA systems are currently a reality in large Telco companies throughout the world. In the present day, not all Telco operators use this technology and as a result continue to lose millions of euros, for example, in services used that are not invoiced. These types of losses are mostly caused by developments in technology and the constant launch of new products and services.

Contrary to what one might think the RA is not just a tool used strictly in the Telcos. There are currently several companies of all kinds of sectors that are using or are taking the first steps in the theme of RA. In practice, any type of company that has a revenue cycle with a minimally defined process can take advantage of setting up an RA.

There are several examples of companies that successfully implemented an RA system and are reaping the benefits of having done so:

• Recently a pan-European operator identified 22 million euros in unbilled services.
• A small operator, after analysing the leased lines by its customers over the past 18 months, concluded that there was sub-invoiced 5.1 million euros.

We can also mention that main global studies estimate that in the sector of Telcos, in average, losses arising from failures in streams of revenue generation may ascend from 3 to 8% of the total annual revenue of an operator, depending on the level of effective controls of each operator.

Conclusion

Nowadays, companies can take immediate benefits with the implementation of a RA system with improvement of these processes:

• Correct identification of Revenue sources.
• Revenue losses identification and understanding.
• Assertive billing process execution.
• Correct identification of stakeholders and workflows during Revenue cycle.

As for the economic benefits, the increase in invoiced/received revenue and the recovery of lost revenue are some of the KPIs where we see major improvements.

   
.
.
.
.
.
.
    André Cabral
Senior Consultant
Blog