TM Forum’s guides to revenue assurance
The collateral references used by Telefónica Latin America to get the team started on the development of its corporate revenue assurance (RA) practice included the following from TM Forum’s RA Guidebooks:
GB941 Addendum A – KPI Metrics Workbook see www.tmforum.org/GB941A
GB941 Addendum B – Maturity Model see www.tmforum.org/GB941B
GB941 Addendum D – Revenue Leakage Framework and Examples see www.tmforum.org/GB941D
implementation conformance).
In 2011 the team worked closely with Dr. Gadi Solotorevsky, Head of Revenue Assurance at TM Forum, on the Forum’s Revenue Assurance Risk Coverage Model (GB941 Addendum E). For more information please see www.tmforum.org/GB941E.
Big achievements
Six years into the RA program, some of the operating companies have achieved a maturity level above 4. RA has a much higher profile and its importance is widely acknowledged, and the RA teams have a much better understanding and visibility of the main risks and the right approach on controls and tools.
The RA lifecycle – from detection to the correction of root causes – is down from eight months to between three and four months, although complex issues can take a little longer, depending on IT and capital expenditure requirements.
In terms of control coverage, Telefónica Latin America’s overall metric has risen to 52 percent, whereas at the start it was below 30 percent. Although the company has been continuously improving its automated use of RA controls since 2008, even now about 20 percent of those that are carried out repeatedly are manual and the rest are semi-automated. Nevertheless they have given the operating companies and RA teams great insight into the financial benefits of RA and helped them assess and prioritize further developments and deployments, and to optimize new controls.
Over the time, the RA teams have expanded their controls from only covering revenues to include RA cost controls, increasing the ratio from 5 percent in 2008 up to 20 percent now. This indicates that there is still great potential to cut costs in most of the operating companies.
During the last year, Telefónica Latin America has launched an extensive RA Development and Training Program to At the same time, it was important to assess RA maturity
where the function had been in place for a while. To assess RA maturity overall, the centralized team decided to measure it using the five pillars in the Forum’s RA Maturity Model (organization, people, processes, measurement and influence – see page 40). The overall measurement of the RA across the operating companies was found to be, on average, 2 (on a scale from 1 to 5, according to TM Forum’s RA standards, which demonstrated there was huge potential for improvement and savings.
Regarding financial risk, the results of the first assessment found that without adequate RA controls, the 18 operating companies were collectively at risk of losing over 2 percent of their services revenues annually. Looked at another way, at that time, this represented a huge potential to increase the bottom line results in the region if the group could only recover 20 percent of those potential revenues at risk.
Since Q2 2007 Telefónica Latin America has developed and implemented an extensive RA program following TM Forum’s best practices and guidelines. It merged TM Forum’s GB941 Addendum A and GB941 Addendum D to form its own KPI Metrics Workbook and Blueprint which contains definitions of all the relevant control scenarios. At the moment it covers about 60 control scenarios, from product and offer management to accounts (end-to-end).
In addition, the RA team, as part of its proactive RA activities, is now involved in the launch of a new service or promotion, and any systems or network platforms that are being deployed, replaced or updated to identify, assess and avoid potential risks. With this is mind, Telefónica Latin America defined a specific process up to Level 2 of the table above for the team and created a checklist that covers the key aspects of preventing risks and/or identifying where a specific control is needed.
Evolving the Revenue Assurance Maturity Model
TM Forum’s RA Maturity Model has become the guiding light of Telefónica Latin America’s corporate RA strategy and has also been used as a reference to develop more tools and methodologies to enhance the RA function. The company has added to and refined the Model, based on what it has learned from its own operations, including defining and categorizing all the aspects that are important to target at least periodically.
To assure the implementation of its strategy, Telefónica Latin America put in place an extensive RA Transformation Program based on the five pillars of the Maturity Model. This is an ongoing process and more tools and methodologies will be developed to support the evolving maturity of the RA teams in the 18 operating companies. In addition, since 2008 Telefónica Latin America has deployed a world-class solution for RA, which is certified by TM Forum as conforming with Frameworx (see page 55 for the business benefits of product, solution and
bUSinESS
& IT AGILITY
The five pillars of the Revenue Assurance Maturity Model are: Organization
How a business organizes its revenue assurance (RA) responsibilities highlights the alignment between the goals of the business as a whole and the goals of the RA organization. Organizational fit is also a reflection of the business culture and the extent to which the business culture is suited to genuinely adopting RA objectives.
People
The maturity of RA can in part be gauged from the number and skill of human resources dedicated to RA or providing secondary support.
Influence
The ability to proactively instigate, manage and deliver change is a sign of mature RA. Influential RA delivers financial rewards to the business
and a mechanism to continuously improve the efficacy of RA against its full potential.
Tools
The use of tools is one of the most tangible guides to RA maturity. However, maturity relates to the cleverness of design and
implementation, the synergistic use of tools to meet multiple business objectives, and the blend of activities supported by automation as well as the raw processing power, number and cost of tools.
Process
RA involves the improvement of processes, but is itself a high-level process containing many detailed processes that should be improved over time.
1. Ad-hoc, chaotic. Dependent on individual heroics. 2. Basic project/process management. Repeatable tasks
3. Standardized approach developed. Designing-in control commences. 4. Leakage quantitatively understood and controlled.
5. Continuous improvement via feedback. Decentralized ownership, holistic control.