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Expert Opinion

Revenue Assurance can be defined as

structured approach to identify leakage

spots in the revenue chain, analyze and

ascertain the leakage cause, assessing the

leakage magnitude, and taking the suita-

ble measures to implement the effective

solution to plug the leakage points along

with preventative controls.

It has been found that revenue leaks oc-

cur across various points within the reve-

nue streams and these leaks are poten-

tially significant in size. Most analysts

agree that payment industry is leaking

billions of dollars in revenues.

Revenue Assurance practices initially

started in telecom and utilities sector;

where billing and pricing of individual

customer transactions started getting

importance. Emergence of innovative

business models and new payment meth-

ods along with complex pricing models

have made this practice very critical in the

payment industry as well. Interestingly, we, at

Infosys, see similar challenges between Tele-

com and the Payment industry which is re-

sulting into revenue leakage at similar points.

Exhibit 1: Industry Challenges and Leakage Points

Challenges Resulting into Revenue Leakage

Payment industry is very dynamic in nature

and it has seen various transformations in the

business models with innovative products

and service offerings to the consumers.

This business transformation along with vari-

ous other factors brings various challenges for

the revenue function resulting into leakage.

Few challenges are discussed below-

Federated Data Source

In the payment industry, the actual revenue

may be derived from individual transaction

level. On top of that, there may be various

business units, products and revenue lines.

In such scenarios, the data is likely to be

available across various federated sources

having inconsistent data quality. This will

pose challenges for determining the total

revenue at organization level which may

result into revenue leakage.

Complex Processes

Accelerated growth in data volume, real-

time services, and dynamically evolving

technologies, continuous demand for new

services, complex processes and business

systems infrastructure adds to the revenue

leakage.

Emergence of innovative business models and new payment methods along with complex pricing models is making payment business suscepti-

ble to the revenue leakage. Therefore, Revenue Assurance is going to be a very important aspect of successful players in the payment industry.

The ability of industry players to effectively implement revenue assurance function, leveraging best technology solutions, cross functional

skilled teams and well defined processes, is going to be a big differentiator for their business performance.

Rahul Kaushal

Senior Associate Consultant

Revenue Assurance -

Improving Bottom-line in the Payment Industry

Nikhil Jain

Senior Consultant

Sumeet Chauhan

Associate Consultant

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Expert Opinion Contd..

Outdated Tools

It is very critical for the finance organiza-

tion to perform revenue analysis. Howev-

er, quantity & width of data for perform-

ing data analysis is one of the biggest

challenges for them. Often, revenue anal-

ysis becomes time consuming in the ab-

sence of customizable, robust & efficient

tools. Therefore, this also results into

revenue leakage.

Manual Interventions

It has been observed that most of the

organizations depend on manual process-

es in the finance organization for the rev-

enue function. This may be due inability

of the technology function to provide in-

time and cost effective solutions related

to billing, revenue management and au-

tomated exception handling.

Billing Issues and Disputes

Billing is a very important area from reve-

nue perspective because this has very

high possibility of leakage. The revenue

leakage on billing front can be attributed

to gaps in the processing resulting into

inaccurate revenue, billing disputes im-

pacting the clash flows and write offs,

customer attrition due to bad experience

etc.

Roadmap to the Revenue Assurance

Revenue Assurance is a continuous en-

deavor aimed at improving operational

efficiencies and ensuring that all possible

revenues are collected without any leak-

age. Revenue assurance is all about end-

to-end analysis of revenue streams &

processes that goes beyond the tradition-

al approach. It identifies problems that

are generally not revealed by analyzing

any single area/department of revenue

generation in isolation. Instead, it in-

cludes balanced view of achieving multi-

ple short-term bottom-line impacts while

implementing long-term and fundamental

view.

Exhibit 2: Example of some revenue indicators

Revenue Assurance should be implemented

as a program for improvement of key perfor-

mance indicators (see exhibit 2), supported

by an automated software tools, well-

designed processes and relevant organiza-

tion. Therefore, we believe that it is impera-

tive for an organization to approach the reve-

nue assurance function taking into account

People, Process and Technology. We have

discussed this below:

People

Companies must take proper action to distrib-

ute responsibilities of revenue assurance

across the organization, also need to build an

organizational structure and reporting rela-

tionships that support objectives of revenue

assurance. An important part of this scenario

is to develop performance metrics that drive

behavior across departments, not only within

departments. In addition to above, revenue

assurance employees need to possess funda-

mental process management skills, ability to

monitor and measure processes over time,

accounting reconciliation skills.

Process

Organizations should have well defined pro-

cesses for the key revenue functions including

billing, pricing, accounting, new product

launch etc. Revenue assurance team should

have great part in development of any of

these functional areas and to decide how the

change (i.e. new services, products, billing

lines, pricing models) will impact the revenue

performance metrics. Revenue assurance

must observe and size key check points, apply

stringent rules to control important areas.

In a way, Revenue assurance can determine

and provide reporting, reviewing and Key

Performance Indicators (KPI’s) abilities.

Technology

It is very important for an organization to a

have the robust billing solution with reve-

nue assurance capability along with ad-

vanced business intelligence techniques

and tools. Having built-in balancing and

control triggers along with dashboard capa-

bility can immensely benefit the users.

Effective and sophisticated technology solu-

tions can help business to explore the un-

reached information territories. This will

not only plug the revenue leakage but also

open up new business opportunities.

Summary

Revenue Assurance is a continuously evolv-

ing area for the payment industry. Industry

will see more traction on revenue assur-

ance front with the evolution of innovative

payment models and methods when the

consumers are getting more demanding

and pricing strategies are getting to the

lower most relationship-transaction levels.

Therefore, it is imperative for the industry

players to get Revenue Assurance effective-

ly implemented within organization and use

it for exploring new opportunities.

Infosys Credentials

Infosys has successfully executed various

revenue transformation programs across

multiple industries including payments,

banking, telecom and utilities. Infosys fol-

lows Value Driven approach leveraging

Infosys proprietary framework (IMPACT)

and Value Realization Method (VRM) for

the large transformation programs which

has delivered measurable business value to

the clients. Infosys is selected as partner of

choice by client based on its proven capabil-

ity and track record in executing complex

and large revenue-billing transformation

programs leveraging world class consultants

with domain, product-package and tech-

nical expertise.