Revenue assurance takes on bigger role

The increasing variety of service bundles and subscription plans offered by service providers is having an interesting effect on the OSS industry.  During the last few years, the field of revenue assurance (RA) has risen in prominence within the big picture of OSS, and has matured impressively in the variety of tools developed and value brought to service providers. 


In its early years, RA was considered by some to be little more than an afterthought in telecom operations, but is now treated as a strategic consideration among many service providers. More specifically, many service providers considered to be the most advanced by industry peers have instituted full-fledged RA operations centers increasingly close to C-level management. 


The new position of RA is reflected in its higher profile among interoperability forums and standardization bodies. For example, the TeleManagement Forum published a Revenue Assurance Guidebook several months ago, which contributed to standardization in the field, and more recently mapped RA into its integrated NGOSS framework.


Common perception is that the importance of RA has risen because so has vulnerability to revenue leakage. However, the problem today is not simply the same old story with bigger numbers. Although revenue leakage is not a new concept, the specific causes and solutions are always evolving. 


RA has generally dealt with various aspects of data integrity - for example, data integrity between network resources and billing data, and provisioning process integrity are among two areas traditionally covered. One of the newest forms of RA support is rating and billing verification, and is a perfect example of the way in which this field has developed into a central component of telecom OSS.


Rating and billing, the processes by which each call or other usage event is matched with its appropriate plan and charged, have become more significant with the increased personalization of services offered.


For many legacy services and their typical monthly rate for unlimited usage plans, individual usage events rarely impacted the bottom line, making rating and billing not a major concern. With the variety of service bundles, subscription plans, on-demand options, and promotional schemes offered, each event has more of an impact on revenue, and legacy rating and billing systems can be overwhelmed.


Aside from the sheer variety of subscription plans, the rapid changes taking place pose a further challenge. Even among simpler legacy service providers, it has long been shown that revenue leakage is always highest following any billing change.


This applies both to provider-initiated changes, such as in pricing plans or new services, and to subscriber-initiated changes, such as in plan selection. After any such change, there may be a jump in leakage that will not be caught.  As providers offer more personalized plans, the user's flexibility to switch between alternate plans increases, leading to a very dynamic billing environment.


Within only the last year or so, RA industry leaders have developed rating and billing verification tools to address these challenges. Through sophisticated analysis and sampling techniques, these solutions can provide thorough support for any number of pricing plans, and even simulate prospective plans before they are offered, proactively preventing unnecessary revenue leakage and maximizing ROI. 


Rating and billing verification systems can also draw data from CDRs and IPDRs, allowing these solutions to provide support in even the most dynamic billing environment.  By giving service providers the rating and billing verification support they need to profitably market their services in a personalized and flexible way, RA has advanced yet another step towards being a central aspect of telecom management and operations.


As it rises in profile, RA is also making a more positive name for itself, shedding the negative image attached to it by being associated with revenue leakage. Now most service providers see that it's really all about boosting ROI - whether that may be investment in infrastructure, content rights, and others. 


In this case, the way NGNs are packaged for consumers in increasingly sophisticated service and subscription offerings has raised the profile of RA. While this stems from their increased vulnerability to revenue leakage, this should not be taken as a criticism. This is a positive, necessary trend that reflects the maturation of the industry as a whole. 


By increasing the variety of their offerings, they give consumers a more personalized package of communications and media services, tailored to their interests and budget restrictions. As a general rule in this industry, whatever is best for consumers is best for everyone. 


The benefit to service providers in this case is quite visible: it creates a higher-value business model, increases subscriber loyalty, and is a better platform for growth. The increased role of RA in this business model is simply an opportunity to further widen the profit margin at the bottom line, boost ROI, and improve subscriber loyalty by eliminating billing inaccuracies.


Alon Aginsky is president, CEO and co-founder of cVidya Networks