Revenue assurance and fraud management vendors have an advantage in the communications space, but they also encounter significant challenges

May 7, 2012

3 Min Read
From Revenue Assurance to Revenue Optimization

As other industry verticals -- including finance, retail, advertising and entertainment -- begin to merge with the communications space, revenue assurance and fraud management vendors have a unique position of advantage, but they also encounter significant challenges. They must ensure that they can account and bill for all services provided under a broad revenue management strategy, including all revenue relating to fraud, interconnect billing, roaming, switch and network billing, and any other customer touch points.

The launch of any new services that contain several new processes across a number of partners' platforms and multiple carriers is particularly susceptible to fraud and should be monitored closely. For example, it is critical to understand the role revenue assurance has in the digital commerce value chain. It helps enforce better financial control over partners' settlement processes, minimize revenue leakage and track content usage through its lifecycle if service providers want to remain a value-added component of the digital commerce value chain.

Advanced analytics, combined with monitoring and analysis, will transform data into customer-centric intelligence, supporting communications service providers' revenue optimization strategy. Deeper insight into customer behavior will help service providers attract and retain customers, as well as reduce revenue leakage. While the range of services telcos offer today has expanded and consumers continue to derive greater value from the connectivity provided, service plans have remained relatively static. Service providers must adopt a more creative approach to pricing that focuses on improving customer service, balancing demand against limited network resources and securing high-margin customers.

Revenue optimization will depend on subscriber data visibility and the ability to discover and plug previously undiscovered revenue leakage. While traditional mechanisms of revenue assurance and fraud focused on plugging revenue leaks, holistic revenue optimization strategy focuses on the bigger goal of not only minimizing revenue leakage, but also focusing on the ability to maximize revenue and margin and minimize costs for communications service providers by providing real-time subscriber data insight.

Advanced analytics plays a pivotal role helping service providers unearth and analyze the critical nuances that were previously tucked away in layers of uncorrelated subscriber data through the deft use of advanced pattern matching. Revenue optimization strategy is based on four fundamental pillars -- Assure, Insight, Increase and Monetize.

Hence the use of real-time analytics helps service providers leverage all data directly or indirectly related to customer demographics and behavior to adeptly understand and improve customer profitability without undermining core business objectives or processes. These solutions perform correlations across multiple business dimensions (e.g., products, services, channels, marketing, sales and support). They provide intelligent insight into the relationship between customer profitability and customer current and lifetime value, behavior and activity and other qualitative and actionable attributes across the customer lifecycle.

In my recently published report, "Decoding the Transformation From Revenue Assurance to Revenue Optimization," I have examined the transformation of the revenue assurance market, sized the revenue assurance and fraud market, identified key players in the space such as HP, WeDo, Subex, cVidya, TEOCO, Lavastorm and Connectiva Systems, and explained the nuances of holistic revenue optimization strategy.

— Ari Banerjee, Senior Analyst, Heavy Reading

This report is available only to subscribers of Heavy Reading's Telecom Software Subscription Service. For more information about this service, please contact:

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