E5-E6 Project Kuber Enterprise Structure · PROJECT KUBER - REVENUE ASSURANCE PILOT • Objective...

E5-E6

Project Kuber Enterprise

Structure

PROJECT KUBER - REVENUE

ASSURANCE PILOT

• Objective of Project:

The overall objective of project Kuber is to ensure that the

revenue earned by BSNL is properly billed to customers and

collected from them. It is being executed in Pune Telecom

District. The focus specifically is on two areas:

1. Collection of bad debt, with focus on amount less than 2

years old.

2. Identification & Billing of leased Circuits that the currently

not getting billed.

PROJECT KUBER - REVENUE

ASSURANCE PILOT contd…

• Spectrum of people involved

- This project is being led by team consisting of Executive

Director (Finance) CGM, Maharashtra and PGM, Pune

Telecom Distt.

- From the Pune Telecom District, IFA is leading the

initiative on collection of bad debts. His team includes 3

CAO/AO and 5 Sr.TOA/TOA. General Manager

(Development) is leading the initiative on leased circuits

billing. His team includes 2 SDE/DE and 2 CO/AO

Key activities indentified & initiated

• Collection of Bad debt

• Segmentation of bad debt by age and account size. The following segment

are used:

• Age :90-180 Days, 180-360 Days, 360+ days

• Account Size: Low, Middle, Large, Very Large

• Appointment of Collection agencies for bad debt that are in the `middle’

bucket.

• Follow up by BSNL team on accounts that are in the `Large’ and `Very

large’ buckets

• Leased Circuits Billing: Process defined for identifying unbilled circuits

• Data collection underway from all the exchanges in Pune.

Project Kuber – National roll outCollections approach & pilot experience

ALTTC,GHAZIABAD

Collection strategy developed on the basis of

customer type & age of outstanding

Customer segment

Retail

(Small and medium

ticket size

accounts)

Enterprise

(Large ticket size

accounts)

Govt. & Defense

Typical Products

Basic Services,

CMTS post-paid

Basic Services,

CMTS post-paid,

Telephone & data

circuits

Basic Services,

Telephone & Data

circuits

Age of outstanding

• 3 - 6 months

• 6 - 12 months

• 12 – 24 or 36

month

• 3 – 36 months

• All outstanding

greater than 3

months

Collection methodology

• Outsource to collection agencies,

prioritizing on size

• Appoint different agencies based

on areas and age of outstanding

• In-house team for continuous

monitoring of performance

• Create in-house team for follow

up on accounts

• Prioritize follow up based on size

and age

• Weekly monitoring of progress

• Create in-house team for follow

up on accounts

• Weekly monitoring of progress

1

2

– Identify outstanding accounts for Basic, CMTS and Data Circuits, b/w 3 months and 3

years1 old

– Segment accounts on the following dimensions

• Age: 3-6 months, 6-12 months, 12-24 months, 24-36 months

• Size of outstanding: 0-1000 Rs, 1000 – 20000 Rs, >20000 Rs

• Geography: Areas within SSAs

• Customer type: Private, Govt. & Defense

– Account size should be determined after clubbing all outstanding bills for a particular

customer

– Age should correspond to the age of the latest outstanding bill

1

A

Small & Medium Ticket Size

A Identification of outstanding accounts and segmentation1

A

Selection of collection agencies and allocation of outstanding accounts (I)

– Identify collection agencies in the SSA that are either

• Debt Recovery Agents of other Telecom Service providers

– Debt Recovery Agents of reputed Public Sector Banks/ Financial Institutions

– Assess identified agencies on following parameters:

• Experience of working with other telecom operators

• Manpower

• Financial strength

• Ability to scale up manpower and infrastructure for BSNL requirements

• Geographic area where they have strong presence

• Interest in working with BSNL

– Based on this assessment finalize the set of 'Competent Agencies'

– Typically, there should be one agency identified for every 2000 outstanding accounts

1


B

Selection of collection agencies and allocation of

outstanding accounts (II)– Take the accounts that are between 0 and 20000 Rs., for private customers only

– Divide these accounts to form portfolios as follows:

• Divide the accounts into 3 buckets

– Bucket 1 (B1): 3 months – 6 months

– Bucket 2 (B2): 6 months – 12 months

– Bucket 3 (B3): 12 months - 24 or 36 months

• Choice of 24 or 36 months is left to the SSAs. It should be based on the no. of competent agencies available

– Divide the SSA into areas, on the basis of SDCA or smaller; Each SSA should be divided

into at least 3 areas; Divide the outstanding by Area within the SSA to get the following

portfolios (assuming there are 3 areas in the SSA – A1, A2, A3)

– Portfolio 1: B1, A1; Portfolio 2: B1, A2; Portfolio 3: B1, A3



• In case an SSA has 4 areas, then there will be 12 portfolios and so on

1


B

– Allocate portfolios to the 'Competent Agencies' based on area of operation, capacity etc.

– Each portfolio of outstanding should be allocated to a minimum of 2 and maximum of 3 agencies

– Also while allocating, it should be ensured that each agency gets at least one portfolio in each time bucket

– Invite competent agencies to bid for portfolios allocated to them

– Bids contain the commission percentage that the agency will charge on the collections done by them

– Each portfolio of accounts will have between 2 and 3 agencies bidding for them.

– Once the bids are opened, the following process should be carried out:

• For each portfolio of accounts, the agency with the lowest bid should be selected.

• If the agency with the lowest bid is unable to take on the contract, then the agency with the second lowest bid should be invited to take over the contract at the L1 rate; In case no agency agrees at L1 rate, then re-bidding should be done

– While finalizing the allocation the following points should be kept in mind

• No agency is allocated more than 2000 accounts for the whole SSA.• No agency gets consecutive time buckets• Any deviation from these rules should be made only if no competent

agencies can be identified.– The entire exercise of identifying and appointing agencies should be completed in 20 days


outstanding accounts (III)


Selection of collection agencies and allocation

of outstanding accounts (IV)

– Every month, there will be new outstanding cases generated that exceed more that 3

months in age

– Such cases should also be passed onto agencies that have been allocated

the 3-6 month bucket

– Therefore, agencies working on the B1 bucket (3-6 months) will get more

accounts added on every month

– This should be done for 3 months at a stretch; During this time the number of accounts

in Bucket 1 will keep on increasing

– After 3 months, the accounts should be shifted to the next bucket

– Accounts will be moved from 3-6 months bucket to 6-12 months bucket at the

end of every quarter; Similarly they will mover from 6-12 month bucket to the

next bucket

1


B


outstanding accounts (V)

– Additional incentives can be provided for achieving specific targets as follows:

– The collection should be done in a period of 1 month from date of receiving list to be eligible for incentive

• This additional incentive shall apply to the entire amount collected by the agency

• This scheme is to be measured on a monthly basis, taking into account the starting portfolio and the amount

collected in that month.

1


B

Collection Slab (as % of

portfolio allocated)Additional incentives

Upto 20%-

20.01% to 30% 3%

30.01% to 40% 5%

Above 40% 7%

Creation of internal teams and systems

– Dedicated team of people required to support, manage and drive the external

agencies

– Collection agencies to provide daily reports (hard and soft copy) on the collections

done by them

– Format for providing daily report included in the templates

– BSNL to provide collection agencies information on accounts that have been paid up

– Information should be provided on daily basis

– Query handlers to have access to terminals to answer questions from field agents in

real time

– Mechanisms in place to ensure that agencies follow proper code of conduct

1


C

Internal team created for managing and driving

collection agencies

• Manage overall collection program

• Sort out issues around policy/

appointment etc.

• Manage overall database

• Collect and consolidate daily reports

• Agency Manager

– Drive collection agencies towards

targets

– Undertake field visits

• Query handler

– Answer queries in real time

• Drive and manage field staff

• Manage tele-calling team

• Field visits and tele-calling activities

Roles

BSNL

Collection Agency

IFA of Pune SSA

Agency Manager (1)Query handlers

(1 per area)

Team Leader Team Leader

Field Staff Tele-calling team

Database manager

1


C

Pilot Experience

Mechanisms put in place to ensure that agencies follow

proper code of conduct in dealing with customers

– Code of conduct created for the collection agencies in line with TRAI guidelines

– Sample audit should be carried out on the customers contacted by the agencies

– Ensure that the collection agencies are operating as per code of conduct

– Helpline to be created for customers to contact BSNL in case of any complaint

– Also list of collection agencies put up on the BSNL website

– Any serious complaint against the agency that is substantiated should lead to

– Immediate cancellation of the contract

– Forfeiture of the security deposit of Rs. 20000

– Blacklisting of agency for any future contract with BSNL

– The agency and the agents should be issues with authorization letter and ID card from BSNL

– Collection agencies can collect payments only through cheques

– Agents to give BSNL receipts to customers on collection of payments

1

2

3

4

1


C

5

6

Monitoring and review

– Weekly review to be conducted with the collection agencies

– Track %age of amount collected (from the total account passed onto them)

– The amount collected should include the following

– Cheque payment collected by agencies

– Payments made by customers directly at counters

– Non performing agencies should be given a warning

– Continuous non performance should result in removal of the agency

– A new agency should be appointed for the accounts that were held by the agency

that was removed

– The agencies should provide detailed feedback on the status of the accounts

passed onto them

1


D

Detailed feedback provided by agencies on all accounts

Plan developed for recovery based on feedback from

agencies

Feedback from agencies %age by Value Plan for recovery

Customer shifted 40% Random audit to verify

Dispute 5%

Prioritize on size and settle

disputes

Not Ready to Pay 8%

Prioritize on size and issue legal

notices

Follow Up required 20%

Follow up once, issue legal

notice after that

Promise to Pay 15% Follow up regularly

Amount already collected 7% -NA-

Customers to be contacted 5% Contact customer

Total 100%

1


D

Pilot Experience

Process for Large Size outstanding and Govt. &

Defense outstanding accounts

– The following accounts should be handled by BSNL internally:

– Private accounts greater than Rs. 20000 in size, between 3 months and 3 years old

– Government and Defense accounts, of all sizes and age

– The accounts should be divided by the area within the SSA

– One CAO/AO per area should be appointed to follow up and collect these accounts

– The CAO/AO shall report to the SSA IFA on a weekly basis

– Report progress

– Escalate any issues

– Disputed accounts should be proactively settled as per the normal guidelines

2

3

Large Ticket Size, Govt. & Defense

Outstanding accounts were prioritized and approach

defined

242

794

189

1,225

0

200

400

600

800

1,000

1,200

1,400

Small

<1,000

Medium

1,000-20,000

Large

>20,000

Total

•

Outstanding (Rs. lac)

55,010 28,943 401 84,354No. of

account

s

Manage internallyOutsource to

collection

agencies

To be addressed

later

Ticket Size (Rs.)

Fixed line outstanding in Pune (Jan '07 to Dec '08); Excludes govt. &

defense

Note: Does not include government and defense outstandingSource: BSNL internal Data; BCG Analysis

Approach

Pilot Experience

Demarcations and

approach may vary for

some SSAs

2

3

Large Ticket Size

Constitution of the team required at the SSA

level for collection of all outstanding

S.No. Position

Required

Designation

# of people

required

Full Time / Part

Time Role

1 Agency Manager

DGM / CAO as per

availability 1 per SSA Full Time

Manage all private recovery agencies

Conduct weekly reviews

Drive agencies towards targets Collect

and consolidate daily reports from

agencies

2

Database Manager

(to deal with billing

packages) CAO / AO 1 per SSA Full Time

Manage database of outstanding

accounts

3 Query Handlers SS/TOA 1 per Area Full Time

Answer queries raised by agencies in

real time

4

Enterprise / Govt.

accounts manager CAO/AO 1 per Area Part Time

Follow up on large value and

govt./defense accounts

Repot weekly to IFA on progress

1

All team members to report to SSA IFA

2

3

Team structure for national roll out of collections initiative of

Project Kuber

Corporate Office Circle Office SSA

Project Sponsor

(Collection)

• ED Finance

Project Champion

(Collections)

• GM (Finance), CFA

Project Manager -

Collections

• DGM / CAO

Collections Team

• 3 JAOs

Project Champion

• CGM Circle

Circle Head - Collections

• GM (Finance)

Project Manager Circle -

Collections

• DGM

Collections Team

• 1-2 AO/JAO

SSA Head

• PGM / GM

Project Manager SSA -

Collections

• IFA

Collections Team

• 6-7 people

Project Manager to manage

complete PMO for the initiative

PM (Circle) to manage exercise

for the SSAs in their circles

PM (SSA) to drive initiative at

the ground level

(4-5 people) (~75 people) (~2000 people)

E5-E6 Project Kuber Enterprise Structure · PROJECT KUBER - REVENUE ASSURANCE PILOT • Objective...

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