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Understanding how toMinimise and PreventPrepay Revenue LeakageSteve Harris and Eric PriezkalnsT-Mobile [email protected]@t-mobile.co.uk
“there is no falsification before the emergence of a better theory“
Imre Lakatos
!! §2!
Prepay Revenue LeakageContents
minimising revenue leakage the importance of speed: how delays in
processing cause revenue loss
how to do revenue assurance in real time looking for errors after they occur: potential
benefits and practical limitations reconciling prepay and postpay meter
output to gain confidence over both automated re-rating
prevention is better than cure: pre-launch analysis fault-conscious design
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The Importance of SpeedThree Risk Models Related to Delay
Delay is the principal cause of revenue loss for
prepay services delay in updating the customer’s balance
for perfectly executed transactions delay in updating the customer’s balance
for services recorded at the time of sale
but where balance update was abnormally
delayed delay in recovery following outage
!! §4!
The Importance of SpeedDelay in Perfect Execution: The Wedge Model
Even with perfect execution of transactions, the
time it takes to update balances represents a risk
that can be mathematically quantified
loss
time
!! §5!
The Importance of SpeedDelay in Perfect Execution: The Wedge Model
We can calculate expected revenue loss based on a simple linear relationship defined by the
following parameters time to update balance likelihood of a chargeable event in that time possibility of performing more than one event simultaneously expected cost of an event and expected customer balance
loss
time
!! §6!
The Importance of SpeedDelay in Perfect Execution: The Wedge Model
The wedge model offers a simple calculation to weigh the cost of delay against the capex cost of
comparative real-time, hot, warm etc solutions for prepay charging so why is it not more common?
One flaw of the wedge calculation is that it assumes linear relationship in likelihood of customers calling at
any point in time behavioural analysis of data suggests customers tend to be more likely to make calls in rapid succession if customers know about a flaw in charging, they exploit it
loss
time
!! §7!
The Importance of SpeedAbnormal Delay in Updating a Customer’s Balance
How long is too long a delay after the event takes
place? commercial/credit risk
customer may no longer have a balance
with you by the time you are ready to
debit their account customer relations
customer may be upset if charged a
long time after they made the call there is a cost in handling complaints,
and you may need to reimburse them
again
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The Importance of SpeedAbnormal Delay in Updating a Customer’s Balance
How long is too long a delay after the event takes
place? the UK regulator has technical advice:
“Where charging errors affecting Pre-Pay customers
are:
a. Identified;
b. Correction are applied within 30 days; and
c. The customer’s credit has not expired in the
meantime
Then such errors can be excluded…” in other words, the UK regulator deems it
acceptable to charge prepay customers up to
30 days after the fact
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The Importance of SpeedAbnormal Delay in Updating a Customer’s Balance
Happily, T-Mobile UK lacks the data to analyse
recovery rates when prepay customers get
charged after the fact! We can assume that even if the operator
decides to post a retrospective charge to the
customer’s balance, the loss grows
exponentially because of the increased
likelihood of churn, customer complaint etcloss
time
!! §10!
The Importance of SpeedDelay in Recovery Following Outage
The worst possible problem is the loss of revenue
because of system outage or system capacity is reached
If the operator is still able to cache records of events,
then the operator can still attempt to charge after the fact,
but see above – time is essential
If the operator is not able to do this, the choice
becomes very stark deny service to customers or permit free use of services during the outage
!! §11!
The Importance of SpeedDelay in Recovery Following Outage
The worst possible problem is the loss of revenue because of system outage or system capacity is reached
If the operator is still able to cache records of events, then the operator can still attempt to charge after the fact, but see above – time is essential
If the operator is not able to do this, the choice becomes very
stark deny service to customers
of course, very unpopular with customers permit free use of services during the outage
more popular but…
!! §12!
The Importance of SpeedDelay in Recovery Following Outage
If free use occurs, demand tends to severely peak
during that period, e.g.
usage
time
freeperiod
!! §13!
The Importance of SpeedDelay in Recovery Following Outage
It is impossible to quantify the total impact in
these cases do people make calls during the free period that
they would otherwise have paid for? or do they mostly make extra calls? what is the knock-on impact for other
customers? load issues might prevent postpay
customers from making revenue-earning
calls
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Revenue Assurance in Real TimeLooking for Errors After they Occur
Error
time
Proactive
Error centric
Reactive
!! §15!
Revenue Assurance in Real TimeLooking for Errors After they Occur
Error
time
Alarm
Proactive
Alarm centric
Reactive
!! §16!
Revenue Assurance in Real TimeLooking for Errors After they Occur
Error
time
Alarm
Proactive
Active Model
ReactiveActive
!! §17!
Revenue Assurance in Real TimeFeedback loops
Error
time
Alarm
Proactive ReactiveActive
Feedback Loop
!! §18!
Revenue Assurance in Real TimeFeedback loops
Error
time
Alarm
Proactive ReactiveActive
Feedback Loop
!! §19!
Revenue Assurance in Real TimeFeedback loops
Error
time
Alarm
Proactive ReactiveActive
Feedback Loop
!! §20!
Revenue Assurance in Real TimeReactive and Active tools
Tapping into customer Feedback, the ultimate
feedback loop Usually readily available No special tools needed Independent Final chance to get it right Poor image, damage is done Lack of detail available Often long delay Tendency for bias in customer favour
!! §21!
Revenue Assurance in Real TimeReactive and Active tools
Test Call Generators, bringing the feedback point
closer As simple or a complex as required Independent Pinpoint error by capturing the detail
Is this just another form of internal customer
feedback? Faster feedback reducing loss Value can be multiplied when part of a suite of
tools
!! §22!
Revenue Assurance in Real TimeReactive and Active tools
End to End ReconciliationsGeneration of chargeable event Actual
charging of customer
Highlights errors in provisioning Verifies the appropriate creation of charging records Verifies charging records pass successfully through
billing chain
Can be taken further through to accounting for the
revenue in the appropriate ledgers
!! §23!
Revenue Assurance in Real TimeReactive and Active tools
Automated re-rating
Verification of the charging applied using charging
records
Highlights errors due to Incorrect rating setup Incorrect application of business logic
Verification of the charging applied using record from
test call generator
Highlights errors due to Inaccurate recording of events
!! §24!
Prepay Revenue LeakagePrevention is Better than Cure
Faster, active monitoring can help reduce the
scale of problems but how does an operator become proactive,
and prevent problems before they occur? and how do you put a value to the benefit this
brings, to justify the extra cost?
The solutions fall into two broad categories detailed pre-launch analysis and testing a general shift towards fault-conscious design
!! §25!
Prepay Revenue LeakageDetailed Preventative Analysis
Experienced revenue assurance personnel can help spot
potential weaknesses before something goes wrong You need someone on any project team to do the maths
and calculate the impact of loss Even if the best decision is to go ahead and launch
anyway, then someone needs to monitor the situation
and report back to management on the real-life impact of
the predicted errors Trying to predict likely causes of errors also helps to
ensure adequate monitoring is in place from day one The cost of fixing fundamentally poor choices of design is
likely to be higher than the cost of getting it right first
time
!! §26!
Prepay Revenue LeakageFault-Conscious Design
Designs can reduce the impact and seriousness
of faults and errors in many different ways Fail-over and caching systems will pay for
themselves through preventing loss of revenue Avoiding unnecessary complication or
proliferation of tariff data structures makes
mistakes less likely and quicker and easier to
spot when they do occur A change of culture is often the biggest step
towards avoiding causes of leakage
