why should ra & fraud managers rethink the way they manage their business?

© 2013 – PROPRIETARY AND CONFIDENTIAL INFORMATION OF CVIDYA

Efrat Nissimov

Director of Product Management

Managing Revenue Risks

Why RA & Fraud Managers should rethink the way they manage their business

2

Can I find out which revenue streams are safe and which are at risk?

– Accurate forecast of leakage to be expected in the coming year

How do I set clear business goals across my organization?

– RA, Fraud, Internal Audit, etc.

How do I assist my managers?

– Balancing between emerging services / technologies and highly profitable services

CFO Challenges

3

Building a justifiable execution program

Effectively maintaining existing programs

Effectively communicating contribution to C-level managers

RA & Fraud Challenges

4

RA Challenge #1 – Building a Justifiable RA Program

RA organizations are swamped with requirements, and struggle to prioritize controls across their business. Priorities are often set based on “gut feeling”, rather than on an objective basis.

Telcos constantly expand their business (new technologies, services and business models), which requires creating new controls or modifying existing ones.

Is there a framework that enables creating a work plan that takes business goals, controls effectiveness, etc. into account while understanding the impact on the business?

Situation

Today

The Challenge

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RA Challenge #2 – Maintaining an effective RA Program

As time passes, newer controls become the focus, while the older ones gradually lose their effectiveness, and are sometimes simply ignored.

RA implements dozens of new controls every year.

How can RA decide if controls are effective? How can RA decide which controls are under-performing? How can RA determine which cases are worth investigating?

Situation

Today

The Challenge

6

RA Challenge #3 – Communicating Contribution to C Level

RA organizations report mainly on leakages, recovery levels, number

of deployed controls, figures, etc.

Mature RA organizations invest in preventive controls, which makes

showing contribution through detected leakages impossible.

Is there a way to report all RA contributions (found, recovered and

prevented leakage) to management? In $ value?

Situation

Today

The Challenge

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RA Activities Distribution

Source: TM Forum, Revenue Assurance Survey 2012

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Market Trends

Growing awareness of risk management among telecom organizations

– Volatile business environment requires structured management to address risks

– Organizations acknowledge the contribution that risk management can make to business performance

– Risk officers are more involved and have more influence on operations

– RA and Fraud practices have become compatible with risk management methodology

9

Market Trends

CFOs / corporate boards have to report on risk exposure and mitigation

– Compliance and accountability

– Current reports (loss and recovery figures) are retrospective and only partially describe what happened in the past, without offering any view for future

10

Market Trends

RA & Fraud departments are in transition towards proactive and business oriented approach

– Looking beyond loss detection

– Money ($) and not just controls

– Forecast & focus on future products and services

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Utilizing Risk to Improve Activities

Operations Oriented

Business Driven

Follow-up, Fix, Reclaim

Execute and Monitor

Define Operational Rules & KPIs

Report Exposure, Risk Level,

Recovery Forecast

Risk Guided Analysis

Risk Assessment per LOB/Process

Set Business Goals

Risk Mitigation Planning

Evaluate Rules Effectiveness

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Risk Framework is Supported by TM Forum

Business information

– Revenues, plans, goals, status, etc.

Risk & controls information

– Inventory of Risks

– Inventory of Controls

– Methodology

– Risk assessment

– Benefits measurements

– Existing controls, detected leakage

(*) Provided by TM Forum’s GB941

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Use of Best Practices

Use of RA Best Practices Documents by TM Forum Members 20 Respondents, 180 Indications less 38 N/A = 142

13% 19% 19% 19% 25% 27% 33%

44% 38% 44% 50% 38% 33%47%

63% 56%44% 44% 38% 31% 38% 40%

20%

6%6%

38%31%

(16) (16) (16) (16) (16) (15)(15)(16)(16)

0%

100%

GB941-B (RAMM) GB941 Guidebook TR131 GB941-E [1] GB941-D GB941-A (RASK) GB941-E [3] GB941-E [2] GB941-C RFX

Not familiar with it and not using it Familiar with it but not using it Familiar with it and using it

Source: TM Forum, Revenue Assurance Survey 2012

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Incorporating Risk Management methodology into RA & Fraud

Summary

Addresses major challenges in the CFO department

– Priorities, benchmarks, reporting

Encourages transition from Operations oriented to

Business driven decision making

Supported by TM Forum

Used in various extent by many operators globally

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