March 2003
Telecoms Flex New Revenue Assurance and Cost Management Muscles to Break Operational Slump, Boost Profits.
New
TRI Report Identifies Keys to Turnaround, Names ATS as Emerging Call
Simulation Vendor.
The market for revenue assurance and cost management solutions is in high gear as telecom carriers tackle tough operational problems that drag down their profit margins.
That’s the conclusion of a new report by Technology Research Institute (TRI) based on a survey of 88 carrier and vendor executives.
When the telecom crash occurred, it signaled the end to three years of unbridled growth and network overbuilds. At the time, telecoms were so busy launching services and attracting customers, they dropped the ball on operational efficiency.
And
some serious back office problems have resulted.
For instance, their:
*
Billing systems can crank out millions of invoices but can't
reconcile what's billed with what's fulfilled;
*
Provisioning systems rapidly deploy services but can't query the
switches to verify inventory accuracy;
*
Mediation systems can’t correlate data service usage across
multiple network elements and content providers;
*
Call usage information fails to get recorded as new services are
launched;
*
Interconnect bill verification has evolved into a complex
jurisdictional battle with hundreds of millions of dollars at stake; and,
* Corporate customer collections problems have grown due to overgenerous sales policies and incentives.
Many telecom executives now believe the latest revenue assurance techniques and solutions are vital for returning telecoms to operational health and dexterity.
Revenue assurance encompasses a variety of best practices that: audit operations; create Operational Support Systems (OSS) detection and feedback mechanisms; and efficiently correct errors.
The objective is to boost profits by optimizing operations, finding lost money, or retaining profitable customers.
“Several kinds of companies are jumping on the revenue assurance bandwagon, beginning to offer solutions,” said Dr. Lorien Pratt, lead analyst on the report, “As a call simulation platform vendor, ATS is in an important category of players as complex services and calling plans are introduced. Call simulation or testing is a natural entry point for selling RA data analysis software.”
Revenue assurance is like finding a $100 bill on the street,” said Pratt, “When you patch a revenue leak or find a lost asset, it's 'free' money because you don't need a big investment in network infrastructure or marketing dollars to realize it -- you just apply it to your bottom line.”
In the past, revenue assurance was relegated to an ad hoc committee that lived in the billing department. Today, the study finds new multi-disciplined assurance organizations sprouting up, often under the aegis of the Chief Financial Officer (CFO).
Dozens of consulting and software firms like ATS have also emerged to help. Here TRI forecasts excellent prospects as the merchant market grows from about $1 billion worldwide today to a $1.36 billion peak in 2005.
TRI’s report says that key challenges for vendors like ATS seeking to enter the revenue assurance marketplace are to continually enhance their data analysis software, add wireless data services testing, and expand into ASP offerings. Unlike the problems with the ASP industry as a whole, telecom vendors offering services in an ASP model are generally more robust than license-only providers.
TRI’s 555-page report entitled, “Revenue Assurance, Mediation and Cost Management Solutions in Telecommunications” profiles 61 vendors and analyzes opportunities for telecom assurance professionals, consultants, and software developers. A report synopsis is available at www.RevenueAssurance.org.
Founded in 1994, TRI is a market analyst firm focused on telecom billing, and operational support systems (OSS). For more information, contact Research Director, Dan Baker at 800-250-0958 or danb@technology-research.com
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