kpmg global revenue-assurance-survey-march2012

TELECOMMUNICATIONS

Entering a new era

Are new value propositions opening up for Revenue Assurance functions?

kpmg.com

KPMG INTERNATIONAL

Contents

03

05

08

16

© 2012 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. All rights reserved.

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

2

Enter ing a new era


Romal Shetty Head of Telecommunications KPMG in India

Sean Collins Global Chair Telecommunications & Media

Foreword

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Enter ing a new era


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.

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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.

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.

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. • Ne werrevenuestreamssuchasdata/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• RA functionshaveagoodmixoftechnicalandbusinesscompetence.• Sixt y-fivepercentexpecttogrowthroughinternaldevelopmentofpeople.

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Enter ing a new era


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.

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 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

• OutsourcingofcoreoperationslikeNetworkandIT.• HighnumberofValueAddedServices(VAS)parties

deployed.• Highnumberoftariffplansonamonthlybasis.

• Primaryfocusonrevenueleakageidentificationonly.• Needforcross-functionalestablishment.• Increasedfocusonproductandnetworkassurance.• CentralizedRAfunctions.

• DetailedprocessdocumentationaroundRAchecks.• Focusondevelopmentofanalyticalandtechnicalskills.• ExistenceofRAtooldeployment.• Lowrecoveryratesforidentifiedleakage.

Emerging trends

• Likelyincreaseinleakageowingtotransformationslikem-commerce,NextGenerationNetworksandconvergedservices.

• VisibilitytoAuditCommitteeandBoardofDirectors.• CreationofCXOpositionforRA.• PartialoutsourcingofRAfunction.

• PerformanceincentiveslinkedtoRAsavingsforRAandbusiness functions.

• DedicatedFraudfunctionswithincreasedvisibilityandempowerment.

• Establishmentoffraudriskmanagementframework.

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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.

Factors most likely to transform the telecommunications industry

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 leakage

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


Leakage as a percentage of revenue

Main objective of RA functions

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.

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%


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


Proportion of leaked revenue recovered from subscribers and partners

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.

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


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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


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


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

16

Enter ing a new era


Revenue Assurance’s evolving role in the organization

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?

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


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


16%12%

12%

14%

16%

36%24%

52%47%

35%6%

6%3%

8%

4%

1%

0%0%

56%53%

20

Enter ing a new era


KPMG VIEWPOINT

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


NoYes

N = 78 respondents


48%52%

24%

76%

44%

56%

42%

58%

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Enter ing a new era


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


NoYes

N = 73 respondents


48%52%

20%

80%

34%

66%

36%

64%

22

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.

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


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 %)


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.

23

Enter ing a new era


85percentofRAfunctionsare formally involved in signing off on new projects

KPMG VIEWPOINT

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

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.


Partially NoYes

N = 84 respondents


0

10

20

30

40

50

40%40%

29%

35%36%

11%

19%

39%42%

20%

45%44%

24

Enter ing a new era


Would you outsource RA?

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


Half(49percent)oftherespondentsclaimtouseacombinationofin-houseandthirdpartyRA/fraudmanagementtoolswhenaddressingfraud,whichsuggests that many telecommunications providers limit their focus to revenue-relatedfrauds.

25

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

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


22%

1%

9%

3%

59%

3% 3%

26

Enter ing a new era


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.

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


84%

12%

4%

IncontrasttoRAfunctions,84percentofthecompaniesinthesurveyhaveacentralizedFraudManagementteam,whichwillaidconsistency.Notsurprisinglygiventhesensitivenatureoffraud,onlyasmallproportionoutsourceorco-sourcethisactivity.

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

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Enter ing a new era


28

Enter ing a new era


56percentofrespondents claim to have a self-funding RAfunction–upfrom46percentin2009

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.

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


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

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.

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

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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 Sprint

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

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

The 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.

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

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Enter ing a new era


Presence of RA/FM tool

NoYes

0

20

40

60

80

100


21%

79%

31%

69%

19%

81%

N = 68 respondents


Satisfaction with RA tool

0 20 40 60 80 100

Global

Europe & Americas

Asia Pacific


Very satisfiedSatisfiedNot satisfied

43% 39% 18%

39% 39% 22%

29% 50% 21%

36% 44% 20%

N = 89 respondents


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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


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


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Enter ing a new era


The power of people

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.

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

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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


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


70percentofrespondentssayRAhaslower staff attrition than other departments

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


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

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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.

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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






39

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


Conclusion and key takeawaysIn 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.

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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


MobileFixed line + mobileFixed line

3%

11%

26%

1%

12%

19%

4%

40%

12%


OperatorsThe respondents represented 137 different telecommunications operators.

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Enter ing a new era


Regional distribution

31%

27%

42%

Europe & Americas

Asia Pacific



Scale of operations

0 10 20 30 40 50 60

Between 500–1000 million

Greater than 1 billion



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%


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%


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%


RA Head responses


Americas Global


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%


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%


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%


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



CXO responses


Americas Global


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%


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%


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%


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


Contact usForfurtherinformationaboutthispublicationandour member firms’ services, please contact:

Sean CollinsGlobal Chair, Telecommunications & Media T:+6565975080 E: [email protected]

Telecommunications & Media Regional Contacts

Europe, Middle East & AfricaJoe GallagherT:+442073113044E:[email protected]

Americas Carl GeppertT:+13032958827E: [email protected]

Asia PacificPeter MerciecaT:+61294559155E: [email protected]

IndiaRomal ShettyT:+918030654100E: [email protected]

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The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

© 2012 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 obligateorbindKPMGInternationaloranyothermemberfirmvis-à-visthirdparties,nordoesKPMGInternationalhaveanysuchauthority to obligate or bind any member firm. All rights reserved.

The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.

Designed by Evalueserve. Publication name: Entering a new eraPublication number: 120301 Publication date: March 2012

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kpmg global revenue-assurance-survey-march2012

Business

romal shetty

team size

team size

entire revenue

give multiple

ra team report

executives

joe gallagher