KPMG RA - Telecom

INFORMATION, COMMUNICATIONS & ENTERTAINMENT
RevenueAssuranceinTelecommunications-
ProgressingorPreserving
GlobalRevenueAssuranceSurvey2009Results
KPMG INTERNATIONAL
Foreword
KPMGispleasedtopublishtheresultsofGlobalRevenueAssuranceSurvey
2009–‘RevenueAssuranceinTelecommunications–ProgressingorPreserving’.
ThesurveyexaminesthestateofRevenueAssurancefunctionstodayaswellas
theirtransformationinthefuture.
Withchangingeconomicconditionsworldwideandanevolvingtechnological
environment,thecomplexityofthetelecommunicationsindustryandchallenges
forgrowthareunderscrutiny.Theindustryiswitnessingchangingbusiness
Sean Collins
models,dynamicgrowthstrategies,andcontinuousinnovationinproductsand
GlobalChair
Communications&Media services.Asaresult,variousfunctionswithinorganizationsarechangingtheir
objectivesandoperations,andRevenueAssuranceisoneofthem.
Historicallyseenasawaytoaddtoboththetopandbottom-lineofacompany
bypluggingrevenueleaksandidentifyingquickwins(enhancementandsavings),
RevenueAssurancehasoftenbeenconsideredasmerelyatacticalresponse.
Now,telecomexecutivesandshareholdersaretakingacloserlookathowthis
functionshouldbeplayingamorestrategicrole.
InordertoevaluatetheevolvingroleofRevenueAssurance,KPMGconductedan
onlineglobalsurveycovering74operatorsin46countries.Thissurveytakesan
Romal Shetty
ExecutiveDirector in-depthlookathowRevenueAssuranceispositionedintelecomoperators
CommunicationsHead-India worldwideandassessestheirconcernsandexpectationsforthefuture.Survey
respondentsincludedmembersofseniormanagement(C-levelexecutives)and
headsofRevenueAssurancefunctions.
Thisreportcombinesananalysisofinsightsandtrendsfromtheseoperators
withourexperienceinRevenueAssurance.Wehopeitprovidesvaluablefoodfor
thoughttothesurveyparticipantsandotherreaders.
Specialthankstoalltheparticipantswhocontributedtheirtimeandexperienceto
thisreport.
©2010KPMGInternationalCooperative(“KPMGInternational”),aSwissentity.MemberfirmsoftheKPMGnetworkofindependentfirmsareaffiliatedwithKPMG
International.KPMGInternationalprovidesnoclientservices.NomemberfirmhasanyauthoritytoobligateorbindKPMGInternationaloranyothermemberfirmvis-à-vis
thirdparties,nordoesKPMGInternationalhaveanysuchauthoritytoobligateorbindanymemberfirm.Allrightsreserved.
Table of Contents
1 Revenue Leakage – A continued bane 05
2 Skill sets, tools and methodology – tying 11

the loose ends
3 Empowerment and widened orientation – 22

some more miles to go
4 Key Insights 28
5 Appendices 36
6 Glossary 39
Executive Summary
GlobalRevenueAssuranceSurvey2009Results|02
Today,challengesfacingthetelecomsectorareasfascinatingastheyarewide-
ranging.Operatorscontinuetostrugglewithavarietyofissues—fromexpanding
theirsubscriberbaseinsaturatedmarketstomanagingstupendoussubscriber
growthinmarketsstilldeveloping.
Inmarketswithwirelessmarketsaturation,revenuegrowthwillbelargelydriven
byconsistentserviceinnovation,bydataandotherupstreamservices;whereas
indevelopingeconomieswithlowsaturation,effectivemanagementof
subscribergrowthiscritical.Inmarketswithmultipleplayers,competitionis
oftenintenseandtelecomoperatorswilllikelyneedtoconcurrentlymanagefast-
pacedgrowthaswellasinnovation.
Thecommonthreadforalltelcos—whethertheyarefacedbythechallengesof
sustenance,scalability,orboth—isthepotentialimpactonrevenue.Inanyof
thesescenarios,telcosmaybevulnerabletorevenueleakageorrevenue
stagnation.
Asaresult,RevenueAssurance(RA)isofparamountimportancefortelcosand
executivesarecarefullyconsideringthefollowingquestions:
•HowbeneficialisRAtothebusiness?
•HasRAevolvedtosuitchangingbusinessneeds?
•IsRAredundantinmaturemarketswithlowriskofleakages?
•DoesRAincluderevenueenhancementandcostsavings?
•HowisRAtacklingchallengesofgrowthandinnovation?
03|GlobalRevenueAssuranceSurvey2009Results
Key insights Highlights of the Survey:

Revenue leakage – A continued bane….
• Top three sources of leakages are:
• Majorityofoperatorsindicatedleakages(excludingbaddebt)ofgreaterthan1
• Configurationchangesinanyofthe
percent
networkelements
• MajorityofoperatorsindicatedthatRAachievedmoderatelevelsofidentificationand
• Newproductdevelopmentandtariff subsequentrecoveryofleakages
configuration • Mostoperatorsdidnothavesufficientdataand/orabilitytodeterminetheextentof
leakages(fraudorrevenue)
• PoorsystemintegrationfromMSC-IN-
Mediation-BillingSystems(CDR • Morethan50percentofoperatorsstatedtheyarestillnotinaself-fundingstage
processingcycle) Skill sets, tools and methodology – tying the loose ends…
• Top three challenges faced by RA are: • Majorityofoperatorssaidtheyownedsomerequisiteskills,with‘Networkand

Technical’skillsmostlacking
• Lackofaccurateandtimelyinformation
• CrossfunctionalrepresentationwithinRAteamsisnotyetformalizedformost
frombusiness/operations
operators
• Absenceofautomatedtoolstosupport • VariedRAtoolsareextensivelyusedbyoperatorsacrosstheregions,althougha
RAprocesses majorityofrespondentsaredissatisfiedwithexistingtools
• Lackofproperauthorizationand • AnRAtoolisconsideredacriticalrequirementforfutureRAtransformation
influencingpowerofRAfunction • IssuequantificationforidentifiedRAissuesisnotaprevalentpractice
• Others: • PerformanceofrevenueriskassessmentstodetermineannualRAscopeandplanis
seenasanupcomingtrend
• Prepaidisthelargest—andmost
Empowerment and widened orientation – some more miles to go…
vulnerable—revenuestreamfora
majorityofoperators • Aboutone-fifthofoperatorsworldwidedonothaveaformalizedRAorganization
structure
• OperatorsarewillingtoexploreRA
• IndevelopingmarketsRAwasgivenmorestrategicimportancethanindeveloped
outsourcing—mainlytoaccessrequired
markets(i.e.visibilitytoBoardofDirectorsandAuditCommitteesindicatinglarger
skills
businessmandates)
• Vendor-relatedactivitiesareyetto • IdentificationofrevenueleakagecontinuestobethetoppriorityofRAfunctions
comeunderthepurviewofRAreviews acrossregions
• Intentiontomovetocostreductionandrevenueenhancementdoesexistacrossa
majorityofoperators
Overall,thesurveyrevealedthatRAfunctionsinthetelecommunications
RA functions across the globe industryacrosstheglobearewillingtogearuptonewchallengesand
are willing to gear up to new thereisconfidencethattheywillbeabletomanageincreasedleakage
challenges and there is scenarios.Itallbeginswithproperstrategicattentiontowardsthefunction
confidence that they will be i.e.growingvisibilitywithtopmanagement,AuditCommitteeandBoardof
able to manage increased Directors.TheuseofrevenueriskassessmentsandRAtoolscanbe
leakage scenarios. highlightedasstepping-stonestoRAtransformationinthefuture.
ButwhileitiscriticaltoincreasethescopeofRAobjectivestoinclude
revenueenhancementandcostsavings,itisequallycriticaltohavea
strongergraspofleakageidentificationandrecovery.Asthesurvey
While it is critical to increase revealedthatunavailabilityofinformationwithrespecttorevenueleakages,
scope of RA objectives to analysisofasmallersampleofchargeableeventsandnon-quantificationof
include revenue enhancement allRAobservationsclearlyhighlightthattheactualquantumofleakagemay
and cost savings, it is equally bemuchhigherthanestimatedbyrespondentsinthissurvey.
critical to have a stronger grasp
Asaresult,theRAfunctionneedstoinvestintherightskillsets(internally
of leakage identification and
orexternally),therighttoolsandmethodology,andmustbeempowered
recovery.
withintheorganizationtobuilditsbrandandgainvisibility.Itiscriticalto
realizethevalue-addthatRAcanprovide,especiallyinthecurrentturbulent
economywhereRAmaybetheeasiestwaytodriverevenuelevels
upwards.
RA function needs to invest in
right skill sets, right tools and Progressandprofitabilitymustalsobebackedbyastrongintegratedplan
methodology, and must be betweenbusinessandRA.Unique,siloedinitiativesmayleadtoRAbeing
empowered within the deemeda‘tactical’functiononly.
organization to build its brand

Insummary,thesurveyindicatesthatdespiteallodds,thejourneyto
and gain visibility.
evolveRAtothenextlevelbyoperatorshasalreadybegunandisexpected
tocontinue.
1 Revenue Leakage – A
continued bane…
Leakage – Estimated, Identified and Recovered

54 percent of RA Heads
Revenueleakage(includingfraud-related)acrosstherevenuechainremainsa
indicated that revenue leakage
challengeforoperators.Whileoperatorsindevelopingmarketsfaceawiderange
was greater than 1% of total
ofissuesincludingtheupfrontchallengeofhighrevenueleakages,operatorsin
revenues (excluding fraud)
developedmarketsarefacedwithinsufficientdatatoaccuratelyidentifyand
recovermostoftheestimatedleakages.
Whenaskedaboutestimatedrevenueleakageintheiroperations,54percentof
RAHeadsindicatedthatrevenueleakagewasgreaterthan1percentoftotal
revenue(excludingfraud),and15percentindicatedrevenueleakageofgreater
than3percent.SomerespondentsinAfricaacknowledgedrevenueleakage
greaterthan10percent.(Figure1-Regionalbreakdownoffraudandrevenue
relatedleakages)
Thesesurveyfindingsareskewedbecause18percentofrespondentshadno
informationonrevenueleakagesand37percenthadnoinformationonfraud
leakages.Availabilityofinformationwasagreaterchallengeforoperatorsinthe
Asia-Pacificregionthanotherregions.(Figure2–Percentofrespondentswithno
informationonleakages)
Figure 1: % of respondents with revenue and fraud leakage greater than 1% Figure 2: % of respondents with no information on leakage estimation
% of fraud leakage Fraud Leakages

% of revenue leakage Revenue leakages
Europe 17% Europe
37%
and and
America 17% America 5%
30% 41%
ASPAC ASPAC
58% 29%
Africa 23%
Africa and 18%
and
Middle East 61% Middle East 18%
0 10 20 30 40 50 60 70 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

KPMG’sGlobalRevenueAssuranceSurvey2009 KPMG’sGlobalRevenueAssuranceSurvey2009
Hence,actualleakagesacrosstheindustrymaybehigherthanwhatisestimated
A very thin line exists between above.Further,thisestimationisbasedonrestrictedknowledgeofsourceof
‘leakages as an inherent risk’ revenueleakagesasindicatedbyotherfindingsofthesurvey(absenceof
and ‘leakages as a business requisitenetwork/systemskillsandlowersamplecoverageinRAreviews-
challenge’. Identification and subsequentlydiscussedinthereport).Leakageestimatesbyseniormanagement
recovery of such leakages from werehigherthantheestimatesprovidedbyRAfunctionheads.
the subscribers or partners is
the delta between these two
forms
KPMG Viewpoint
Acommonperceptionacrosstheindustryisthatdevelopingmarketsfacehigherrevenueleakagethandeveloped
marketsduetorapidgrowthandtechnologicalchanges.Thesurveysubstantiatedthisperceptiontoasignificant
extentalthoughitdidhighlightthefactthatdataavailabilitychallengesexistacrossregions.Thesechallengeswere
foundtobeassignificantindevelopedmarketsasindevelopingmarkets.
Dataunavailabilityofanyformisaconcern.Informationiscriticalfordecision-making.Operatorsthatdonotknow
whatisatstakearemorelikelytobecomfortablewiththecurrentstateandnotevolve.
Infraud-relatedleakages,dataunavailabilitywasabiggerconcernwithcloseto37percentofrespondentsunableto
obtaintherequiredinformation.Trackingfraudiscritical—thetelecomvaluechainhasnumerousfraudvulnerabilities,
bothinternalandexternal.Withincreasingdependencyonthirdpartiesforcoreoperations,itisofevengreater
significance.OperatorsworldwideneedtoevaluatetheircurrenttoolsandMISanddata-gatheringprocessessincea
lackofreliableandcomprehensivedatadistortsthedegreeofassuranceprovidedbytheRAfunction.
Revenueleakageisaninherentriskinthetelecomrevenuecycleregardlessof
thescaleandregionofoperations.Averythinlineexistsbetween‘leakagesas
aninherentrisk’and‘leakagesasabusinesschallenge’.Identificationand
recoveryfromthesubscribersorpartnersisthedeltabetweenthesetwoforms:
Thestrongerthedelta,thelargerthegap.
Surveyfindingsyieldedthefollowing:
• Fortypercentofrespondentsestimatedthatlessthanhalfofthetotalleakage
isidentifiedbytheRAfunction.
• Sixtypercentofrespondentsestimatedthatlessthanhalfofidentified
leakageisrecoveredfromsubscriberorpartnerbilling.
• Morethanone-quarterofrespondentsdidnothaveinformationtoestimate
thepercentageofactualleakagesidentified.
• Leakageidentificationseemedabiggerchallengeindevelopingmarkets
wherelargenumbersofrespondentsfromAfrica,theMiddleEast,andthe
Asia-Pacificregionindicatedidentificationoflessthan10percentofestimated
leakages.Butwhileidentificationofleakagesisahurdleforahandfulof
operators,recoveryofleakagesisachallengeacrossallregions.(Figure3-
RegionalbreakdownofrevenueleakageidentifiedandFigure4-Regional
breakdownofrevenueleakagerecovered).
Figure 3: Regional breakdown of revenue leakage identified Figure 4: Regional breakdown of revenue leakage recovered
100%
44% 50% 81% 100%
23% 35% 63%
90%
90%
80%
80% 0%
70% 23%
70%
60% 12%
60%
50% 28%
10% 50% 55% 24%
40%
10% 40%
5%
30% 0%
30% 30% 5%
28% 29%
20% 26%
19% 20%
10%
10%
0% 0%
Africa and Middle East ASPAC Europe and America 0% Europe and America
Africa and Middle East ASPAC
Greater than 50% 25-50% 10-25% Less than 10% Greater than 50% 25-50% 10-25% Less than 10%
KPMG’sGlobalRevenueAssuranceSurvey2009 KPMG’sGlobalRevenueAssuranceSurvey2009
KPMG Viewpoint
Forthemajorityofoperators,recoveryofleakagesrangedfrom2.5percentupto37.5percentofthetotalestimated
revenueleakage.Thisindicatesthatalargeportionofrevenueleakageremainsun-recovered.Althoughrevenue
leakageworldwidewasgenerally1-3percentofrevenues,thequantumofthislossevenatthisminiscule
percentageissignificant.
Itisimperativeforoperatorstoassessthecompletelifecycleofcapturingleakagedata,identifyingtheleakages
andrecoveringthem.Timelinessisalsocriticalsinceleakagesrecoveredoveranextendedperiodoftimeareless
likelytorealizethepotentialvalue.Asthetimebetweentheleakageandrecoveryincreases,theprobabilityandsize
oftherecoverymaydecline.
Figure 5: Self funding RA function vis-à-vis length of operation Revenue Assurance – A self-funding function?
100% 3%
11% 57% Thehighertheleakagerecoverylevels,thehigherthepotentialforRA
90% 18%
11% tobecome‘self-funding’.Aself-fundingRAfunctionisonewherethe
80%
44% 64% totalcostofoperationislessthanthesavingsandbenefitsderived
70%
60% fromit.Thesesavingsmaybeinformofidentificationandrecoveryof
50%
actualleakagespost-factoorproactiveidentificationofrevenue
40%
14%
exposurepriortoitsconversionintoactualleakage.Fifty-fourpercent
30% 33%
29%
20% ofoperatorssurveyedbelievetheirRAfunctionisnotyetaself-
10% 15% fundingfunctionandonly13percentofthoseexpecttobecomeself-
0% 0%
1-5 6-10 11+ fundinginthenextyear.
Number of years in operation
Further,itisinterestingtonotethat97percentofoperatorsin
It is already a self funding function Next 1-3 year
businessformorethan10yearsstilldonothaveself-fundingRA
Greater than 5 years Next 1 year
functions.YoungeroperatorsseemedtoindicatemoreefficientRA
KPMG’sGlobalRevenueAssuranceSurvey2009
functions—with33percentstatingtheywouldbeself-fundingwithin
thenextyearcomparedtoonly15percentofoperatorsthathavebeen
inbusinessforover10years.(Figure5–Self-fundingRAfunctionvis-
à-vislengthofoperations)
KPMG Viewpoint
Thefindingthatmostoperatorsarenotyetself-funding—despitethefactthatthecostofRAistypicallyfarless
than1percentofrevenues—isnotsurprisinggiventhecommonchallengesofdataunavailabilityandlowrecovery
percentages.
Aself-fundingfunctionhastoalsobeveryagileinadynamicenvironment.Ongoinginvestmentinnewtools,skill
sets,processes,andtechnologymayberequiredtokeepupwithimprovementsintelecomtechnology,andthe
increasingcomplexityofrevenueleakagesources,includingfraud.Self-fundingisacontinuouslyevolvingprocess
ratherthanastaticstate.Withannuallygrowingrevenuesandvolumes,theinvestmentrequiredtosustaina‘self-
funding’statusalsoincreasescontinuously.
Driversforaself-fundingfunctionmayalsovarybasedonthedegreeofmaturityoftheRAprogram.Earlystagesof
RAmaturitymandateafocusonleakagestoallowthefunctiontomovetoaself-fundingstage.MorematureRA
functionsinstillbenefitsintheformofmarginenhancement(revenueenhancementandcostsavings)tosustainthe
self-fundingstatus.
2 Skill sets, tools and
methodology – tying the
loose ends…
EffectiveachievementofRAobjectivesmandate:
Majority of the respondents

• Arobustteamwithdiverseskillstounderstandthevariousaspectsofthe
highlighted that technical skills
telecomrevenuechain—skillsrangefromtechnicaltofinancialtoprocess
i.e. knowledge of network
control.
elements and other systems
involved are the most • AutomatedandadvancedRAanddataanalyticstoolstoefficientlycapture
significant missing skill set in andanalyzelargevolumesofdata.
their function • CustomizedRAmethodologybasedoncontemporarybusinessneedsand
ensuringprioritizedcoverageofareas.
Acombinationofallthreeiscriticalforanoperatortoleveragethecomplete
benefitsoftheRAfunction.
Skill set availability

WhenpolledonavailabilityofskillsetswithintheRAfunction,62percentof
seniormanagementand57percentofRAheadsindicatedthatRAfunctions
eitherpossesspartialorincompleteskillsrequiredtobeeffective.Thiswas
consistentacrossregionsirrespectiveofmaturityofthemarketsinvolved.
Amajorityofrespondentsfeltthattechnicalskills(i.e.knowledgeofnetwork
elementsandothersystems)arethemostsignificantmissingskillset.Secondto
technicalskills,auditandinvestigativeskillswereindicatedtobedeficient.
Figure 6: Deficient skill sets within the RA function
Key skill sets lacking in the RA function
Itisinterestingtonotethat59percent
Audit and other 38 ofseniormanagementinAfricaand

investigative skills 43
theMiddleEastbelievedthatfinance
Technical i.e. networks 65
knowledgewaslackingindicatingan
and systems related 72
olderschoolofthought—thatRAisa
Skill Set
33
Analytical skills
17 financeandaccountingoriented
Telecom domain and 18 function.However,indeveloped

business knowledge 29
marketssuchasEuropeandAmerica,
Finance
27 technicalandauditskillswerethekey
25
areasidentifiedaslacking.(Figure6-
0 10 20 30 40 50 60 70 80
Percentage of respondents
DeficientskillsetswithintheRA
function)
RA Head Senior Management
Theestablishmentofcross-functionalteamswithliaisonstootherdepartments
canbethekeytodevelopingtherequireddiverseskillsetwithinRA.By
identifyingliaisonsacrossdifferentfunctionssuchasNetworks,Sales,Financeor
IT,peoplewhohavemorespecializedskillsfromtheseareascanbeleveragedto
helpRAmeetitsdiverserequirements.OftheRAfunctionssurveyed,morethan
50percentwerefoundtohavepartialornocross-functionalrepresentation.
Approximately35percentinEuropeandAmerica,andabout67percentinthe
Asia-Pacificregionstatedtheydonothavecross-functionalteamsatall.
Asseeninthefigurebelow,revenueleakagecanhappenanywhereacrossthe
revenuecycle.Across-functionalskillsetwithintheRAteamisnecessarytobe
effective.Further,inadditiontooperationalknowledge,itiscriticalforRA
personneltopossesssoundbusinessandmarketknowledge.
Ideal Revenue Cycle with no revenue leakages
Events captured by Events captured by Total revenue Total payments

Usage by customer = = = Total bills generated = =
network elements charging systems accounted received
Leakage due to configurations

Leakage due to bad debts

Incorrect revenue reporting

Anothertrendindicatesthatonthejobtrainingisthemostpopulartraining
methodadoptedbyoperators(92percent),followedbyself-study.Onlyone-third
ofoperatorsorganizespecifictrainingtodevelopspecializedtechnicalknowledge
ofnetworksandanalytics,etc.Investmentinclassroominductionsessionsand
self-studyprogramswasalsominimal.
Leading Practice
TrainingforRAprofessionalscanbeprovidedthroughfocusedworkshopswhereRAexpertsarebroughtintoapprise
theRAteamofthelatesttrendsintelecomrevenueleakageandthecurrenttechniquesthatcancounterthem.RA
expertscanbecontractedforperiodsofthreetosixmonths,andtheircontinuousexposuretoRAfunctions
worldwidewouldgivetheminvaluableperspectivestoshare.Thetrainingperiodswouldalsopresenttheopportunity
fortheRAteamstotapintotheexperienceofthesespecialiststohelpthemresolvethespecificproblemsand
situationsthattheymayface.
KPMG viewpoint
Leakagescanoccuranywhereacrosstherevenuecycle--sales,activation,networkconfiguration,CDRprocessing,
ratingandbilling,creditsandcommissions,amongothers.ItisthereforecriticalforRApersonneltounderstand
variousaspectsoftherevenuecycle–technical,commercial,andfinancial.Knowledgeandunderstandingensuresthat
leakagesofallformsareidentifiedandsubsequentlyrecovered.However,technicalareassuchasnetworksorrating
andbillinghavebeenhighlightedasthemostvulnerable.Thedevelopmentofskillsinthesecomplexareasisapriority.
Thisneedissubsequentlyunderlinedbythecomplexityofevolvingtechnologiesandinnovativeproductsinthe
market.Ascompetitionincreasesorasmarketsmature,operatorsoftenengageinproductinnovationthatgenerally
involvescomplexnetworkarchitectureandbillinglogic.Technicalskillsgaingreaterimportanceasleakagescanbe
identifiedonlyifRApersonnelcantalkthesamelanguageasthebusinessoperationalfunctions.Therefore,
involvementinlogicbuildingandconfigurationchecksisascriticalasafterfactreconciliations.
Despitesuchpressingneeds,thefactorsmentionedbelowindicatethatin-houserecruitmentandretentionofsuch
skillsmaynotbeaseasyacrossalloperators:
• MostRAfunctionsarenotself-funding.RAisperceivedasasupportfunctionandhencebusinessisreluctantto
allowsignificantinvestmentwithoutrealizingtangiblebenefits.
• Basedonourexperiencesomeoperatorsindevelopingcountrieshavesignificantdifficultyrecruitingtheright
peopleandretainingthemlong-term.
Asaresult,theexistenceofcross-functionalteamsbecomesparticularlyimportanttocombatthechallengeofmissing
skills.OncetheskillsetsaredevelopedwithinRA,theinvolvementofotherfunctionscanbereducedovertime.
However,activeinvolvementofcrossfunctionalrepresentativesinresolutionofRAissueswouldcontinue.
Thedifferentperspectivesandskillsetsofacross-functionalteamfacilitateaholisticviewoftherevenuecyclewithin
theRAteamratherthanasiloedviewfocusedonlyonbillingerrorsandrevenuerecognition.
Identificationofspecificrequiredskillsetsandinvestmentindevelopingthoseskillsetsisimportant.Whenthe
businessfunctionandRArealizetheirskillsarecomplementaryandnotcompetitive,theRAskill-setchallengemaybe
moreeasilyovercome.
Leading Practice
RecruitingfrominternalfunctionssuchasFinance,Networks,andITforafixedperiodunderan“exchangeprogram”
canhelpensureagenuinelycross-functionalRAteamthatthoroughlyunderstandsthebusinessdynamics,leadingto
moreefficientandeffectiveperformance.TheRAheadcanberesponsiblefortheemployees’appraisalonthejobto
avoidconfusionregardingthereportingstructure.Thisprocedurealsobenefitsemployeesbyexpandingtheirhorizons
andprovidingthemwithvariedperspectivesofthebusiness.Inmanyorganizations,sucharotationalassignmentis
consideredanimportantleadershipdevelopmentactivity.Sometelecomoperatorsevenrecruitfromapoolofretired
policemenanddetectivestobringintheirinvestigativeknowledgeandexpertise.
AnotherleadingpracticeistheestablishmentofanOperationalRASteeringCommitteecomprisedoftheheadsof
variousdepartmentsacrossfunctions.SuchacommitteecanhelptheRAfunctionescalateanyidentifiedissues,data
inadequacy,orexceptions,totherelevantdepartmentsdirectlytohelpexpediteresolution.
Revenue Assurance Tool Application

RAfunctionsutilizeavarietyoftoolssuchasautomatedRA,analytics,data
extraction,anddashboardsthatcanperformperiodicreconciliationsandidentify
exceptions.
SurveyrespondentswerefoundtouseRAtoolsextensively.Amajoritystated
thatanalytical,dataextraction,testcallgenerators,andautomatedRAtoolsare
usedindividuallyorincombination.However,approximately43percentofRA
headsandseniormanagementindicatedtheywereeitheronlypartiallysatisfied
orwerenotsatisfiedwiththeapplicationofRAtools(Figure7:RATool
Assessmentresponse).
Figure 7: RA Tool Assessment response (% not satisfied)
Thetrendacrossregionsindicatedhighlevelsof
80
71 dissatisfactionwithexistingRAtools—mostnotablyin
% Not Satisfied with RA Tool
70
60 AfricaandtheMiddleEast.Itisevidentalsothat
50 50
50
40 operators,thoughawareofthebenefitsofRAtools,are
40 32
30 notabletoleveragethemaximumoutputfromthemand
20
20
asaresultarenotsatisfied.
10
0
Africa and Middle East ASPAC Region Europe and America
Region
RA Head Senior Management
Figure 8: Quantification of observations Inordertofurtheranalyzetheabovefindingsitiscriticaltonote
responsesforthefollowingtwokeyRAaspectsaswell:
69 26 5
Europe and
America • Morethanone-thirdofoperatorsanalyzelessthan5percentof
56 44 0 chargeableevents
ASPAC Region
• Forty-onepercentofrespondentsquantifyleakagesonlyforcritical
48 52 0
Africa and
Middle East
issues.(Figure8–Quantificationofobservations).
0% 20% 40% 60% 80% Thisclearlyindicatesthatwhilemostoperatorshaveinvested

significantlyinRAtools,thebenefitsderivedintheformofcoveringa
Yes (for all observations)
largersampleordeterminingoverallleakageimpacthasbeenlimited.
Partially (for critical observations) No quantification performed
Suchtoolsandtechniquesrequirespecificknowledge,technicalskills,
andtrainedresourcestooperateefficiently.Asindicatedearlier,most
respondentsfeltthatadequatetechnicalandanalyticalskillsarecurrently
More than one-third of
missingintheirfunction.Becauseofthelackofskillstoimplement
operators analyse less than 5
thesetoolsortoapplyanalyticaltechniquesoveralargespreadofdata,
percent of chargeable events
thefullpotentialofthesetoolsisnotbeingleveraged.
and about 41% of respondents
indicated that they quantify Asthesizeandcomplexityofbusinessesgrows,theuseofadvanced
leakages only for critical issues toolsandanalyticswillbecriticalfortheRAfunctiontoperform
effectively.
Growth of information
AmajorityofseniormanagementandRAheadsacrossregionsindicatedthat
definedRAprocedures,alongwithRAtools,arecriticaltopreventleakages.
ExpectationsfromtheRAtoolsarehighwithapproximately80percentof
respondentsinallregionsadvocatingtheuseofRAtoolstocombatrevenue
leakage.
KPMG Viewpoint
Theabsenceofissuequantificationnullifiesthebenefitsderivedfromtheuseofadvancedtoolsorlargersample
coverage,astheoperatorswouldnotbeabletoprioritizethefindingsanddeterminetheactualimpact.Thisalso
provestobeadeterrentforRAgainingimportanceintheorganizationastherewouldbenovisibilityintotheextent
ofsavingsfromtheRAfunction.
RAheadsandseniormanagementemphasizedtheneedforautomatedRAtoolstocombatrevenueleakages.
AlthoughRAtoolscancertainlybeoneofthemosteffectiveandconvenientmechanismstoidentifyrevenue
leakage,RAtoolsalonearenotthesolutiontomostoftheproblemsfacedbytheRAfunction.
UseofanadvancedRAtoolcanbeessentialforthedevelopmentandprogressoftheRAfunction.However
operatorswillnotbeabletoleverageatool’sbenefitswithoutthesupportofrobustandcomprehensiveRA
operationalproceduresandadequateskillsets.Astrongteamisneededtodeciphertheindicatorshighlightedby
thetool,assignacriticalityanddeterminewhatactionsneedtobetaken.Further,RAtoolsaregenerallyconfigured
bytechnicalvendorpersonnelindependentlyandlackbusinesssupportduringtheconfigurationstage.Involving
businesssupportearlywouldensureallbusinesscriticalchecksareconfiguredasperrequirements.Forexample,
RAchecksshouldnotberestrictedtothemostpopularratingandbillingchecksbutshouldalsoincludechecks
acrossotherelementssuchasactivations,balanceforfeiture,saleofgoldennumbers,andmanualcredits.
Thelaunchofnewservices,especiallydatarelated,requireRAtoolscapableofunderstandingandanalyzing
informationfromnewsystemsinvolvedinservicedelivery.VerysoonthefocusofRAcouldmovefromCDRs(Call
DataRecords)toEDRs(ElectronicDataRecords)orIPDRs(InternetProtocolDataRecords),andthetoolsbeing
employedneedtoberobustandflexibleenoughtohandletheseshifts.TheRAtoolsneedtobesupportedby
trainedpersonnelwhounderstandthenewservicestoobtainthebestresults.
Leading Practice
PriortoimplementinganRAtool,aprocessshouldbeestablishedincorporatingtoolinvolvementandadetailedneeds
assessmenttodeterminetherequiredtoolfunctionality.Customizedtoolsaremoreeffectivethanjustplug-and-play
solutions.Further,havingseparatetoolsforRAandfraudmanagementcanleadtomorefocusedanalysisineacharea
vis-à-visacombinedsolution.
IncasethescaleofoperationsorbudgetconstraintscannotaffordtheinvestmentinanRAtool,automatedRA
activitiesusingcontinuousmonitoring(ACL,MSAccess,etc.)canbeused.Thisminimizesdependencyonmanual
processesandensuresgreaterefficiencyinreportingturnaroundtimeandaccuracy.
Revenue Assurance Methodology and Coverage

Figure 9: RA Methodology Assessment
RAmethodologydetermineskeyactivitiesundertakento
Europe and identifyandresolverevenueleakageissuesacrossan

America
organization.Itincludesdeterminingthenature,coverage,
timingandfrequencyofreviewsandthereportingof
ASPAC
identifiedissues.
Africa and WhenaskedtoassesstheRAfunctiononcoverage,

Middle East
methodology,andqualityofworkparameters,amajorityof
0% 20% 40% 60% 80% 100% RAHeadsindicatedtheywere‘satisfied’or‘verysatisfied’.

Percentage of respondents However,50percentofRAheadsintheAsia-Pacificregion,
48percentinAfricaandtheMiddleEast,and32percentin
Yes Partially No
KPMG’sGlobalRevenueAssuranceSurvey2009 EuropeandAmericaindicatedthattheyarejustpartially
satisfiedwiththeexistingRAmethodologyanditsalignmentwithoverallRA
objectives(ReferFigure9–RAMethodologyAssessment).
RAassessmentonvariousparametersbyseniormanagementandRAheads:
Thesurveyindicatesthattheapplicationofannualriskassessmentstodetermine
One of the upcoming trends annualRAreviewplansandscopeislikelytoincrease.About38percentof
highlighted by this survey has operatorsapplyriskassessmentsforRAscoping—thisincludes12percentof
been application of annual risk operatorswhocombinetheresultsofassessmentsalongwithad-hocrequests
assessments for determination ordefinedactivitycalendarstoperformvariousRAchecksorreviews.
of annual RA review plan and

AnnualriskassessmentsareprevalentintheAsia-Pacificregionwith56percent
scope. About 38 percent of
ofoperatorsrespondingtheyhavecompletedsuchassessments.Thisisfollowed
operators apply risk
byEuropeandAmericawith41percent,andAfricaandtheMiddleEastwith21
assessments for RA scoping
percentacknowledgingtheircompletion.Whilerevenuerelatedriskassessments
areincreasing,manyoperatorsstillperformRAreviewsbasedonstandard
schedulesandad-hocrequests--specificallyinAfricaandtheMiddleEast.
Mostoperatorsindicatedtheyuseacombinationofthefollowingthree
approachestoconductRAreviews:
A-Conductannualriskassessments
B-HavestandardRAschedulesdefined
C-ConductRAreviewsonanad-hocbasis
(Figure10–VariedRAapproachapplication)
Figure 10: Varied RA approach application
A B
2% 32%
27%
4%
6% 8%
21%
KPMG viewpoint
IntegrationoftheRAapproachandmethodologywithbusinessobjectivesrequirestheRAapproachandplantobe
basedoncurrentbusinessneedsandenvironment.RAneedstobeformallyintegratedwithotherkeyassurance
activities.ThiswillensurethattheRAreviewscheduleandplanmirrorscurrentbusinessneedsandpriorities;
specificallywhentheseareconstantlychangingasaresultofchangeinrevenuestreams,technologyandsystems.
Frequencyofrevenueriskassessmentsshouldalsobedeterminedbasedonbusinessenvironmentwherebymature
marketsmayperformsuchassessmentsannuallyandgrowingmarketsmayperformmorethanonceinayear.RA
shouldalsoproactivelyidentifyspecialRAprojectsthatmaybeperformedduringtheyear.
AlargenumberofoperatorsareonlypartiallysatisfiedwiththecurrentRAmethodologyduetoarelianceonad-hoc
requestsforinvolvementandoutofdateRAschedules.
Further,thedifferencesinopinionwhileratingcoverageofoperations,knowledgeandskillsetsindicatealackof
communicationbetweenseniormanagementandRAheads.ThisalsohighlightstheneedforRAtobuilditsown
brandwithintheorganization.DoingsocouldhelptheRAfunctiontoincreasevisibilityacrosstheorganizationand
establishRAascriticaltoallkeydecision-making.
Leading Practice
Toensuresufficientcoverageofoperations,well-structuredRAfunctionscreatedetailedactivitycalendarsthatinclude
milestonesacrosstherevenuechain.Thiscalendaralsoincludesacriticalitymatrixhighlightingthemostimportant
activitiesandthefrequencywithwhichtheyareperformed.AclearandexhaustivelistassiststheRAfunctionin
prioritizingmilestonesdependingonavailabilityofpersonnelandotherresources.Activitycalendarsneedtobe
supportedwithdetaileddesktopproceduresindicatingthemethodologyinvolved.Thiswillreducedependencyon
personnelandensurecontinuity.
3 Empowerment and widened
orientation – some more
miles to go…
Eventoday,aboutone-fifthofoperatorsworldwidedonothaveaformalizedRA
It is encouraging to note that RA is organizationstructure.EitherinternalauditgroupsorotherfunctionsperformRA
being provided growing visibility activities,usuallyinalimitedandreactivemanner.
and empowerment in some
geographies. Survey indicated that Thesurveyindicatedthatmorethan53percentofRAfunctionsultimatelyreport
developing markets have granted totheChiefFinancialOfficer.However,furtheranalysisindicatesthatoperatorsin
more strategic importance to RA developingmarketsseemtohaveestablishedmorestrategicimportancetoRA
than developed markets. thanthoseinthedevelopedmarkets.
ThefollowingfiguredetailstheauthoritytowhichtheRAfunctionreportsona
periodicbasis
Board of Directors Board of Directors Board of Directors
30% 6% 15%
Audit Committee Audit Committee Audit Committee
Chief Executive Officer 26% Chief Executive Officer 53% Chief Executive Officer 10%
Chief Financial Officer 44% Chief Financial Officer 41% Chief Financial Officer 75%
Revenue Assurance Head Revenue Assurance Head Revenue Assurance Head
Africa and Middle East ASPAC Europe and America
ItisencouragingtonotethatRAisgarneringgreatervisibilityandempowerment
insomegeographies.Atthesametimeoperatorsmustensurethat
empowermentisequallybalancedwithrequisitecredentialssupportedbyproper
skillsets,toolsandprocesses–itisapre-requisiteforRAtoperformeffectively.
Interestingly,thesurveysuggesteddifferentperceptionsofRAbysenior
Prevention and detection of managementandRAheads.
revenue leakage continues to
Inthefuture,revenueleakagewillcontinuetobetheprimaryobjectiveforboth
be the primary objective of the
groups.Seniormanagementratedfocusonrevenuereportingasthesucceeding
RA function – for the present
objective,andRAheadscomparativelyselectedinvolvementinrevenue
and for the future
enhancementandcostsavings.
Preventionanddetectionofrevenueleakageremainstheprimaryobjectiveofthe
RAfunction,with79percentofseniormanagementand87percentofRAheads
polledlistingitastheirhighestpriority.Assistingthebusinessinmanaging
leakage-orientedissueswasthesucceedingobjective.
OperatorsarekeentotransformtheexistingRAfunctiontoincludenewer
responsibilitiesandavenues--only16percentofrespondentsarefullysatisfied
withtheexistingroleofRA.However,themajorityoftherespondentswho
expressedtheirwillingnesstotransformthefunctioncouldnotsupporttheir
intentionswithanintegratedactionplan.(Figure11–Presenceofintegrated
actionplanforRAtransformation)
Figure 11: Presence of Integrated action plan for RA transformation
Presence of an integrated plan for RA
Currently working on
developing a plan
34% 35% Integrated plan exists but

implementation is pending
Fully satisfied with the

current role of RA function
18% Integrated plan exists that is

13% being implemented currently
Whendevelopinganintegratedplan,it
Revenue Exposure iscriticaltoconsiderallthree
Revenue Leakage
Revenue Enhancement dimensionsofarobustRAframework:
Cost Saving
RAorientationorkeyobjectives;
Preventive Detective Top-line Bottom-line
methodology(includinggovernance
n
tatio
Technology
ien model);andrequiredenablerstoput
Or
Process
Placement and empowerment People
objectivesandmethodologyin
in organization GOVERNANCE
practice.
Enablers
Prioritized focus,
REVENUE RISK ASSESSMENT
scope and frequency
Periodic reviews and EVENT IDENTIFICATION Theneedtotransformthefunctionis
continuous monitoring
Quantification IMPACT ANALYSIS consistentwiththeviewexpressedby
Plugging of revenue losses and manyRAheadsthattheirfunctionis
RECOVERY AND SUSTENANCE
process/ control/ system lapses
Tools and analytics
Timely reporting and escalation COMMUNICATION AND REPORTING onlypartiallyalignedtooverallbusiness
Operationalization
Skill set objectivesandgrowthstrategies.This
Methodology
numberisparticularlyhighintheAfricaandAsia-Pacificregions(40percent),and
atsmallertelcoswithrevenuesunderUSD500million(75percent).
However,mostseniormanagementrespondents(71percent)acrossallregions
andscaleofoperationsstatedthattheybelievedtheRAfunctionisinalignment
withoverallbusinessobjectivesandgrowthstrategies.
KPMG Viewpoint
Theglobaltelecomindustryhaswitnessedunprecedentedlevelsofgrowth,openingofmanynewmarkets,rapidly
changingtechnology,andever-increasingpressureonmargins.ThishasforcedtheRevenueAssurancefunctionto
movetoabusinessadvisor’sroleratherthancontinueinonlyaleakagepreventioncapacity.
TheabsenceofanintegratedplanfortherequiredRAtransformation,despiteclearintentionsforthesame,
positionsRAasa‘tactical’functionratherthanawellarticulatedlong-termstrategyanddirection.Thisclearly
indicatesthatRAisstillconsideredasupportfunctionandnotastrategicone.
AsthetelecomindustrygrowsitwillbecrucialfortheRAfunctiontoevolveinordertobetteralignitselfwiththe
changingbusinessdynamicsandobjectives.Thiswouldrequireoperatorstoassessthecurrentrequirementsalong
withtheexternalbusinessscenariotoevaluatethelong-termroleofRA.Whiledetectionandpreventionofrevenue
leakagewillremaintheprimaryobjective,aformalinclusionofrevenueenhancementandcostsavingsshouldbe
evaluated.
Suchatransformationrequiresmorethanjustafunctionaloverhauling.Currently,acrossregionsandirrespectiveof
thescaleandmaturityoftheoperators,motivationtoassistRAtotakeonagreaterroleislimited.Itisessential
thatorganizationsadoptafreshmindsettoallowforallbusinessfunctionstoacceptRevenueAssurance’s
demandingrolewithintheorganization.
OneencouragingtrendthatwasrevealedbythesurveywasRAreportingtotheCEOingrowingmarkets.This
highlightsthelargerbusinessmandateandperspectiveinwhichRAisbeingpictured.
Parameters and stages of RA Maturity Model
Leading Practice
WhileRAreportingtotheCFOshouldhappenonamonthlybasis,itisrecommendedthataquarterlyreportalsobe
presentedtotheBoardofDirectorsandtheAuditCommittee.Thisreportshouldclearlyhighlightthefinancialimpact
ofissuesidentifiedbytheRAfunction.
RepresentativesoftheboardmayapprovethecompositionofanRASteeringCommitteeanddefinedRAcharterand
targets.SuchastructurewillgiveRAtheopportunitytohavedirectvisibilitytoseniordecisionmakingauthoritiesand
highlightitsimportancetotherestoftheorganization.
Intime,RAshouldbeestablishedasakeyinput,notjustforkeyoperationaldecisionssuchasvendorselectionand
procurement,butalsoforstrategicdecisionssuchasmergersandacquisitionsornewproductlaunches.Thetechnical
knowledgewithabusinessbackgroundthatRAprovidescanbevaluableindecision-making.
Clearlydefinedperformanceevaluationagainstpre-establishedgoalsshouldbeconductedonanon-goingbasis.
Revenueleakageidentificationandrecoverytargetsshouldbeestablishedtoensurequantificationandincreased
recoveryefforts.Also,aregularmaturityassessmentofRAshouldbeconductedtoconstantlyassesstheneedsof
theRAfunctionandcommunicatethemtoseniorlevelsofmanagement.
4
Key Insights
Source of leakage
Onascaleof1to10thefollowingwereratedasmostvulnerabletorevenue
leakages:
• Significantconfigurationchangesinanynetworkelement
• Newproductdevelopmentandtariffconfiguration
• PoorsystemintegrationfromMSC-IN-Mediation-BillingSystems(CDR
processingcycle)
Figure 12: Source of revenue leakage
14% 14%
13%
New Product development and
12% tariff configuration
12%
Poor system integration from
MSC-IN-Mediation Billing Systems
10%
9% Significant configuration change
8% 8% 8% 8% in any of the network elements
8%
Percentage
CDR generation issues at MSCs/

7% 7% Incorrect usage data
6% Intelligent Network Charging Failures
5%
Retail Billing systems errors
4%
Interconnect partner payments
2% VAS partner payments

Credit Management
0% Frauds (internal or external)
Key sources of revenue leakage Roaming settlements
KPMG Viewpoint
RAfunctionsconsiderleakagesourcesthatarenetwork-orsystem-intensivetobemostvulnerable.Withtherapid
introductionofnewproductsandaverylimitedturnaroundtime,configurationchangesandincomplete
synchronizationacrossmultiplesystemsmayleadtotheoverrideofavalidbusinessruleinanyoneofthesystems.
Leading Practice
AmajorglobalTelecomfollowsa‘RiskPortfolioModel’approachforeverynewproductlaunched.Aspartofthemodel,
business,financial,andoperationalrisksareassessedbeforeaproductislaunched.Thishelpstoensureensuresthat
allriskanglesarereviewedandquantified,andtheappropriateresponsibilitiesassigned.Thisapproachalsoensures
thataconsciousandstudieddecisionismaderegardingthefeasibilityandrisksfortheproductbeinglaunched.
Figure 13: Revenue streams rated as most vulnerable

Revenue stream vulnerability
Inregardtorevenuestreamvulnerabilitythesurveyrevealedthat:
15%
• Morethan45percentofallrespondentsranked‘Prepaid’asthemost
9% susceptibletorevenueleakage(Figure13)
46%
• InAfrica,theMiddleEast,andtheAsia-Pacificregion,amajorityof
13% respondentsranked‘Roaming’and‘ValueAddedServices(VAS)’asthe
secondmostvulnerable
17%
• InEuropeandAmerica‘Postpaid’wasrankedasthesecondmost
vulnerable.
Prepaid Postpaid IC Roaming VAS

Itisnotablethatthelargestrevenuestreamformostoperatorsisalsothe
mostvulnerable.
Key Challenges faced by Revenue Assurance

Amajorityofrespondentsratedthefollowingasthekeychallengesthatprevent
theirorganizationsfromleveragingmaximumbenefitsoutoftheRAfunction:
• Lackofaccurateandtimelyinformationfromthebusinessand/oroperations
• AbsenceofautomatedtoolstosupportRAprocesses
• LackofproperauthorityandinfluenceoftheRAfunctionwithinthe
organization.
(Figure14–KeyChallengesfacedbytheRevenueAssurancefunction)
Figure 14: Key challenges faced by the Revenue Assurance function
Inconsistent RA procedures and

policies across organizations
10% Absence of automated tools to
support the RA processes
15%
9% Lack of defined and structured scope

and methodology for RA function
Key challenges
12%
Lack of proper authorization and influencing
10% power of RA function within the organisation
9% Lack of proper RA awareness

within the organisation
9% Managing high cost of RA operations
17%
Weak alignment between RA objectives
9% and overall organizational objectives
Absence of availability of accurate and

timely information from business
0% 5% 10% 15% 20%
Non availability of requisite skill sets
(in number as well as type)
KPMG Viewpoint
LackofinfluenceoftheRAfunctionimpactsitsabilitytoobtainrequireddata,asotherfunctionsarelesslikelyto
actonRArequestspromptlyandefficiently.RAneedstoestablishitsbrandwithintheorganizationtobetaken
seriously.ThiscanbedriventhroughamandatefromtheBoardofDirectorsestablishingalong-termgoalforRAand
aclearroadmaptogetthere.
Leading Practice
TohelpensuretimelydeliveryofaccuratedatatoRA,ServiceLevelAgreements(SLAs)canbeestablishedbetween
RAandotherdepartments.TheSLAswouldsupportdifferentcircumstancesofdatarequirementsduringthenormal
courseofRAtesting,orduringspecialcircumstancessuchasanewproductlaunch.Thispracticecanhelptoensurea
smootherandtimelycompletionofRAactivities.
Third party dependency vis-à-vis Revenue Assurance

Sixty-eightpercentofrespondentsindicatedtherewerenoformalevaluation
mechanismstoreviewcontrolsestablishedbythevendorsmanagingcore
operations.SpecificRAreviewsforvendorsarerareandwhereversuch
mechanismsdoexist,operatorsarenotsatisfiedwiththeresults.
Approximately61percentofrespondentsstatedtheydonothaveaclawback
clauseinvendoragreementstorecoveranyformofleakagesduetonegligence
ornon-compliance.Oftherespondentsthatdidhaveaclawbackclause,only23
percentstatedthattheyhadeverexecutedit.Onereasonfornon-executionof
suchclausescouldbealackofformalvendorreviewsforRAresultingin
operatorsnotobtainingsufficientinformationandfactstoexecutetheclause.
Withdependencyonthirdpartiesandvendorsinvolvedinoperationsacrossthe
telecomrevenuechain,itiscriticaltoensurethatrevenueimpactingKPIsand
SLAsareincludedincontracts.Asthisisrarelydoneatpresent,operatorsare
exposedtosignificantrisk.
Revenue Assurance outsourcing

OperatorsarewillingtoexploreRAoutsourcingtoalimitedextent.Themajor
driverforthisisthenon-availabilityofthenecessaryskillsetsin-house,
specificallywithrespecttonetworkandsystemrelatedskillsandknowledge.
Although85percentofoperatorsdonotcurrentlyoutsourcetheRAfunction,
morethan50percentofseniormanagementandRAheadswerenotopposedto
doingso.NetworksfollowedbyRatingandBillingwerethekeyareasidentified
whereexternaltechnicalassistancewouldbemostrequired,especiallyinAfrica
andtheMiddleEastwhereRAfunctionswerenotasdevelopedasinother
markets.
KPMG Viewpoint
Outsourcingisakeytrendarisingduetodriverssuchascost,skillset,growthandconsequentlytheneedtofocus
oncoreoperations.Evenwithdedicatedteams,itmaynotbepossibletohavethenecessarybandwidthacrossall
operatingunits.Managingeverythingcentrallyrequiressignificantinvestmentinsystems.Asaresult,RA
outsourcingisanimminenttrend.Thebusinessmodelsmayvaryfromlimitedoutsourcingtocompleteoutsourcing.
Whileconcernslikedataintegrity,confidentiality,andregulatorycompliancemaycloudsuchdecisions,thebenefits
significantlyoutweightherisksandchallenges.
Leading Practice
AlargeAfricantelecomoperatorcounteredtheinabilitytohireexperiencedRAprofessionalswhowererightforthe
jobbyoutsourcingtheRAfunctiontoateamofexternalspecialists.ThisensuredthatRAwasequippedwiththeskill-
setsandtoolsrequiredtobecomeaneffectiveRAfunction.Inaddition,byincludingclearlydefinedKPIsinthe
agreementbetweentheoperatorandthevendor,topmanagementhadcontrolandvisibilityovertheperformanceof
theexternalspecialist.
Degree of centralization
Thelargertheoperatorscale,themorecentralizedtheRAfunctionisatthe
corporatelevel.Centralizationmayexistintwoforms:Completecontrolorlimited
representationatoperatingunits/circles.Thesurveyindicatedthatcomplete
controlatcorporatelevelsisthemorepopularindustrypractice.
WhileAfricaandtheMiddleEastbothshowedaneventendencybetween
centralizationanddecentralization,AsiaPacificandEuropeandAmericaclearly
indicatedapreferenceforacentralizedfunctionwithcompletecontrolatthe
corporatelevel.
KPMG Viewpoint
LargeoperatorstendtofollowacentralizedRAstructurethatprovidesthemwithbettercontroloverthefunctionat
thecorporatelevel.ThisalsoallowsforgreaterinvestmentinRAasthefunctioniscateringtomorethanasingle
circle/countryandhencemustanalyzeandreportonlargevolumesofdataacrossoperationswithvaryingdegrees
ofcomplexity.
Fraud management
Morethan60percentofrespondentsacrossAsiaPacific,Africa,andtheMiddle
EastindicatedfraudmanagementwaspartoftheRAfunction.However,58
percentofoperatorswithrevenuegreaterthanUSD500millionhadan
independentfraudmanagementdivision.
KPMG Viewpoint
Whilebiggertelecomoperatorshaveanindependentfraudmanagementfunction,itisstillapartoftheRAfunction
acrossmediumandsmall-scaleoperators.TheresponsibilityofidentifyingandaddressingfraudlieswithRA;hence
therequisitetoolsandskillsetscapableofidentifyingfraudleakagesalsoneedtobeincorporatedintotheRA
function.
Leading Practice
HavingdedicatedresourcesforRAandfraudmanagementensuresthatbothareasreceivesufficientcoverageaseach
requiresaspecializedskillset.Bothfunctionscanbestructuredwithinonedepartmentreportingtoasinglehead.
Suchastructureencouragescollaborationbetweenthetwofunctionsandreducesthelikelihoodofduplicationof
effort.Atthesametime,thedistinctionalsofosterscreativecompetition.
Forecasted leakages
While90percentofRAheadsbelievethatfuturedevelopmentswillincrease
revenueleakage,morethan50percentwereconfidentthattheRAfunction
wouldbeabletoidentifytheincreasedrevenueleakage.
KPMG Viewpoint
Withagreementfrommostoperatorsthatnewtechnologyandincreasingcomplexitywillleadtoincreasedrevenue
leakageexposure,itisessentialthatRAstrengthensitsskillsandupdatesitstoolstokeeppacewiththechanging
scenario.Focusedtraining,inclusionofnewtoolsandevenoutsourcingtospecialistscanhelpensurethis.
5
Appendices
KPMG’sGlobalRevenueAssurancesurveywasconductedduringAugust2009–
October2009.Itincludedanonlinequestionnairethatwasrolledouttosenior
managementandheadsofRAfunctionsacrossnewandestablishedtelecom
operators.Thequestionswerespecifictotheprofileoftherespondentwitha
specificfocusontheroleofRAintheorganization.
Theanalysisandfindingspresentedinthissurveyarebasedoninformation
gatheredfrom86respondentsfrom74operatorsin46countriesacrossEurope
andAmerica,AfricaandtheMiddleEast,andtheAsia-Pacificregion.
Europe and America Africa and the Middle East Asia Pacific
Austria Benin Afghanistan

Belgium Cameroon China
Bulgaria Côted'Ivoire India
Cyprus Egypt Indonesia
CzechRepublic Ghana Japan
Finland GuineaConakry Malaysia
France Iran NewZealand
Germany Kenya Pakistan
Greece Kuwait Philippines
Italy Rwanda SouthKorea
Netherlands SaudiArabia Thailand
Poland SouthAfrica
Romania Swaziland
Turkey Sudan
UnitedKingdom Syria
UnitedStatesofAmerica Uganda
UnitedArabEmirates
Yemen
Zambia
Respondent profile based on geography
Telecom operators per region
30% 35%
35%
Africa and Middle East Europe and America ASPAC

Respondent profile based on scale of operation
Scale of Operations of respondents

Annual Revenue (USD)
Greater than 500 million 46
251 million - 500 million 5
100 million - 250 million 15
Less than 100 million 8
0% 10% 20% 30% 40% 50%
Number of Respondents
Greater than 500 million 100 million - 250 million

251 million - 500 million Less than 100 million
6
Glossary
© 2aaa010 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG
International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis
third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Glossary
ACL AuditCommandLanguage
ASPAC AsiaPacific
CDR CallDataRecord
CEO ChiefExecutiveOfficer
CFO ChiefFinancialOfficer
EDR EventDataRecord
IC Interconnect
IN IntelligentNetwork
IPDR InternetProtocolDataRecords
IT InformationTechnology
KPI KeyPerformanceIndicator
MIS ManagementInformationSystem
MS Microsoft
MSC MobileSwitchingCenter
RA RevenueAssurance
SLA ServiceLevelAgreement
USD UnitedStatesDollar
VAS ValueAddedService
©2aaa010KPMGInternationalCooperative(“KPMGInternational”),aSwissentity.MemberfirmsoftheKPMGnetworkofindependentfirmsareaffiliatedwithKPMG
ContactUs
Formoreinformationaboutthissurvey,pleasecontactoneofthefollowingInformation,Communications,and
Entertainmentprofessionals:
Romal Shetty
TelecommunicationsHead,
ExecutiveDirector,KPMGinIndia
Tel:+918030654100
Email:romalshetty@kpmg.com
Sean Collins
GlobalChair
Communications&Media
Partner,KPMGAsiaPacificLtd
Tel:+6563723300
EMail:seanacollins@kpmg.com
Maureen Migliazzo
GlobalExecutive
Information,Communications&
Entertainment
KPMGLLP
Tel:+16504044425
e-Mail:mmigliazzo@kpmg.com
AboutKPMG
KPMG’sInformation,Communications&Entertainmentprofessionalsofferskills,
insights,andexperienceculledfromalonghistoryofworkwithcommunications
andmediacompaniestodelivertheservicesyouneedtohelpyousucceed
whereveryoucompeteintheworld.Weoffercustomized,industry-tailoredaudit,
tax,andadvisoryservicesthatcanleadtocomprehensivevalue-addedhelpforyour
mostpressingbusinessrequirements.KPMG,throughitsglobalnetworkofhighly
qualifiedprofessionalsintheAmericas,Europe,theMiddleEast,Africa,andAsia
Pacificcanhelpyoureducecosts,mitigaterisk,improvecontrolsoveracomplex
valuechain,protectintellectualproperty,andmeetthemyriadchallengesofthe
digitaleconomy.
KPMGisaglobalnetworkofprofessionalfirmsprovidingAudit,TaxandAdvisory
services.Weoperatein144countriesandhave137,000peopleworkinginmember
firmsaroundtheworld.
Formoreinformation,pleasevisit:www.kpmg.com.
FormoredetailsonKPMG’sInformation,Communications&Entertainmentpractice,contactoneofthe
followingprofessionals:
Gary Matuszak Australia Egypt

GlobalandAmericasChair PeterMercieca EhabBoulelmagd
Information,Communications Partner,KPMGinAustralia Partner,KPMGinEgypt
&Entertainment +61294559155 +20(2)5362211
Partner,KPMGintheU.S. pmercieca@kpmg.com.au Ehmagd@kpmg.com
Tel:+16504044858
e-Mail:gmatuszak@kpmg.com Belgium France
RolfDeclerck HenriBaetz
Kieran Lane Partner,KPMGinEuropeLLP Partner,KPMGinFrance
ASPACChair +32(0)27083726 +33155688700
Information,Communications rdeclerck@kpmg.com hbaetz@kpmg.com
&Entertainment
Partner,KPMGinAustralia Brazil Finland
Tel:+61293357514 ManuelFernandes VirpiHalonen
e-Mail:kieranlane@kpmg.com.au Parnter,KPMGinBrazil Partner,KPMGinFinland
+552135159412 +358207603684
Edwin Fung mfernandes@kpmg.com.br vhalonen@kpmg.fi
ASPACChair,
Communications&Media PieterRWVanDijk Germany
Partner,KPMGinChina Partner,KPMGinBrazil MarkusKreher
Tel:+861085087032 +55213515-9444 Partner,KPMGEuropeLLP
e-Mail:edwin.fung@kpmg.com.cn Pdijk@kpmg.com.br +498992824310
markuskreher@kpmg.com
Graeme Ross Canada
EMAChair,Information, JonathanKallner HansWinterhoff
Communications&Entertainment Partner,KPMGinCanada Partner,KPMGEuropeLLP
Partner,KPMGEuropeLLP +16046913043 +4951185095227
Tel:+442073113372 jkallner@kpmg.ca hwinterhoff@kpmg.com
e-Mail:graeme.ross@kpmg.co.uk
China India
EdwinFung RajeshJain
Partner,KPMGinChina Head–Information,Communications&
+861085087032 Entertainment
edwin.fung@kpmg.com.cn ExecutiveDirector,KPMGinIndia
+912230902370
rcjain@kpmg.com
Italy Russia Taiwan

LucaFalessi AndreiShvetsov WinstonYu
Partner,KPMGinItaly Partner,KPMGinRussia Partner,KPMGinTaiwan
+3902676431 +74959374444-14321 +886281016666
lfalessi@kpmg.it ashvetsov@kpmg.ru wyu@kpmg.com.tw
Japan Saudi Arabia Turkey

TakujiKanai M.SashikanthRamakrishnan MuratAlsan,
HeadofICE Partner,KPMGinSaudiArabia Partner,KPMGinTurkey
Partner,KPMGAZSA&Co. +96612914350 +902123177400
+81(3)35485150 rsashikanth@kpmg.com malsan@kpmg.com
takuji.kanai@jp.kpmg.com
South Africa (and all Africa) United Kingdom
Mexico RonStuart TudorAw
LuisCarrero Partner,KPMGinSouthAfrica Partner,KPMGEuropeLLP
Partner,KPMGinMexico +27(11)647-6834 +442076941265
+528181221818 Ron,stuart@kpmg.co.za tudor.aw@kpmg.co.uk
carrero.luis@kpmg.com.mx UnitedStates
South Korea
Netherlands SeanChoi United States of America
DickvanSchooneveld Partner,KPMGinKorea CarlGeppert
Partner,KPMGEuropeLLP +82221120300 Partner,KPMGintheU.S.
+31206568322 schoi@kr.kpmg.com +13032958827
vanschooneveld.dick@kpmg.nl cgeppert@kpmg.com
SungRaePark
RonaldJonker Partner,KPMGinKorea
Partner,KPMGEuropeLLP +82221120310
+31703382321 sungraepark@kr.kpmg.com
Jonker.Ronald@kpmg.nl
Spain
Poland CelsoGarcíaGranda
JerzyKalinowski Partner,KPMGEuropeLLP
Partner,KPMGinPoland +34914563400
+48225281130 celsogarcia@kpmg.es
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KPMG RA - Telecom

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INFORMATION, COMMUNICATIONS & ENTERTAINMENT

1 Revenue Leakage – A continued bane 05

2 Skill sets, tools and methodology – tying 11

3 Empowerment and widened orientation – 22

Key insights Highlights of the Survey:

• Top three challenges faced by RA are: • Majorityofoperatorssaidtheyownedsomerequisiteskills,with‘Networkand

RA functions across the globe industryacrosstheglobearewillingtogearuptonewchallengesand

are willing to gear up to new thereisconfidencethattheywillbeabletomanageincreasedleakage

challenges and there is scenarios.Itallbeginswithproperstrategicattentiontowardsthefunction

confidence that they will be i.e.growingvisibilitywithtopmanagement,AuditCommitteeandBoardof

able to manage increased Directors.TheuseofrevenueriskassessmentsandRAtoolscanbe

leakage scenarios. highlightedasstepping-stonestoRAtransformationinthefuture.

methodology, and must be betweenbusinessandRA.Unique,siloedinitiativesmayleadtoRAbeing

empowered within the deemeda‘tactical’functiononly.

organization to build its brand

Leakage – Estimated, Identified and Recovered

% of fraud leakage Fraud Leakages

0 10 20 30 40 50 60 70 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Majority of the respondents

significant missing skill set in andanalyzelargevolumesofdata.

their function • CustomizedRAmethodologybasedoncontemporarybusinessneedsand

Skill set availability

Audit and other 38 ofseniormanagementinAfricaand

Telecom domain and 18 function.However,indeveloped

Ideal Revenue Cycle with no revenue leakages

Events captured by Events captured by Total revenue Total payments

Leakage due to configurations

Events captured by Events captured by Total revenue Total payments

Leakage due to bad debts

Events captured by Events captured by Total revenue Total payments

Incorrect revenue reporting

Events captured by Events captured by Total revenue Total payments

Revenue Assurance Tool Application

RA Head Senior Management

Figure 8: Quantification of observations Inordertofurtheranalyzetheabovefindingsitiscriticaltonote

0% 20% 40% 60% 80% Thisclearlyindicatesthatwhilemostoperatorshaveinvested

Revenue Assurance Methodology and Coverage

Europe and identifyandresolverevenueleakageissuesacrossan

Africa and WhenaskedtoassesstheRAfunctiononcoverage,

0% 20% 40% 60% 80% 100% RAHeadsindicatedtheywere‘satisfied’or‘verysatisfied’.

One of the upcoming trends annualRAreviewplansandscopeislikelytoincrease.About38percentof

highlighted by this survey has operatorsapplyriskassessmentsforRAscoping—thisincludes12percentof

been application of annual risk operatorswhocombinetheresultsofassessmentsalongwithad-hocrequests

assessments for determination ordefinedactivitycalendarstoperformvariousRAchecksorreviews.

of annual RA review plan and

Figure 10: Varied RA approach application

Board of Directors Board of Directors Board of Directors

Audit Committee Audit Committee Audit Committee

Revenue Assurance Head Revenue Assurance Head Revenue Assurance Head

Africa and Middle East ASPAC Europe and America

Figure 11: Presence of Integrated action plan for RA transformation

Presence of an integrated plan for RA

34% 35% Integrated plan exists but

Fully satisfied with the

18% Integrated plan exists that is

Parameters and stages of RA Maturity Model

Figure 12: Source of revenue leakage

CDR generation issues at MSCs/

2% VAS partner payments

Figure 13: Revenue streams rated as most vulnerable

Prepaid Postpaid IC Roaming VAS

Key Challenges faced by Revenue Assurance