The GRAPA Standards

I. Disciplines

 II. Domains

III. Levels of Assurance

IV. Principles

III. Levels of Assurance 

    The GRAPA "Levels of Assurance" specifications provide a clear definition of the different objectives that the revenue assurance practitioner can pursue. Each domain that is defined as "in scope" will have a "level of assurance" set for it.

    Each "level of assurance" provides management with a more extensive level of assurance from the least effective and reactive (leakage containment) to the proactive (risk containment) to the most extensive (revenue maximization). Each company has its own unique set of domains and levels of assurance to attain based upon managements goals and "appetite for risk".

III. Levels of Assurance (Objectives)

The first step in the assignment of revenue assurance responsibilities is the clear identification of the domain within which the activity is to be performed. The next step is then the identification of the “level of assurance” or the objective for that RA activity.

The word “assurance” can mean a lot of different things and management will in most cases require the revenue assurance team to apply a different level of “assurance” to a different domain.

The definition of revenue assurance needs to include the allocation of different “levels” of assurance to different areas, based upon management’s direction.
 
The five levels of assurance include:

Leakage identification and containment

This is the highest and least comprehensive of the levels of assurance. It is also the most traditional and conservative of revenue assurance objectives. Assuring against leakage and containment requires revenue assurance practitioners to seek out situations or systems where revenue that has been earned is not being accurately processed.

The job of revenue assurance in these cases is to find, diagnose and correct the leakages in an efficient and rationalized manner.  

Revenue Risk Containment

At a higher level of assurance, revenue assurance can set out to do more than simply FIND LEAKAGE THAT HAS ALREADY HAPPENED, but can actually get proactive and anticipate potential leakage situations and function to eliminate the risks before a leakage occurs. The saying “an ounce of prevention is worth more than a pound of cure” certainly applies in this case. When the revenue assurance practitioner actually prevents a revenue loss condition from developing, they contribute a significant added value to the firm at a significantly reduced cost.

It is for this reason that RA teams are getting involved in new product development and are creating change management procedures for network, billing and other operational groups.

Margin and Rate Plan Assurance

Another area where revenue loss is sharply felt by telcos’ is in the area of pricing for different products and services. The creation of “bundles”, “loss leader” and “combination offers” create exceedingly complex revenue tracking scenarios that can ultimately cost the company money because of the lack of a comprehensive revenue protection based analysis of the assumptions behind its development.

The assurance of revenue recognition and accounting for revenues properly is a specialized and critical aspect of some revenue assurance domains.


Revenue Stream Assurance

Many telcos are asking their revenue assurance teams to get even more proactive in their efforts. These managers define the assurance of revenues to include the protection and monitoring of risks not only to the actual revenues earned, but to the assurance of an expected revenue stream.

There are several ways that revenue stream assurance is being included:

Network Asset Downtime and Revenue Loss

When a carrier invests large sums of money in the installation of major network components (like and MSC) and that element suffers a number of outages, there can be significant and catastrophic revenue impacts. In the past management tended to relegate these issues to the “network issues” category, but most are discovering that they need to keep track of, account for and manage these exposures to the revenue stream in the same manner as the rest of the exposures we have been discussing.

Churn and Brand Equity Erosion

Equally interesting is the way that astute CFO’s are realizing that customer churn and the cannibalization of brand equity represents a major erosion to the revenue stream as well. These groups also include churn as a valid RA issue.

Fraud Management

It has long been understood that there is a large amount of overlap between the domain, tools and scope of the fraud management function and the revenue assurance function. GRAPA benchmarks show that the vast majority of telcos have been to include fraud as a integral component of the overall revenue assurance mission. Clearly, the vast majority of fraud cases represent significant and credible threats to the companies revenue streams and is appropriately included as a possible level of coverage.
 
The two dimensional definition of RA Scope

The definition of the scope of any revenue assurance activity, therefore, includes 2 dimensions. First, the declaration of a domain that is to be included, and secondly, the objective set for the assurance of that area.

For example, management may tell the RA team that they want them to take responsibility for the:

  • Churn (level of assurance) for Prepaid Voice Customers (horizontal domain).
  • Leakage (level of assurance) in the mediation system (vertical Domain)
    Or
  • Risk of loss (level of assurance) regarding the security of network elements (vertical domain)

This two dimension method of scope definition provides the RA professional with a clear, standardized method for the identification and standardization of tools, vocabulary and measures.