The Definition of Revenue Assurance
In the telecommunications assurance industry, revenue assurance can make reference to numerous activities and vocations. It can indicate a certain activity performed by a telecommunication service provider, but it can just as quickly point to small business unit that handles such an activity. Specifically, revenue assurance in the telecommunications field is considered the practical response to apparent or concrete issues concerning the underperformance of operations as they connect with the collection of revenue, along with revenue management and billing.
Because of this, hinging on a particular company's structure, revenue assurance can be either a separate department -OR- a wide set of responsibilities that are assigned to several different departments or business units. There are four different criterion that decide what specifically falls inside the spectrum of revenue assurance amongst telecom service providers:
- The cross-functional elements of revenue assurance, which involves several skills drawn from marketing, IT, finance, and other departments. - The intricacy of generalizing across units and companies with varying objectives, structures, and models. -Internal political conflict with regards to the responsibility for billing assurance, telecom fraud, revenue leakages, and so forth. - The intricacy of accurately quantifying the value added by revenue assurance in addition to that linked to underlying performance.
Needless to say, the aims and methods of revenue assurance vary widely, and no real consensus has been reached concerning the special limitations of revenue assurance. In a nutshell, revenue assurance is primarily concerned with bettering a telecom company's financial performance by limiting (preferably eliminating) mistakes as financial data is processed, frequently with the aid of business analytics. In some cases, this involves creating a fraud management system. Usually, however, revenue assurance optimizes (1) revenue from retail and corporate sales; (2) the costs and revenues from wholesale and interconnects contracts; and (3) profitability and margins as they relate to any investment in information and network systems.
Revenue assurance offers a low-cost means to deliver significant financial returns for almost all telecommunications service providers, though these can be a challenge to foretell and assess. This may result in more than one skeptical executive. Although, when properly integrated, revenue assurance can be useful in other industries, there are three reasons it is most suitable in the telecommunications sector:
- The intricacy of determining the combined effect of systems and processes as they connect to one another. - The incredibly high-volume and inversely low-volume of telecommunications transactions means that the financial significance of slight errors are amplified. - Its rapid rate of change, which creates an opportunity for strong competition, thereby raising the possibility of mistakes.
Finally, do not forget that there are no special policies or guidelines regarding revenue assurance, and definitely no governing body to determine best practices. You will find, however, three special disciplines of revenue assurance that should be utilized by a telecom service provider to promote increased profitability. These include:
- Evaluating and lessening revenue loss risk. - Monitoring, Baselining, Auditing, Synchronizing, Investigating, and Compliance-also known as the CORE functions of revenue assurance. -The Revenue Management Chain, which decomposes a firm's revenue assurance scope.