global revenue assurance survey 2012 – entering a new era[1]
DESCRIPTION
Entering a new era for revenue assurance.KPMG’s latest Global Revenue Assurance Survey confirms that the industry is becoming far more complex, driven by convergence and the rise in m-commerce, along with a huge array of new value-added services and tariff plans.TRANSCRIPT
TELECOMMUNICATIONS
Entering a new era
Are new value propositions opening up for Revenue Assurance functions?
kpmg.com
KPMG INTERNATIONAL
Contents
03
05
08
16
28
34
41
42
Foreword 03
Executive summary 05
The continuing battle against revenue leakage 08
Revenue Assurance’s evolving role in the organization 16
Sharpening operations 28
The power of people 34
Conclusion and key takeaways 41
About the survey 42
m-commerce is the trend that will have the greatest impact on the industry.
Sean Collins Global Chair Telecommunications & Media
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Enter ing a new era
Romal Shetty Head of Telecommunications KPMG in India
Sean Collins Global Chair Telecommunications & Media
Rapid and far-reaching changes in the telecommunications landscape are increasing the risk of revenue leakage. Today’s operators have to cope with complex network systems, converged service offerings, multiple third party partners and a rise in outsourcing, all of which creates the potential for inaccurate data capture and billing, and increased fraud. In addition to these challenges, all operators are facing margin pressure, particularly with increasingly savvy customers, emerging data products, and the need to continually invest in network infrastructure to keep up with demand.Against this backdrop, intense pressure is on Revenue Assurance (RA) functions to identify and address revenue leakage and deal with the increased risk of fraud. ‘Leakage’ in this report refers to actual revenue leakage as well as revenue exposure – the identification of potential revenue leakage before the event has occurred.
KPMG’s global study of revenue assurance and fraud management functions identifies the continued challenges faced by telecommunications companies today, and offers some guidance on how to reduce revenue leakage and optimize margins. In this, the second KPMG Global Revenue Assurance Survey, we spoke to executives responsible for RA from 137 telecommunications companies around the world. The results make compelling reading and show a number of interesting changes since the previous survey in 2009.
We would like to thank all those who gave their valuable time to participate in the survey.
Foreword
3
Enter ing a new era
4
Enter ing a new era
Executive summaryThe impact of market forces on telecommunications companies
A number of forces are at work in the telecommunications industry that are increasing the potential for revenue leakage, and the survey responses show how operators are transforming their businesses in response.
Business transformation through increasing complexity
With convergence comes complexity• Eighty-fivepercentofrespondentsprovideconvergedservices.• Growthinbusinessprocessoutsourcing,value-addedservicesandtariffplans.• m-commerceisthesinglemosttransformativeissue.
Revenue leakage a continuing threat
Much work to be done to plug revenue leakage
• Thirty-sixpercentofrespondentssaytheircompanyleakagemorethan1percentoftotalrevenue.• Forty-one percent of RA functions fail to identify more than half of total leakage.• Newtransformationalprojects(newtechnology,network,billingsystemmigration,forexample),
poor system integration and fraud are the top three sources of revenue leakage. • Newerrevenuestreamssuchasdata/broadband,interconnectandvalue-addedservicesare
more vulnerable.
Operational transformation to build better practice
Strong signs of greater efficiency• Fifty-sixpercentofrespondentssaytheirRAfunctionisself-funding.• Vastmajorityhavestrongstandardoperatingproceduresfordatasourcesandexecution
processes for RA activities.• Seventy-eightpercentusesomekindofRA/fraudmanagementtool.• But…52percentsaytheirseniormanagementisnotrewardedagainstRAperformance,
which could weaken the focus on prevention and identification of leakage and fraud.
Talent is high on the agenda• RAfunctionshaveagoodmixoftechnicalandbusinesscompetence.• Sixty-fivepercentexpecttogrowthroughinternaldevelopmentofpeople.
Functional transformation as Revenue Assurance’s role evolves
RA function still lacking influence• Only21percentreportdirectlytotheBoard.• Only25percentofCFOsseeaneedforachiefRAofficer.• But…somepositivesignsofgrowingauthority,with85percentofRAfunctionsformally
involved in signing off on new projects.
RA structure changing… but slowly• Only24percentofRAdepartmentsarefullycentralized.• Forty-twopercentofRAfunctionsarecross-functionalwithabalancedrepresentation.• FortypercentsaytheywouldneveroutsourceRA.
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Enter ing a new era
Convergencecontinuestobelargelyresponsibleforthisincreasedcomplexity,withthevastmajority(85percent)ofrespondentsprovidingconvergedservicestotheircustomers.
However, when asked which changes would have the greatest impact on the industry, the number one response was m-commerce. This reflects the growth of mobile banking and payments, which is creating new, independent revenue streams with accompanying billing and security issues.
0 10 20 30 40 50 60 70 80
Others (please specify)
Mobile advertising
Preferred carrier basedon subscriber choice
Mobile virtual network operator
Mobile number portability
Long-Term Evolution (LTE) standard
Next Generation Networks
Converged services
M-Commerce/banking/payments
Factors most likely to transform the telecommunications industry
74%
71%
65%
48%
36%
32%
24%
16%
12%
N= 114 respondents
Respondents could select more than one response option.Source: KPMG Global Revenue Assurance Survey, 2012
Established trends Emerging trends
• OutsourcingofcoreoperationslikeNetworkandIT.• HighnumberofValueAddedServices(VAS)parties
deployed.• Highnumberoftariffplansonamonthlybasis.
• Likelyincreaseinleakageowingtotransformationslikem-commerce,NextGenerationNetworksandconvergedservices.
• Primaryfocusonrevenueleakageidentificationonly.• Needforcross-functionalestablishment.• Increasedfocusonproductandnetworkassurance.• CentralizedRAfunctions.
• VisibilitytoAuditCommitteeandBoardofDirectors.• CreationofCXOpositionforRA.• PartialoutsourcingofRAfunction.
• DetailedprocessdocumentationaroundRAchecks.• Focusondevelopmentofanalyticalandtechnicalskills.• ExistenceofRAtooldeployment.• Lowrecoveryratesforidentifiedleakage.
• PerformanceincentiveslinkedtoRAsavingsforRAandbusiness functions.
• DedicatedFraudfunctionswithincreasedvisibilityandempowerment.
• Establishmentoffraudriskmanagementframework.
As they strive to identify and reduce revenue leakage and fraud, RA functions are looking to become more influential at the highest levels and sharpen their operations to become more efficient in an increasingly complex industry.
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Enter ing a new era
The speed of change in the sector is breathtaking and putting an incredible amount of pressure on our RevenueAssurancepeople.Wehavetoadaptquicklyand decisively or else risk even greater leakage.
Gabriela Sobral GilRevenue Assurance HeadTelefónica Latinoamérica
The telecommunications executives that took part in the survey are well aware of theconsequencesofsuchmajortransformations.Anoverwhelmingproportion(94percent)believethethreatofrevenueleakageandfraudwillgoup,andhalfthinkthisrisewillbesignificant.
Impact of transformations upon thetelecommunications industry
45%
49%
2% 4%
Partial increase in revenue leakage and threat of fraud
Significant increase in revenue leakage and threat of fraud
No increase in revenue leakage and threat of fraud
Decrease in revenue leakage and threat of fraud
N = 85 respondents
Source: KPMG Global Revenue Assurance Survey, 2012
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Enter ing a new era
The continuing battle against revenue leakageDespite their best efforts at prevention, more than a third
of respondents are leaking in excess of 1 percent of total
revenue. And the RA function has enjoyedmixedfortunes,with41
percent failing to identify more than half of total leakage.
Compared to the previous 2009 KPMG Global Revenue Assurance Survey, the proportion
claiming leakage more than 1 percent has fallen considerablyfrom54to36 percent,althoughthere
is still clearly much room for improvement.
The only regions to report worse figures than 2009 are Europe and the Americas, where the percentage
claiming leakage over 1 percent of revenue has more than doubled. A significant shift to prepaid in these
markets, along with an explosion in data usage via smartphones, has made providers in these regions more
susceptible to losing revenue. More worryingly, a fifth of this year’s respondents admit to leaking up to 10 percent of annualrevenue,and 15 percentreportleakageofmorethan
10 percent. Asia Pacific appears to be the best performing region.
Given the scale of these losses, it’s understandable that respondentsconsiderthenumberoneobjectiveforRA
functions to be the prevention, detection and recovery of revenue leakage. Other activities such as fraud prevention,
revenue management and cost saving are given a far lower priority.
A fifth of respondents are leaking up to 10 percent
of total revenue
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Enter ing a new era
The continuing battle against revenue leakageLeakage as a percentage of revenue
Figures might not add up to 100% due to rounding.Source: KPMG Global Revenue Assurance Survey, 2012
Between 1-10% of revenue
Greater than 10% of revenue
Up to 1% of revenue
N = 101 respondents
Africa & Middle East Asia Pacific Europe & Americas
50%32%
18%10%
15%
19%15%
75% 66%
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Enter ing a new era
Variable performance of RA functions
NotallRAteamsaresuccessfullyspottingrevenueleakage.Forty-onepercentof the companies in the survey say they fail to identify more than half of total leakage,althoughthesefiguresdifferwidelyfromregion-to-region.RelativelyfewRAfunctionshavecross-functionalteamsthatincludethebreadthofskillstoidentifyeverytypeofleak–especiallythosethathappenatpre-billinglevelat the switches. Consequently, a fair proportion are found by other parts of the organization.Telecommunications providers in Europe and the Americas have by far the best track record, while those from Asia Pacific are the least impressive,withmorethanaquarter(26percent)identifyinglessthan 10 percent of all leakage. Operators in countries such as India tend to have less sophisticated systems yet must deal with enormous volumes of data records, so fail to detect patterns of revenue loss.
41percentofthecompanies in the survey fail to identify more than half of total leakage.
Main objective of RA functions
Respondents were asked to rank each objective in order of importance, with 1 being the most important.
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7 Rank 8N = 89 respondents
Figures might not add up to 100% due to rounding.Source: KPMG Global Revenue Assurance Survey, 2012.
Proactive identificationof new technologiesand corresponding
cost benefit analysisfor the business
Implementationof new
technologies/transformational
projects
Train businesspersonnel
about RA controlswithin dailyoperations
Enhance customerexperience through
product andnetwork assurance
Focus on revenueenhancement
and cost savingopportunities
Assist in fraudprevention
Lead overall revenuemanagement
program acrossorganization
Prevent, detect andrecover revenue
leakage
0%
10%
20%
30%
40%
50%
60%
70%
80%
31%
24% 27
%
26% 31
%
30%
44%
80%
KPMG ViEWPOinT
Visible improvement
As recently as three years ago, a number of operators didn’t even have dedicated RA teams, instead delegating responsibility to Internal Audit or other departments. The reduction in leakage relative to the 2009 survey is a sign of the growth of RA as a dedicated function, along with greater adoption of processes and tools (even if the latter hasn’t always run smoothly). Many operators in the Middle East and Africa are starting to take RA more seriously as they seek to address serious leakage.
Ron Stuart Head of Telecommunications & Media KPMG in South Africa
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Enter ing a new era
Percentage of leakage identified by the RA function
Africa & Middle East Asia Pacific GlobalEurope & Americas
8%
17%
54%
21%16%
11%
47%
26%
5%
11%
70%
14% 9%
13%
60%
19%
Figures might not add up to 100% due to rounding.Source: KPMG Global Revenue Assurance Survey, 2012
N = 80 respondents
10–25% of leakage
25–50% of leakage
Greater than 50% of leakage
Up to 10% of leakage
Recoveringrevenuecontinuestobeachallenge,withjust40percentofrespondents managing to retrieve more than half of all losses from subscribers and partners. Companies from Europe and the Americas have the highest recovery rates, while those from Africa and the Middle East are the least effective, with four out of ten (39 percent) recovering less than 10 percent of their reported leakage.
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Enter ing a new era
Europe and the Americas lead the way in terms of revenue recovery, with more than half the leakage recovered from customers or partners (partners refers to interconnect,roamingandVASpartnersacrossbusinessoperations).AfricaandtheMiddle East recovers 11 percent of leakage, predominantly due to service contracts being prepaid in nature.
The respondents feel there are a number of reasons why they are not getting the most out of their RA functions, with ‘inconsistency of data across different systems’ top of the list, as the chart opposite shows. This could be influenced by the fact that many RA functions are not centralized, which limits the coordination with internal IT departments.
And according to the survey participants, RA departments are also hindered by a lack of appropriate skill sets – which reflects recruitment, training and retention strategies. Some say they don’t have sufficient automated tools to support the processes; although the industry has invested heavily in tools, not all have brought the level of automation anticipated.
Proportion of leaked revenue recovered from subscribers and partners
0
10
20
30
40
50
60
GlobalEurope & AmericasAsia PacificAfrica & Middle East
25–50% of revenue Greater than 50% of revenue10–25% of revenueUp to 10% of revenue
39%
27% 26%
21%
55%
17%20%
40%
23%
47%
7% 7%
39%
11% 11% 11%
N = 62 respondents
Figures might not add up to 100% due to rounding.Source: KPMG Global Revenue Assurance Survey, 2012
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Enter ing a new era
0 1 2 3 4 5 6 7 8
Lack of defined scope for the function
High cost of operations
Lack of RA and fraud awareness within the organization
Weak alignment between functional and overall organizational objectives
Lack of authorization of RA function within the organization
Inconsistent procedures and policies across organizations
Non-availability of accurate and timely information from business
Absence of automated tools to support the processes
Non availability of requisite skill sets
Lack of data consistency across different systems
Reasons why organizations do not make the most of their RA functions
N = 89 respondents
Source: KPMG Global Revenue Assurance Survey, 2012
Respondents were asked to rank each reason, on a scale of 1–10, with 10 being the highest
6.3
6.1
6.0
6.0
5.6
5.3
5.2
5.0
4.8
4.7
KPMG ViEWPOinT
Coping with integration
Systemsintegrationisamajorchallengeforthesector,withmanycompanieshavingbuilt up a range of systems for billing, mediation and interconnect, which often don’t talk to each other very well. In addition to these challenges, vendors are constantly releasing newapplicationsforvalue-addedservices,whiledifferentmobileSwitchingCentermanufacturers use different data formats. In order to bring greater data consistency, providersareattemptingtoconsolidatealltheirITintoonefully-integratedplatform,whichentails a huge cost and risk.
Romal ShettyHead of Telecommunications & Media KPMG in India
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Enter ing a new era
Change is the weak spot
Executivesinvolvedinthe2012surveyfeelthatnewtransformationalprojects(suchas new technology, network and billing system migration), make their organizations highly vulnerable to revenue leakage and fraud. They are also concerned with poor billing system integration, as well as internal and external fraud.
However,onapositivenote,three-quarters(74percent)ofrespondentssaytheyaresatisfied with their RA function’s ability to cope with transformation.
0 1 2 3 4 5 6 7 8
Sales commissions
Complex tier-based pricing
Retail billing systems errors
VAS partner payments
Intelligent network charging failures
CDR generation issues at MSCs/incorrect usage data
New product development and tariff configuration
Interconnect and roaming billing
Frauds (internal or external)
Poor system integration from MSC-IN-Mediation-Billing systems
New transformational projects
Aspects of the business most vulnerable to revenue leakage/fraud
N = 44 respondents
Source: KPMG Global Revenue Assurance Survey, 2012
Respondents were asked to rank the vulnerability of each business aspect, on a scale of 1–10, with 10 being the highest
6.5
6.3
5.3
5.6
6.4
6.0
6.2
5.6
5.3
5.2
5.1
Prepaid,roamingandpost-paidarethethreerevenuestreamsmostsusceptibleto leakage or fraud, which is not surprising as these currently generate the greatest volume of payments. However, alternatives such as data and broadband, interconnectandvalue-addedservicesarenotfarbehind,andmaytakeonmoreimportance as mobile data usage increases over time – particularly with the emergenceofm-commerce.
Aquarterofallrespondentsnowhave50ormorethirdpartypartnersprovidingvalue-addedservices,sothisareaofthebusinessisalsolikelytobecomemoresignificant for RA functions.
Responsesdifferbyregion,withvalue-addedservicesconsideredahighlyvulnerable stream by Asia Pacific providers, and data and broadband a bigger worry in Europe and the Americas.
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Enter ing a new era
2.24.0
4.5
5.2
4.5
5.33.43.4
4.0
4.03.4
4.04.2
4.53.7
5.66.7
3.6
4.43.7
4.5
0 1 2 3 4 5 6 7 8
4.05.7
6.1
Africa & Middle East
Asia Pacific
Europe & Americas
Global
Prepaid Post-paid Interconnect Roaming
VAS Data and broadband Fixed line Carrier*
Revenue stream most susceptible to revenue leakage/fraud
Respondents were asked to rank the susceptibility of each revenue stream, on a scale of 1–10, with 1 being the highest
N = 46 respondents
Source: KPMG Global Revenue Assurance Survey, 2012.*Carrier refers to wholesale telecom providers responsible for carrying voice and data networks across different service providers.
5.9
5.95.9
4.8
2.8
4.8
4.9
3.8
9 10
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Enter ing a new era
RA has yet to achieve influence at the very
highest level; only one in five (21 percent) of
respondents say their RA function reports directly to the BoardofDirectors.Andjust24percentofRAdepartments
hold fully centralized control over their organizations, which could
hinder the spread of consistent RA practices.
Formostofthetelecommunicationsproviderstaking part in the survey, RA reports to either theCFO(46percent)orthededicatedHeadofRA,whointurnreportstotheCFO(45percent).
Respondents from Africa and the Middle East are morelikelytohaveadirectlinetoFinance,withtheCFOplayingadualroleencompassingRA.
However,just21percentofRAfunctionsreportdirectlytotheBoardandonly11percenttothe
Audit Committee. These figures have nonetheless improved since the previous survey, and with virtually
all respondents claiming to have an independent RA department, RA is slowly gaining in importance.
Revenue Assurance’s evolving role in the organization
Just 21 percent of respondents say their RA function reports directlytotheBoardofDirectors
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Enter ing a new era
Revenue Assurance’s evolving role in the organizationWho does the RA team report to?
N = 78 respondentsFigures might not add up to 100% due to rounding.Source: KPMG Global Revenue Assurance Survey, 2012
Africa & Middle EastAsia PacificEurope & Americas
Global
38%53%6% 3%
56%40% 4%
Other seniormanagementmembers
Head ofInternal Audit
DedicatedRA Head CTO
CFO &DedicatedRA head CFO
4% 3% 45% 1% 1% 46%
47%6%35%
6%6%
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Enter ing a new era
Who does the RA team report to?
Audit
CommitteeBoard of Directors
Neither
Africa & Middle East 29% 21% 50%
Asia Pacific 6% 12% 82%
Europe & Americas 0% 28% 72%
RA teams reporting to the Audit Committee and/or Board of Directors
2009 2011
Africa & Middle East 30% 50%
Asia Pacific 6% 18%
Europe & Americas 15% 28%
N = 78 respondents
In Africa and the Middle East, RA appears to hold greater status, with half of the respondentssayingtheirRAfunctionhasastraightlinetoeithertheBoardortheAudit Committee. These two regions suffer particularly with leakage, so loss of revenuebecomesabigissuefortheBoard,whotakeagreaterinterestandwanttodeal more directly with the senior RA managers.
A number of respondents are concerned that RA’s lack of seniority inhibits itseffectiveness.Fifty-fourpercentarenotfullysatisfiedwiththeexistingcommunication with senior management, while a lack of career opportunities is considered one of the main reasons for staff attrition.
ButisRAlikelytostepupandgainBoard-levelrecognition?Itdependsuponwhoyouask.OftheRAHeadstakingpartinthesurvey,57percentfeelthataChiefRevenueAssuranceOfficerwouldbenefittheircompany,whereasonly25percentofCFOsseeaneedforsucharole.
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Enter ing a new era
Should your organization have a Chief RA Officer?
N = 90 respondents
Source: KPMG Global Revenue Assurance Survey, 2012
52% Yes
48% No
25% Yes
75% No
57% Yes
43% No
Global CXO Group responses RA Head responses
KPMG ViEWPOinT
Moving up?
RA/FraudManagementhasevolvedconsiderablyoverthelastfewyearsfromitsearlierroleasan‘assistant’tothewiderFinanceteam.Althoughthereissomewaytogobeforeit’s considered a true business advisor, a growing number of companies are involving RA in product, system and network planning in a bid to proactively prevent leakage and fraud. Currently,mostRAteamsultimatelyreporttotheCFO,whoisapowerfulsponsorabletoensure action is taken. However, given the volume of fraud and revenue leakage across the industry, the function needs to exert greater influence at the very top of organizations – but ifBoard-level‘impact’istobecomeareality,organizationswillhavetocarefullyconsiderthe RA function’s independence.
Joe Gallagher Head of Telecommunications and Media Europe, Middle East & Africa
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Enter ing a new era
Creating an effective RA structure
It’snotjustthestatusofRAthatcanimpactitseffectiveness;organizationalstructure is an important factor in achieving consistent practices and enabling informationtoflowfreely.Onlyaquarter(24percent)ofrespondentsclaimtohaveacentralizedRAfunctionwithrepresentativeswithineachbusiness/operatingunit.Giventhatamajorityalsofeelit’sachallengetogetholdofaccurateinformationfrom the business, a lack of centralization could restrict the ability to prevent and identifyleakage.RArepresentationineachbusiness/operatingunitcanalsobebeneficial,asitgivesasinglepoint-of-contactforallleakageandfraudissuesandalso facilitates efficient implementation of RA activities.
Fromaregionalperspective,respondentsfromEuropeandtheAmericasappeartohave the most sophisticated, centralized organizational structures, while businesses in Asia Pacific are far more likely to be decentralized. Interestingly, those regions with greater centralization also have a better record at identifying revenue leakage.
Inkeepingwiththeprevious2009survey,thevastmajority(95percent)donotplanto move toward an outsourcing model in the next few years.
Structure of RA
0 10 20 30 40 50 60
Plan to move towards an outsourcingmodel in the next few years
Co-sourcing model for RA/FM
Completely de-centralized RA/FM withteams at all operating Units/Circles
Centralized with completeexecution at corporate level only
Centralized with a representativeat each operating Unit/Circle
N = 78 respondents
Europe & Americas GlobalAsia PacificAfrica & Middle East
Figures might not add up to 100% due to rounding.Source: KPMG Global Revenue Assurance Survey, 2012.
16%12%
12%
14%
16%
36%24%
52%47%
35%6%
6%3%
8%
4%
1%
0%0%
56%53%
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Enter ing a new era
Bringing your best people together
Accepting that some small companies with a limited number of operations may actually benefit from a more decentralized approach, there is a strong case for centralizing teams and bringing your best people together.
IndispersedRAfunctions,muchoftheknow-howexistswithinindividuals.A centralizedteam leads to greater knowledge sharing and standardization, with best practices emerging, and the added benefit of reduced staff numbers due to economies of scale. Companies must also be aware of legal restrictions on data sharing between countries, which may mean retaining local teams. A centralized department is also reliant on strong, integrated systems and processes. The pros and cons of centralizing should be properly considered from all angles before any decision is taken.
Peter Mercieca Head of Telecommunications & Media Asia Pacific
Fewerthanhalf(42percent)ofrespondentssaytheirRAfunctioniscross-functional with a balanced representation across departments. As mentioned, the complexity of the telecommunications environment means that leakage canoccuratanystageoftherevenuegenerationcycle.Cross-functionalmembership should bring an understanding of each part of the business and the accompanying interdependencies. In particular, a strong link between RA and the broader risk management function should be considered. Without such cross-functionalknowledge,it’sdifficulttogainanall-roundpicture,leavingcompanies more susceptible to leakage and fraud.
Only42percentofrespondents say their RAfunctioniscross-functional with a balanced representation across departments.
Is RA a cross functional team?
0
10
20
30
40
50
60
70
80
GlobalEurope & AmericasAsia PacificAfrica & Middle East
NoYes
N = 78 respondents
Source: KPMG Global Revenue Assurance Survey, 2012
48%52%
24%
76%
44%
56%
42%
58%
KPMG ViEWPOinT
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Enter ing a new era
Supporting the business
Most of the respondents say their RA function focuses primarily on network, billingandproduct-relatedassurance.However,considerablyfewerareinvolvedwithcustomerserviceandsalesassurance,andonlyathird(35percent)carryoutregulatory checks as part of a wider RA review. These findings are further evidence that RA is still viewed as more of a support function than a strategic partner.
RA departments in organizations from Asia Pacific appear to be particularly narrow in the scope of their responsibilities.
Andmost(64percent)donothaveacross-functionalRAsteeringcommitteecomprising of head of departments of all functions (who would meet periodically to assess the extent and sources of revenue leakage). Such a body can help spread best practice and extend the influence of RA. Respondents from Africa and the Middle East are the most likely to have such a committee, with organizations from Asia Pacific lagging behind.
Proportion of organizations with cross-functional RA steering committees
0
10
20
30
40
50
60
70
80
GlobalEurope & AmericasAsia PacificAfrica & Middle East
NoYes
N = 73 respondents
Source: KPMG Global Revenue Assurance Survey, 2012
48%52%
20%
80%
34%
66%
36%
64%
22
Enter ing a new era
85percentofRAfunctionsare formally involved in signing off on new projects
0 20 40 60 80 100
88%
68%
68%
88%
96%
79%
36%
29%
79%
79%
87%
52%
48%
90%
87%
86%
54%
51%
87%
89%
N = 70 respondents
Responsibilities held by the RA function
Figures might not add up to 100% due to rounding.Source: KPMG Global Revenue Assurance Survey, 2012.
RA checks – network assurance (yes %)
RA checks – product assurance (yes %)
RA checks – customer service assurance (yes %)
RA checks – sales assurance (yes %)
RA checks – rating, collection and partner payment assurance (yes %)
Africa & Middle East
Asia Pacific
Europe & Americas
Global
Amajority(85percent)ofRAfunctionsareformallyinvolvedinsigningoffonnewprojects,whichindicatesthattheriskofleakageandfraudisabigconsiderationwhen launching products, billing systems and migrations, or when moving into new geographies. In Europe and the Americas however, only 31 percent of RA functions actually have mandatorysign-offonsuchinitiatives;inAsiaPacificthisfigure is 77 percent.
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Enter ing a new era
The intense competition in Asia Pacific sees new products rolled out every few days, which leaves providers highly susceptible to leakage, so there is a move to tighten up procedures. Companies in more established markets, on the other hand, have a longer time frame so can build more checks and balances into the development process.
RA has traditionally had a role in new product launches, but is slowly gaining influence in IT and network implementation, which should help to weed out any potential flaws atanearlierstageandprovideamoreholisticevaluationoftheproject.
To outsource or not to outsource?
Even though most operators already outsource core functions such as networks, billing and customer services, there seems to be a preference for retaining RA in-house.FortypercentofrespondentssaytheywouldnevercontractoutRAtoa thirdpartyandafurther40percentwouldonlyallowpartialoutsourcing.Thesefindings are very similar to the previous 2009 survey.
KPMG ViEWPOinT
Would you outsource RA?
GlobalEurope & AmericasAsia PacificAfrica & Middle East
Partially NoYes
N = 84 respondents
Source: KPMG Global Revenue Assurance Survey, 2012
0
10
20
30
40
50
40%40%
29%
35%36%
11%
19%
39%42%
20%
45%44%
Adding more value
RA is in an ideal position to look at the entire revenue cycle and identify opportunities for cost savings and revenue enhancement. Through data analytics and modeling, RA professionals also gain a unique understanding of customer behavior and could make an important contribution to marketing and improving the overall customer experience – a big area of focus for the sector.
Romal Shetty Head of Telecommunications & Media KPMG in India
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Enter ing a new era
With most RA functions still evolving, telecommunications providers are wary of passing such a sensitive part of the business to third parties, especially given the growing need for strong governance over revenue. In future it’s possible that certain activities may be outsourced to benefit from new, advanced technologies.
Fraud management is still emerging
Themanagementoffraudisanevolvingactivity;40percentofthesurveyrespondentshaveadedicatedfraudmanagementfunction,andintwo-thirdsofcases this department is less than ten years old. Consequently, it’s no real surprise thatonly44percentclaimtohaveafraudriskmanagementframeworkinplace.
Fraudmonitoringteamsarebecomingincreasinglyempowered,withmost (77 percent) having the authority to take independent remediation action, such asdisconnectingsubscribers.Almosthalfoftheseteams(47percent)have‘readand write’ access to operation and business support systems and 82 percent use fraud-basedalarmmonitoring.
Is your fraud management team empowered to takeactions to remediate issues?
77%
22%
1%
Other
No
Yes
N = 64 respondents
Source: KPMG Global Revenue Assurance Survey, 2012
Half(49percent)oftherespondentsclaimtouseacombinationofin-houseandthirdpartyRA/fraudmanagementtoolswhenaddressingfraud,whichsuggests that many telecommunications providers limit their focus to revenue-relatedfrauds.
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Enter ing a new era
KPMG ViEWPOinT
A need for more analytical rigor
RA/FraudManagementtoolsinusetodayareoftennotintegratedand fail to identify, monitor and report a significant number of revenue fraudsletaloneinstancesofnon-revenuefraud.Companiesneedtoconsider how to strategically and proactively address these threats. Advanced data analytic techniques can identify suspected fraudulent activityacrossvariousfunctionsonarealornear-real-timebasis,andcouldhelpproactivelyidentifyand/orpreventfraudulentactivities.
Carl Geppert Global Telecommunications & Media Advisory Lead KPMG in the US
However, fraud management still has some way to go before it can be regarded as a senior-leveloperatingfunction.Fewerthanhalfofthecompaniesinthesurveyhavededicatedfraudmanagementheads,withthemajorityreportingtoeithertheHeadofRA,theCFOorinsomecasestheCEO.AndliketheirRAcounterparts,relativelyfew fraud teams report to the highest levels in the organization; 27 percent report to theBoardofDirectorsand16percenttotheAuditCommittee.
The overall scope of responsibility of fraud management departments appears to be reactive or tactical rather than strategic. Most respondents say their teams carry out continuous monitoring and fraud identification, with limited involvement in forensic investigations, and little or no evidence of a whistle blower policy and code of conduct–cornerstonesofproactivefraudmanagement.Fewclaimtohaveabrieftobuildanorganization-wideanti-fraudculture.
Use of RA and fraud management tools
No, neither RA nor FM tools
Yes - only FM tools
Yes - only RA tools
Yes, both RA and FM tools – Thirdparty tools on RA and FM
Yes, both RA and FM tools – In-housedeveloped tools and dashboards
Yes, both RA and FM tools – Third party tools onRA and FM & test call generators
Yes, both RA and FM tools – Third party tools on RAand FM, In-house developed tools and dashboards& test call generatorsN = 68 respondents
Figures might not add up to 100% due to rounding.Source: KPMG Global Revenue Assurance Survey, 2012.
22%
1%
9%
3%
59%
3% 3%
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Enter ing a new era
Structure of Fraud Management team
Centralized with complete execution at corporate level only
Co-sourcing model for FM team
Outsourced FM teams
N = 49 respondents
Figures might not add up to 100% due to rounding.Source: KPMG Global Revenue Assurance Survey, 2012.
84%
12%
4%
KPMG ViEWPOinT
It’s time for fraud management to come of age
Fromourresearchitisclearthatthereisagrowingincidenceoftelecommunicationsfraudbeing perpetrated internally, externally or in collusion with employees and channel partners and, as such, there is – in our view – an increasingly compelling case for a separate and independent function to address these challenges.
Non-revenuefraudscanalsocontributetosubstantiallosses,soit’simportanttolookbeyondrevenue-relatedfraudssuchasde-dupingandusage.Andit’snotjustaboutidentifying frauds at the subscriber end; organizations should proactively check for internal vulnerabilitiesbywideningthescopeofthefraudmanagementfunction.Awell-structuredfraud management team could not only identify criminal behaviour earlier, but also help to spot the potential process gaps that allow frauds to occur in the first place.
Fraudscanoccuranywhereintherevenuecycle–procurement,sales,finance,humanresources, supply chain management or customer services – so fraud management personnel need to understand every aspect of the revenue cycle to identify frauds (and the potential for fraud) at any stage.
Joe Gallagher Head of Telecommunications & Media Europe, Middle East & Africa
IncontrasttoRAfunctions,84percentofthecompaniesinthesurveyhaveacentralizedFraudManagementteam,whichwillaidconsistency.Notsurprisinglygiventhesensitivenatureoffraud,onlyasmallproportionoutsourceorco-sourcethisactivity.
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Enter ing a new era
AgrowingnumberofRAfunctionsarebecomingself-funding,as telecommunications companies develop more sophisticated approaches to preventing and detecting leakage. However, less than half of the respondents link RA performance to management incentives.Fifty-sixpercentofrespondentssaytheirRAfunctionisself-funding(i.e.therevenue recovered from subscribers and other partners is greater than the cost of running the department), which is an improvement on the 2009 survey, when the figurewas46percent.Afurther22percentexpecttobecomeself-fundingwithinthe next three years.
Thelonger-establishedRAfunctions(thoseinoperationmorethan10years)appearto be struggling to realize efficiencies, as most of these have not managed to becomeself-funding,whichsuggeststhattheyfindithardertochangeoldwaysofworking.
On a regional basis, companies from Europe and the Americas are most likely to haveself-fundingRAteams(76percent),whilethosefromAsiaPacificareleasteffective,withonly36percentclaimingtorecoverrevenuethatexceedstheirrunning costs. Interestingly, RA functions in Africa and the Middle East recover proportionallylessrevenuethanthoseinAsiaPacific,butstillachievehigherself-funding rates, which is probably due to lower operational costs.
56percentofrespondents claim to have a self-funding RAfunction–upfrom46percentin2009
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Enter ing a new era
InmyroleasaCFOatBTGlobalServicesIwouldexpectthat,attheveryleast,myRAandFraudManagementteam
wouldbeselffunding,directlyimprovingmyEBITDAandcreatingquantifiablevaluetomyorganization.
Hugo Eales CFO BT Global Services
Europe & Americas
0 10 20 30 40 50 60 70 80
47%
23%29%
2%16%
7%11%
2%6%
10%11%
7%9%
13%14%
12%13%
56%76%
36%
When will RA become a self-funding, independent function in your organization?
Asia PacificAfrica & Middle East Global
It is already self-funding
Next 1–3 years
Next 1 year
Next 3–5 years
More than 5 years
N = 99 respondents
Figures might not add up to 100% due to rounding.Source: KPMG Global Revenue Assurance Survey, 2012.
Of course, there is a strong correlation between the ability to identify and recover leakageandtheincidenceofself-funding.Thesurveysuggeststhatthemajorityofcompanieshavenotyetbuiltsuchlinkagesintotheirplanning;86percentofrespondents say their RA budget is not dependent on leakage identified, and few say their RA function has specific leakage identification targets.
Onlyathirdofsurveyparticipantsclaimtohaveapre-definedsavingstarget,whichcould lead to a lack of focus for the RA team.
Sharpening operations
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Enter ing a new era
Proportion of companies with standard RA operating procedures (SOPs)
0
20
40
60
80
100
Europe & AmericasAsia PacificAfrica & Middle East
Data sources
Execution process
Issue aging
KPIs and threshold limitsTurn around time for closure
Escalation matrix
88%92%
54%
45%
57%61%
73%
82%
55%
45% 45%
82%
72%
86%
66%
22%
39%
79%
N = 65 respondents
Respondents could select more than one response option.Source: KPMG Global Revenue Assurance Survey, 2012
A move towards standardization
AnRAfunctionshouldnotjustbemeasuredbytheleakageidentifiedandtheamounts recovered, but also by the prevention processes it has in place. When it comes to defining data sources and execution processes for RA activities, most of the organizations involved in the survey say they have strong standard operating procedures.
However, the responses are less emphatic when it comes to procedures for escalationmatrices,turnaroundtimesforclosureandissueaging.Forexample,onlya fifth (22 percent) of companies from Europe and the Americas include turnaround timeforissueclosureintheirstandardoperatingproceduresandonly35percenthave a formal process for issue closure.
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Enter ing a new era
Enhancedautomation and issue tracking incumbent withnewRAtoolsisanimportant goal for us in2012.We’veworkeddiligently to assess, procure, and implement a new toolset to enable improvedidentificationand recovery.
Jay M Franklin Director, Accounting SprintThe right tools for the job?
Automation can save time and resources and free up RA personnel to spend more time on strategic issues, so it’s reassuring that 78 percent of the companies involved inthesurveyusesomekindofRA/fraudmanagementtool.Asthechartonpage32shows,EuropeandtheAmericashavethehighestpresenceofRA/fraudmanagementtools (at 81 percent), closely followed by Africa and the Middle East at 79 percent.
However,morethanathird(36percent)ofrespondentsarenotsatisfiedwiththesetoolsand44percentsaytheyhaveonlybroughtlimitedautomation,ascanbeseenonthe‘Satisfaction with RA Tool’ chart on page 32. In some cases, staff may not be sufficiently trained to make effective use of a tool, which could impact the benefits. In other instances the RA team may not have been fully involved during the initial business case and configuration of the tool, which reduces the sense of ownership and accountability.
On a more positive note, there are signs of a more standardized approach to RA, with,69percentclaimingtocarryoutreviewsofRAactivityoneitheramonthlyorquarterly basis, which should help to assess performance more rigorously.
KPMG ViEWPOinT
Know what you want
Many telecommunications companies have not seen a good return for the large sums invested in tools, so a rigorous evaluation process is needed to agree the precise requirements and ensure that vendors meet theseobjectives.
Romal Shetty Head of Telecommunications & Media India
KPMG ViEWPOinT
Plugging the gaps
Without a proper escalation matrix, any issues raised may fail to reach the right levels of management, while the lack of an agreed and defined metric for turnaround time for closing issues could limit the ability to recover revenue, as it becomes harder to trace sources of leakage over time.TheBoard,CFOorRASteeringCommitteewillbeverykeentoensurethatissueshavebeenresolvedquickly,soclosure/remediationisavitalobjectivethatrequiresaformalprocess.
Peter Mercieca Head of Telecommunications & Media Asia Pacific
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Enter ing a new era
Presence of RA/FM tool
NoYes
0
20
40
60
80
100
Europe & AmericasAsia PacificAfrica & Middle East
21%
79%
31%
69%
19%
81%
N = 68 respondents
Source: KPMG Global Revenue Assurance Survey, 2012
Satisfaction with RA tool
0 20 40 60 80 100
Global
Europe & Americas
Asia Pacific
Africa & Middle East
Very satisfiedSatisfiedNot satisfied
43% 39% 18%
39% 39% 22%
29% 50% 21%
36% 44% 20%
N = 89 respondents
Source: KPMG Global Revenue Assurance Survey, 2012
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Enter ing a new era
20–50% 50–70%
Percentage of RA checks automated
85–100%70–85%0–20%
15%
29%
20%
24%
13%
N = 56 respondents
Figures might not add up to 100% due to rounding.Source: KPMG Global Revenue Assurance Survey, 2012
Linking performance with incentives
Seventy-threepercentofrespondentssaytheircompanieshavedefinedkeyperformance indicators (KPIs) and threshold limits at an operational level for their RA function, which brings greater accountability for revenue prevention, identification and recovery. This trend is less pronounced in Africa and the Middle East.
However, many telecommunications providers have so far been unwilling to take ultimate responsibility for RA at the very highest levels. More than half (52percent)oftheexecutivestakingpartinthesurveysaytheirseniormanagementis not rewarded against performance of the RA function, in terms of the cost of leakage and the value of revenue recovered. And only 21 percent of respondents’ companies incentivize business function heads outside of RA, which reflects a lack oforganization-widefocusonleakage,preventionandrecovery.
This reluctance to link RA performance with incentives is also due to the lack of a common standard for measuring leakage, making it hard to compare the effectiveness of prevention and identification activity between different products.
Executives rewarded against RA performance
Yes
No
0 10 20 30 40 50 60
48%
52%
N = 91 respondents
Figures might not add up to 100% due to rounding.Source: KPMG Global Revenue Assurance Survey, 2012
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Enter ing a new era
The power of people
KPMG ViEWPOinT
A burning platform
RA departments in regions such as Africa face very high leakage levels and need strong technical competence today to counter this threat, so choose to employ experienced telecommunications engineers. In markets such as the US and Europe, RA teams have matured over time, enabling staff from a variety of backgrounds to build up sufficient skills, so there is less need to recruit new specialists. There is also likely to be greater collaboration with the network group, which has vital RA knowledge, whereas in emerging countries the assurance tends to be more independent.
Ron Stuart Head of Telecommunications & Media KPMG in South Africa
RA functions appear to have a good mix of technical and business competence, but a number also lack key technical and telecommunicationsindustryskills.Amajorityexpecttobuildtheir teams through nurturing existing employees rather than via external recruitment.The respondents to the 2012 survey seem to have a healthy spread of skill sets in their RA teams, with a broader balance and an increase in technical skills compared to the previous report in 2009. Half of all staff are graduates and more than a quarter aretelecommunicationsengineers,withanumberofMBAs,accountantsandotherengineers.
Companies in Africa and the Middle East report the highest proportion of telecommunications engineers, while those from Europe and the Americas have relatively few individuals with such a background. Operators in the Asia Pacific region employ fewer graduates, although a high proportion of these people have gainedMBAs,whichshouldbringstrongbusinessskillstothefunction.
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Enter ing a new era
0 10 20 30 40 50 60
Skill sets in your organization’s RA function
Asia Pacific
Africa & Middle East
Global
Europe & Americas
% Chartered accountants/accountants
% of MBAs
% of telecom engineers
% of other engineers
% of graduates
% of others
13.0%16.7%
20.4%17.1%
8.2%21.4%
7.2%10.2%
39.3%31.6%
14.6%26.5%
25.6%34.1%
19.4%24.5%
52.5%31.9%
53.1%49.4%
21.4%25.3%
27.0%25.4%
Respondents were able to give multiple answers so percentages may not add up to 100.Figures might also not add up to 100% due to rounding.Source: KPMG Global Revenue Assurance Survey, 2012.
N = 50 respondents
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Enter ing a new era
However, there is still significant room for improvement, with respondents claiming tobemostinneedofadditionalanalyticalskills,closelyfollowedbynetwork/systems-relatedskillsandtelecommunicationssectorandbusinessknowledge.ThoseRAteamsthathavecross-functionalrepresentationmaybeatanadvantage,as such a composition provides an excellent opportunity for knowledge transfer from other parts of the organization, helping to develop skills such as customer service assurance, sales assurance and regulatory assurance.
Skills lacking in RA personnel
0
10
20
30
GlobalEurope & AmericasAsia PacificAfrica & Middle East
3%
7%
24%
9%
1%
13%
17%19%
14%
23%
15%
0%
17%
20%18%
19%
14% 14%13%
19%20%
22%
12%
2%
12%
15%
19%17%
N = 86 respondents
Finance-oriented knowledge
Analytical skills Knowledge of RA and Fraud Management tools
Audit and other investigative skills Technical i.e. networks and systems related
Audit and other investigative skills, Finance oriented knowledge Telecom sector and business knowledge
Respondents were able to give multiple answers so percentages may not add up to 100.Figures might also not add up to 100% due to rounding.Source: KPMG Global Revenue Assurance Survey, 2012
70percentofrespondentssayRAhaslower staff attrition than other departments
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Enter ing a new era
On-the-jobtrainingforRApersonnelseemstobethefavoredapproachforthevastmajority(89percent)ofrespondents,whichreflectsthehighlyspecializednatureofthework.Worryingly,almost60percentofoperatorsadmittohavingnomandatorytraining hours for the RA function, something that they should be keen to address, given the continued high revenue leakage rates.
Since the previous survey in 2009, there seems to be an improvement in the level of audit and investigative skills amongst RA personnel. A number of providers perceived themselves to be weak in this area and have been recruiting people with such a background.
Maintaining a strong RA talent pool
According to the executives taking part in the survey, RA professionals are fairly content with their roles and prospects, with 70 percent of respondents reporting a lower staff attrition rate than in other departments within their organizations.
When questioned why people may leave, the number one reason is low compensation, followed by a lack of adequate career progression opportunities, which is probably directly linked to the aforementioned low status of the RA function.
GreaterRArepresentationatBoardlevelshouldnotjustleadtobetterpracticesacross the business; it would also help retain the best talent.
37
Enter ing a new era
Reasons for attrition in the RA function
0 1 2 3 4
Skill set not matchingwith job requirements
High work load and pressure
Compensation
Lack of adequate careerpath (slow vertical growth)
Europe & Americas Rank Global RankAsia Pacific RankAfrica & Middle East Rank
N = 86 respondentsFigures might not add up to 100% due to rounding.Source: KPMG Global Revenue Assurance Survey, 2012.
Ranks for reasons of attrition
12
11
2333
31
22
4444
Fortwothirdsoftherespondents,internalpromotionisstronglyfavoredoverrecruitment, reflecting the highly specialized nature of RA. An experienced RA professionalneedstohaveanin-depthunderstandingoftheentirerevenuecycle along with the systems involved, and such individuals may be hard to find on the open market.
Many respondents say they are prepared to look beyond the RA department to otherpartsofthebusiness;onceagainabroadcross-functionalRAnetworkshouldincrease the chances of good candidates emerging, with appropriate people picked out and groomed.
Operators from the Africa and Middle East are the most likely to recruit externally, which is indicative of a greater need for analytical skills in this part of the world.
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Enter ing a new era
Peoplecapabilitiesareakeyenablerforagrowingbusinesslikeours.Wehavebeenworkinghardtobuildin-houseRAtalentthroughanRAAcademy,graduatetraineeschemes,trainingonITToolsandfieldvisitstodifferentcountries.Wearemotivatedbybenchmarkingthatshows our gaps and hence opportunities to improve further.
B.Srikanth Group CFO Bharti Airtel
How would you build RA function
Asia Pacific Europe & Americas
N = 84 respondentsFigures might not add up to 100% due to rounding.Source: KPMG Global Revenue Assurance Survey, 2012
54% Acquiring talent from industry
46% Internal vertical growth
78% Acquiring talent from industry
22% Internal vertical growth
63% Acquiring talent from industry
37% Internal vertical growth
Africa & Middle East
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Enter ing a new era
KPMG ViEWPOinT
Broadening horizons
With qualified RA resources in high demand and scarce supply, telecommunications companies should try to create clear and compelling, compelling career paths for their bestpeople,whichmayentailformalcross-trainingandjobrotation.Itisimportanttoprovide opportunities for personal growth both within and outside the RA organization – for example, companies could widen the scope of RA to include revenue enhancement activities such as marketing and customer service, as well as cost management and profitability activities, such as product profitability assessment. A rotation in the RA group for personnel from other parts of the organization can also bring new perspectives into the function and both help the RA function become more valuable to the business and also help the rest of the business understand RA better.
Carl Geppert Global Telecommunications & Media Advisory Lead KPMG in the US
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Enter ing a new era
In an increasingly complex and changing telecommunications environment, the threat of revenue leakage and fraud is greater than ever. To counter this challenge, providers need to build consistent defenses by transforming RA functions and operations.
Ten key takeaways
1 Empower and develop greater influence for the RA function, to evolve toward a Board-levelposition,whilemaintainingfullindependence.
2Broaden the scope of RA from network and billing to include sales, marketing, customer service, regulatory assurance and risk management – to help the function move away from mere finance support toward a much wider role.
3Create a strong, centralized structure withasinglepoint-of-contactateachbusiness/operatingunit,alongwithcross-functionalteamsandacentralRASteeringCommittee.
4 Get proactively involved in new projects right from the planning stage, including IT andnetworkimplementation,togiveamoreholisticevaluationofnewprojects.
5Ensure firm governance to manage outsourcing of core telecommunications operations such as IT, technical services and customer service, while retaining the main RA function in-house.
6 Make the most of the right RA tools by ensuring complete involvement in the selection,configurationandset-upofnewtools.
7Be more preventative by placing greater emphasis on early identification of possible revenue leakage, and set clear KPIs across the business. Look at specific configurations ratherthanjustfinalratingandbilling.
8Implement a revenue recovery mechanism based on ambitious but achievable timescales. Develop effective processes that focus not only on revenue leakage identification but on revenue recovery.
9Invest in the right technical skills within the RA team, and give individuals exposure to leadingpracticesacrosstheglobetoallowthemtogainanin-depthunderstandingoftheentire revenue cycle along with the accompanying systems.
10Create an appealing career path for RA personnel to attract the best talent. Nurture stafffromotherbusiness/operatingunitstohelpthemdevelopRAskills,shareknowledge and spread best practice.
Conclusion and key takeaways
41
Enter ing a new era
About the surveyParticipating countriesRespondentsfrom62countriestookpartintheRAsurvey.
Country
Afghanistan
Algeria
Anguilla
Armenia
Australia
Bahrain
Belgium
Benin
Bhutan
Brazil
Bulgaria
Canada
China
Cyprus
Czech Republic
Finland
Gabon
Ghana
Guinea-Bissau
Hungary
India
Country
Indonesia
Iran
Italy
Ivory Coast
Japan
Jordan
Kenya
Korea (South)
Liberia
Malaysia
Netherlands
Nigeria
Pakistan
Peru
Philippines
Poland
Portugal
Qatar
Republic of the Congo
Romania
Russia
Country
Rwanda
Saudi Arabia
Slovakia
South Africa
Spain
Swaziland
Sweden
Switzerland
Syria
Taiwan
Thailand
Togo
Tunisia
Uganda
Ukraine
UK
US
Uzbekistan
Yemen
Zambia
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Enter ing a new era
Operator classification
0
10
20
30
40
Europe & AmericasAsia PacificAfrica & Middle East
MobileFixed line + mobileFixed line
3%
11%
26%
1%
12%
19%
4%
40%
12%
Figures might not add up to 100% due to rounding.Source: KPMG Global Revenue Assurance Survey, 2012
OperatorsThe respondents represented 137 different telecommunications operators.
43
Enter ing a new era
Regional distribution
31%
27%
42%
Europe & Americas
Asia Pacific
Africa & Middle East
Source: KPMG Global Revenue Assurance Survey, 2012
Scale of operations
0 10 20 30 40 50 60
Between 500–1000 million
Greater than 1 billion
Between 250–500 million
Between 100–250 million
Less than 100 million
13%
17%
51%
14%
5%
All figures in US$.Source: KPMG Global Revenue Assurance Survey, 2012
44
Enter ing a new era
45
Enter ing a new era
Some important data points
Region Africa & Middle East Asia Pacific Europe & Americas Global
Subscriber base
Up to 1 million 16% 0% 8% 9%
1–10 million 68% 27% 46% 49%
10–50million 8% 33% 15% 16%
Greaterthan50million 8% 40% 31% 25%
RA team size
Upto5members 38% 27% 42% 38%
6–15members 57% 33% 26% 36%
16–50members 5% 20% 16% 14%
Greaterthan50members 0% 20% 16% 12%
FM team size
Upto5members 86% 27% 24% 43%
6–15members 14% 55% 38% 35%
Morethan16members 0% 18% 38% 22%
RA – Contractors vs. in-house
No contractors 28.57% 85.71% 72.22% 58.97%
Upto50%contractors 64.29% 0.00% 22.22% 33.33%
Morethan50%contractors 7.14% 14.29% 5.56% 7.69%
FM – Contractors vs. in-house
No contractors 57.14% 62.50% 66.67% 62.50%
Upto50%contractors 28.57% 12.50% 11.11% 16.67%
Greaterthan50%contractors 14.29% 25.00% 22.22% 20.83%
Age of RA function
Up to 3 years 50.00% 23.53% 19.05% 29.41%
4–10years 50.00% 64.71% 61.90% 58.82%
Greater than 10 years 0.00% 11.76% 19.05% 11.76%
Age of FM function
Up to 3 years 47.06% 33.33% 10.71% 26.67%
4–10years 41.18% 40.00% 39.29% 40.00%
Greater than 10 years 11.76% 26.67% 50.00% 33.33%
Leakage as a percentage of revenue
Up to 1% 50.00% 75.00% 65.63% 63.51%
Between1–10% 31.82% 15.00% 18.75% 21.62%
Greater than 10% 18.18% 10.00% 15.63% 14.86%
Recovery percentage
Up to 10% 40.00% 10.00% 20.83% 22.73%
10–25% 10.00% 0.00% 4.17% 4.55%
25–50% 40.00% 10.00% 20.83% 22.73%
Greaterthan50% 10.00% 80.00% 54.17% 50.00%
Internal vs. external fraud
Mostly internal fraud 23.81% 44.44% 46.67% 35.56%
Mostly external fraud 76.19% 55.56% 53.33% 64.44%
Revenue vs. non-revenue fraud
Mostlynon-revenuefraud 35.29% 50.00% 22.22% 35.29%
Mostly revenue fraud 64.71% 50.00% 77.78% 64.71%
Subscriber base vs. team size – RA
Up to 1 million 2.7 0.0 2.7 2.7
1–10 million 5.9 7.5 20.8 12.9
10–50million 14.5 12.8 34.0 22.7
Greaterthan50million 6.0 69.5 50.0 52.4
Grand total 6.3 34.4 30.3 23.4
Subscriber base vs. team size – FM
Up to 1 million 2.00 0.0 6.00 3.00
1–10 million 4.29 11.25 15.00 11.40
10–50million 4.00 13.00 46.33 23.25
Greaterthan50million 1.00 10.75 112.60 60.70
Grand total 3.46 11.55 39.91 23.19
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Enter ing a new era
Scale of operations (based on revenue)
Region Less than 100 Million
Between 100–250 Million
Between 250–500 Million
Greater than 500 million Global
Subscriber base
Up to 1 million 20% 43% 0% 0% 11%
1–10 million 33% 43% 50% 57% 48%
10–50million 13% 14% 25% 14% 15%
Greaterthan50million 33% 0% 25% 29% 26%
RA team size
Upto5members 27.27% 50.00% 80.00% 33.33% 38.78%
6–15members 27.27% 33.33% 0.00% 40.74% 32.65%
16–50members 18.18% 16.67% 20.00% 18.52% 18.37%
Greaterthan50members 27.27% 0.00% 0.00% 7.41% 10.20%
FM team size
Upto5members 30.00% 66.67% 0.00% 55.00% 45.71%
6–15members 30.00% 33.33% 100.00% 30.00% 34.29%
Morethan16members 40.00% 0.00% 0.00% 15.00% 20.00%
RA – Contractors vs. in-house
No contractors 40.00% 33.33% 100.00% 66.67% 59.26%
Upto50%contractors 20.00% 66.67% 0.00% 27.78% 29.63%
Morethan50%contractors 40.00% 0.00% 0.00% 5.56% 11.11%
FM – Contractors vs. in-house
No contractors 60.00% 100.00% 100.00% 50.00% 61.11%
Upto50%contractors 0.00% 0.00% 0.00% 20.00% 11.11%
Greaterthan50%contractors 40.00% 0.00% 0.00% 30.00% 27.78%
Age of RA function
Up to 3 years 35.71% 42.86% 40.00% 25.81% 31.58%
4–10years 50.00% 57.14% 60.00% 51.61% 52.63%
Greater than 10 years 14.29% 0.00% 0.00% 22.58% 15.79%
Age of FM function
Up to 3 years 36.36% 50.00% 66.67% 20.83% 30.95%
4–10years 9.09% 50.00% 33.33% 33.33% 28.57%
Greater than 10 years 54.55% 0.00% 0.00% 45.83% 40.48%
Leakage as a percentage of revenue
Up to 1% 0.00% 77.78% 40.00% 86.36% 63.51%
Between1–10% 31.25% 22.22% 60.00% 13.64% 21.62%
Greater than 10% 68.75% 0.00% 0.00% 0.00% 14.86%
Recovery percentage
Up to 10% 50.00% 0.00% 50.00% 14.81% 22.73%
10–25% 0.00% 0.00% 0.00% 7.41% 4.55%
25–50% 10.00% 60.00% 50.00% 18.52% 22.73%
Greaterthan50% 40.00% 40.00% 0.00% 59.26% 50.00%
Internal vs. external fraud
Mostly internal fraud 22.22% 40.00% 66.67% 25.00% 30.30%
Mostly external fraud 77.78% 60.00% 33.33% 75.00% 69.70%
Revenue vs. non-revenue fraud
Mostlynon-revenuefraud 42.86% 66.67% 50.00% 30.77% 40.00%
Mostly revenue fraud 57.14% 33.33% 50.00% 69.23% 60.00%
Subscriber base vs. team size – RA
Up to 1 million 2.3 3.5 0.0 0.0 2.8
1–10 million 13.5 5.0 4.0 8.7 9.1
10–50million 50.0 22.0 16.0 20.0 27.3
Greaterthan50million 60.3 0.0 5.0 55.0 51.6
Grand total 28.5 7.8 8.3 24.1 22.2
Subscriber base vs. team size – FM
Up to 1 million 3.0 3.0 0.0 0.0 3.0
1–10 million 12.0 5.5 6.0 7.9 8.2
10–50million 50.0 0.0 0.0 15.0 29.0
Greaterthan50million 119.0 0.0 10.0 29.3 67.0
Grand Total 51.8 4.7 8.0 13.0 24.3
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Enter ing a new era
How satisfied you are with the RA/FM function on each of the following?
By region
Africa & Middle East Asia Pacific Europe &
Americas Global
Coverage of operations
Notsatisfied 10.71% 17.39% 18.92% 15.91%
Satisfied 71.43% 52.17% 59.46% 61.36%
Verysatisfied 17.86% 30.43% 21.62% 22.73%
Quality of work performed
Notsatisfied 14.29% 8.70% 0.00% 6.74%
Satisfied 53.57% 60.87% 52.63% 55.06%
Verysatisfied 32.14% 30.43% 47.37% 38.20%
Knowledge and skill sets
Notsatisfied 17.86% 17.39% 2.70% 11.36%
Satisfied 53.57% 56.52% 67.57% 60.23%
Verysatisfied 28.57% 26.09% 29.73% 28.41%
RA tool
Notsatisfied 42.86% 39.13% 28.95% 35.96%
Satisfied 39.29% 39.13% 50.00% 43.82%
Verysatisfied 17.86% 21.74% 21.05% 20.22%
RA methodology
Notsatisfied 7.14% 17.39% 5.41% 9.09%
Satisfied 46.43% 60.87% 59.46% 55.68%
Verysatisfied 46.43% 21.74% 35.14% 35.23%
Ability to handle technology transformational projects
Notsatisfied 7.87% 6.74% 11.24% 25.84%
Satisfied 15.73% 13.48% 19.10% 48.31%
Verysatisfied 7.87% 5.62% 12.36% 25.84%
How satisfied you are with the RA/FM function on each of the following?
RA Head responses
Africa & Middle East Asia Pacific Europe &
Americas Global
Coverage of operations
Not satisfied 13.04% 20.00% 20.00% 17.65%
Satisfied 73.91% 53.33% 60.00% 63.24%
Verysatisfied 13.04% 26.67% 20.00% 19.12%
Quality of work performed
Not satisfied 17.39% 6.67% 0.00% 7.35%
Satisfied 52.17% 60.00% 53.33% 54.41%
Verysatisfied 30.43% 33.33% 46.67% 38.24%
Knowledge and skill sets
Not satisfied 21.74% 20.00% 3.33% 13.24%
Satisfied 47.83% 46.67% 70.00% 57.35%
Verysatisfied 30.43% 33.33% 26.67% 29.41%
RA tool
Not satisfied 47.83% 46.67% 30.00% 39.71%
Satisfied 34.78% 33.33% 46.67% 39.71%
Verysatisfied 17.39% 20.00% 23.33% 20.59%
RA methodology
Not satisfied 8.70% 13.33% 6.67% 8.82%
Satisfied 43.48% 60.00% 56.67% 52.94%
Verysatisfied 47.83% 26.67% 36.67% 38.24%
Ability to handle technology transformational projects
Not satisfied 10.29% 7.35% 10.29% 27.94%
Satisfied 16.18% 8.82% 19.12% 44.12%
Verysatisfied 7.35% 5.88% 14.71% 27.94%48
Enter ing a new era
How satisfied you are with the RA/FM function on each of the following?
CXO responses
Africa & Middle East Asia Pacific Europe &
Americas Global
Coverage of operations
Not satisfied 0.00% 12.50% 14.29% 10.00%
Satisfied 60.00% 50.00% 57.14% 55.00%
Verysatisfied 40.00% 37.50% 28.57% 35.00%
Quality of work performed
Not satisfied 0.00% 12.50% 0.00% 4.76%
Satisfied 60.00% 62.50% 50.00% 57.14%
Verysatisfied 40.00% 25.00% 50.00% 38.10%
Knowledge and skill sets
Not satisfied 0.00% 12.50% 0.00% 5.00%
Satisfied 80.00% 75.00% 57.14% 70.00%
Verysatisfied 20.00% 12.50% 42.86% 25.00%
RA tool
Not satisfied 20.00% 25.00% 25.00% 23.81%
Satisfied 60.00% 50.00% 62.50% 57.14%
Verysatisfied 20.00% 25.00% 12.50% 19.05%
RA methodology
Not satisfied 0.00% 25.00% 0.00% 10.00%
Satisfied 60.00% 62.50% 71.43% 65.00%
Verysatisfied 40.00% 12.50% 28.57% 25.00%
Ability to handle technology transformational projects
Not satisfied 0.00% 4.76% 14.29% 19.05%
Satisfied 14.29% 28.57% 19.05% 61.90%
Verysatisfied 9.52% 4.76% 4.76% 19.05%
Note: these percentages do not add up to 100%.
AcknowledgementsWewouldliketothankthefollowingpeoplefortheirvaluablecontributiontothis study:
Allsurveyrespondents,KPMGsponsoringpartnerRomalShettyandtheKPMGAdvisoryresearchteaminIndia,especiallyDeeptiSagarand RohanLobo.
TheKPMGInternationalprojectteam:JoannaWells,PeterValentin, InesMeier,SarahVella,JenniferSamuel,NatalieCousens,NancyBarrett,andDaneWolfe.
All KPMG firms’ partners who provided their insight, including Carl Geppert, Peter Mercieca, Joe Gallagher, Sean Collins and Ron Stuart.
49
Enter ing a new era
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