Kpmg global revenue-assurance-survey-march2012

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Kpmg global revenue-assurance-survey-march2012

  1. 1. TELECOMMUNICATIONS Entering a new eraAre new value propositions opening up for Revenue Assurance functions? kpmg.com KPMG INTERNATIONAL
  2. 2. Contents 03 08 05 16© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  3. 3. 28 41 Foreword 03 Executive summary 05 The continuing battle against revenue leakage 0834 42 Revenue Assurance’s evolving role in the organization 16 Sharpening operations 28 The power of people 34 Conclusion and key takeaways 41 About the survey 42© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  4. 4. E ntering a n ew e ra m-commerce is the trend that will have the greatest impact on the industry. Sean Collins Global Chair Telecommunications & Media2© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  5. 5. E n t e r i n g a n ew e r aForeword Rapid and far-reaching changes in the telecommunications landscape are increasing the risk of revenue leakage. Today’s operators have to cope with complex network systems, converged service offerings, multiple third party partners and a rise in outsourcing, all of which creates the potential for inaccurate data capture and billing, and increased fraud. In addition to these challenges, all operators are facing margin pressure, particularly with increasingly savvy customers, emerging data products, and the need to continually invest in network infrastructure to keep up with demand. Against this backdrop, intense pressure is on Revenue Assurance (RA) functions to identify and address revenue leakage and deal with the increased risk of fraud. ‘Leakage’ in this report refers to actual revenue leakage as well as revenue exposure – the identification of potential revenue leakage before the event has occurred. KPMG’s global study of revenue assurance and fraud management functions identifies the continued challenges faced by telecommunications companies today, and offers some guidance on how to reduce revenue leakage and optimize margins. In this, the second KPMG Global Revenue Assurance Survey, we spoke to executives responsible for RA from 137 telecommunications companies around the world. The results make compelling reading and show a number of interesting changes since the previous survey in 2009. We would like to thank all those who gave their valuable time to participate in the survey. Sean Collins Romal Shetty Global Chair Head of Telecommunications Telecommunications & Media KPMG in India 3© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  6. 6. E ntering a n ew e ra4© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  7. 7. E n t e r i n g a n ew e r aExecutive summaryThe impact of market forces on telecommunications companiesA number of forces are at work in the telecommunications industry that are increasingthe potential for revenue leakage, and the survey responses show how operators aretransforming their businesses in response. Business transformation through increasing complexity With convergence comes complexity • Eighty-five percent of respondents provide converged services. • Growth in business process outsourcing, value-added services and tariff plans. • m-commerce is the single most transformative issue. Functional transformation as Revenue Assurance’s role evolves RA function still lacking influence • Only 21 percent report directly to the Board. • Only 25 percent of CFOs see a need for a chief RA officer. • But… some positive signs of growing authority, with 85 percent of RA functions formally involved in signing off on new projects. RA structure changing… but slowly • Only 24 percent of RA departments are fully centralized. • Forty-two percent of RA functions are cross-functional with a balanced representation. • Forty percent say they would never outsource RA. Revenue leakage a continuing threat Much work to be done to plug revenue leakage • hirty-six percent of respondents say their company leakage more than 1 percent of total revenue. T • Forty-one percent of RA functions fail to identify more than half of total leakage. • ew transformational projects (new technology, network, billing system migration, for example), N poor system integration and fraud are the top three sources of revenue leakage. • Newer revenue streams such as data/broadband, interconnect and value-added services are more vulnerable.  Operational transformation to build better practice Strong signs of greater efficiency • Fifty-six percent of respondents say their RA function is self-funding. • ast majority have strong standard operating procedures for data sources and execution V processes for RA activities. • Seventy-eight percent use some kind of RA/fraud management tool. • But… 52 percent say their senior management is not rewarded against RA performance, which could weaken the focus on prevention and identification of leakage and fraud. Talent is high on the agenda • RA functions have a good mix of technical and business competence. • Sixty-five percent expect to grow through internal development of people. 5© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  8. 8. E ntering a n ew e ra As they strive to identify and reduce revenue leakage and fraud, RA functions are looking to become more influential at the highest levels and sharpen their operations to become more efficient in an increasingly complex industry. Established trends Emerging trends • Outsourcing of core operations like Network and IT. • Likely increase in leakage owing to transformations like • High number of Value Added Services (VAS) parties m-commerce, Next Generation Networks and converged deployed. services. • High number of tariff plans on a monthly basis. • Primary focus on revenue leakage identification only. • Visibility to Audit Committee and Board of Directors. • Need for cross-functional establishment. • Creation of CXO position for RA. • Increased focus on product and network assurance. • Partial outsourcing of RA function. • Centralized RA functions. • Detailed process documentation around RA checks. • Performance incentives linked to RA savings for RA and • Focus on development of analytical and technical skills. business functions. • Existence of RA tool deployment. • Dedicated Fraud functions with increased visibility and • Low recovery rates for identified leakage. empowerment. • Establishment of fraud risk management framework. Convergence continues to be largely responsible for this increased complexity, with the vast majority (85 percent) of respondents providing converged services to their customers. However, when asked which changes would have the greatest impact on the industry, the number one response was m-commerce. This reflects the growth of mobile banking and payments, which is creating new, independent revenue streams with accompanying billing and security issues. Factors most likely to transform the telecommunications industry M-Commerce/banking/payments 74% Converged services 71% Next Generation Networks 65% Long-Term Evolution (LTE) standard 48% Mobile number portability 36% Mobile virtual network operator 32% Preferred carrier based 24% on subscriber choice Mobile advertising 16% Others (please specify) 12% 0 10 20 30 40 50 60 70 80 N= 114 respondents Respondents could select more than one response option. Source: KPMG Global Revenue Assurance Survey, 20126© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  9. 9. E n t e r i n g a n ew e r aThe telecommunications executives that took part in the survey are well aware ofthe consequences of such major transformations. An overwhelming proportion (94 percent) believe the threat of revenue leakage and fraud will go up, and half think this rise will be significant. Impact of transformations upon the telecommunications industry 2% 4% 49% 45% N = 85 respondents Decrease in revenue leakage and threat of fraud No increase in revenue leakage and threat of fraud Partial increase in revenue leakage and threat of fraud Significant increase in revenue leakage and threat of fraud Source: KPMG Global Revenue Assurance Survey, 2012 The speed of change in the sector is breathtakingand putting an incredible amount of pressure on ourRevenue Assurance people. We have to adapt quicklyand decisively or else risk even greater leakage.Gabriela Sobral GilRevenue Assurance HeadTelefónica Latinoamérica 7© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  10. 10. E ntering a n ew e ra The continuing battle against Despite their best efforts at prevention, more than a third of respondents are leaking in excess of 1 percent of total revenue. And the RA function has enjoyed mixed fortunes, with 41 percent failing to identify more than half of total leakage. Compared to the previous 2009 KPMG Global Revenue Assurance Survey, the proportion claiming leakage more than 1 percent has fallen considerably from 54 to 36 percent, although there is still clearly much room for improvement. The only regions to report worse figures than 2009 are Europe and the Americas, where the percentage claiming leakage over 1 percent of revenue has more than doubled. A significant shift to prepaid in these markets, along with an explosion in data usage via smartphones, has made providers in these regions more susceptible to losing revenue. More worryingly, a fifth of this year’s respondents admit to leaking up to 10 percent of annual revenue, and 15 percent report leakage of more than 10 percent. Asia Pacific appears to be the best performing region. Given the scale of these losses, it’s understandable that respondents consider the number one objective for RA functions to be the prevention, detection and recovery of revenue leakage. Other activities such as fraud prevention, revenue management and cost saving are given a far lower priority. A fifth of respondents are leaking up to 10 percent of total revenue8© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  11. 11. E n t e r i n g a n ew e r arevenue leakageLeakage as a percentage of revenue Up to 1% of revenue Between 1-10% of revenue Greater than 10% of revenue 10% 18% 15% 15% 19% 50% 32% 75% 66% Africa & Middle East Asia Pacific Europe & AmericasFigures might not add up to 100% due to rounding.Source: KPMG Global Revenue Assurance Survey, 2012 N = 101 respondents 9© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  12. 12. E ntering a n ew e ra Main objective of RA functions Respondents were asked to rank each objective in order of importance, with 1 being the most important. 80%80%70%60%50% 44%40% 31% 31% 30% 27% 26%30% 24%20%10%0% Prevent, detect and Assist in fraud Lead overall revenue Focus on revenue Enhance customer Train business Implementation Proactive identification recover revenue prevention management enhancement experience through personnel of new of new technologies leakage program across and cost saving product and about RA controls technologies/ and corresponding organization opportunities network assurance within daily transformational cost benefit analysis operations projects for the business N = 89 respondents Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7 Rank 8Figures might not add up to 100% due to rounding.Source: KPMG Global Revenue Assurance Survey, 2012. Variable performance of RA functions Not all RA teams are successfully spotting revenue leakage. Forty-one percent41 percent of the of the companies in the survey say they fail to identify more than half of totalcompanies in the survey leakage, although these figures differ widely from region-to-region. Relatively few RA functions have cross-functional teams that include the breadth of skillsfail to identify more than to identify every type of leak – especially those that happen at pre-billing levelhalf of total leakage. at the switches. Consequently, a fair proportion are found by other parts of the organization.Telecommunications providers in Europe and the Americas have by far the best track record, while those from Asia Pacific are the least impressive, with more than a quarter (26 percent) identifying less than 10 percent of all leakage. Operators in countries such as India tend to have less sophisticated systems yet must deal with enormous volumes of data records, so fail to detect patterns of revenue loss. KPMG VIEWPOINT Visible improvement As recently as three years ago, a number of operators didn’t even have dedicated RA teams, instead delegating responsibility to Internal Audit or other departments. The reduction in leakage relative to the 2009 survey is a sign of the growth of RA as a dedicated function, along with greater adoption of processes and tools (even if the latter hasn’t always run smoothly). Many operators in the Middle East and Africa are starting to take RA more seriously as they seek to address serious leakage. Ron Stuart Head of Telecommunications & Media KPMG in South Africa10© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  13. 13. E n t e r i n g a n ew e r a Percentage of leakage identified by the RA function Up to 10% of leakage 10–25% of leakage 25–50% of leakage Greater than 50% of leakage 5% 8% 16% 9% 14% 21% 26% 11% 19% 17% 11% 13% 54% 47% 70% 60% Africa & Middle East Asia Pacific Europe & Americas GlobalFigures might not add up to 100% due to rounding. N = 80 respondentsSource: KPMG Global Revenue Assurance Survey, 2012Recovering revenue continues to be a challenge, with just 40 percent ofrespondents managing to retrieve more than half of all losses from subscribersand partners. Companies from Europe and the Americas have the highest recoveryrates, while those from Africa and the Middle East are the least effective, with fourout of ten (39 percent) recovering less than 10 percent of their reported leakage. 11© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  14. 14. E ntering a n ew e ra Proportion of leaked revenue recovered from subscribers and partners60 55%50 47% 39% 39% 40%4030 27% 26% 23% 20% 21%20 17% 11% 11% 11%10 7% 7% 0 Africa & Middle East Asia Pacific Europe & Americas Global N = 62 respondents Up to 10% of revenue 10–25% of revenue 25–50% of revenue Greater than 50% of revenueFigures might not add up to 100% due to rounding.Source: KPMG Global Revenue Assurance Survey, 2012 Europe and the Americas lead the way in terms of revenue recovery, with more than half the leakage recovered from customers or partners (partners refers to interconnect, roaming and VAS partners across business operations). Africa and the Middle East recovers 11 percent of leakage, predominantly due to service contracts being prepaid in nature. The respondents feel there are a number of reasons why they are not getting the most out of their RA functions, with ‘inconsistency of data across different systems’ top of the list, as the chart opposite shows. This could be influenced by the fact that many RA functions are not centralized, which limits the coordination with internal IT departments. And according to the survey participants, RA departments are also hindered by a lack of appropriate skill sets – which reflects recruitment, training and retention strategies. Some say they don’t have sufficient automated tools to support the processes; although the industry has invested heavily in tools, not all have brought the level of automation anticipated.12© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  15. 15. E n t e r i n g a n ew e r a Reasons why organizations do not make the most of their RA functions Respondents were asked to rank each reason, on a scale of 1–10, with 10 being the highest Lack of data consistency across different systems 6.3 Non availability of requisite skill sets 6.1 Absence of automated tools to support the processes 6.0 Non-availability of accurate and timely 6.0 information from business Inconsistent procedures and policies across organizations 5.6 Lack of authorization of RA function within the organization 5.3 Weak alignment between functional and overall 5.2 organizational objectives Lack of RA and fraud awareness within the organization 5.0 High cost of operations 4.8 Lack of defined scope for the function 4.7 0 1 2 3 4 5 6 7 8 N = 89 respondents Source: KPMG Global Revenue Assurance Survey, 2012 KPMG VIEWPOINT Coping with integration Systems integration is a major challenge for the sector, with many companies having built up a range of systems for billing, mediation and interconnect, which often don’t talk to each other very well. In addition to these challenges, vendors are constantly releasing new applications for value-added services, while different mobile Switching Center manufacturers use different data formats. In order to bring greater data consistency, providers are attempting to consolidate all their IT into one fully-integrated platform, which entails a huge cost and risk. Romal Shetty Head of Telecommunications & Media KPMG in India 13© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  16. 16. E ntering a n ew e ra Change is the weak spot Executives involved in the 2012 survey feel that new transformational projects (such as new technology, network and billing system migration), make their organizations highly vulnerable to revenue leakage and fraud. They are also concerned with poor billing system integration, as well as internal and external fraud. However, on a positive note, three-quarters (74 percent) of respondents say they are satisfied with their RA function’s ability to cope with transformation. Aspects of the business most vulnerable to revenue leakage/fraud Respondents were asked to rank the vulnerability of each business aspect, on a scale of 1–10, with 10 being the highest New transformational projects 6.5 Poor system integration from 6.4 MSC-IN-Mediation-Billing systems Frauds (internal or external) 6.3 Interconnect and roaming billing 6.2 New product development and tariff configuration 6.0 CDR generation issues at MSCs/incorrect usage data 5.6 Intelligent network charging failures 5.6 VAS partner payments 5.3 Retail billing systems errors 5.3 Complex tier-based pricing 5.2 Sales commissions 5.1 0 1 2 3 4 5 6 7 8 N = 44 respondents Source: KPMG Global Revenue Assurance Survey, 2012 Prepaid, roaming and post-paid are the three revenue streams most susceptible to leakage or fraud, which is not surprising as these currently generate the greatest volume of payments. However, alternatives such as data and broadband, interconnect and value-added services are not far behind, and may take on more importance as mobile data usage increases over time – particularly with the emergence of m-commerce. A quarter of all respondents now have 50 or more third party partners providing value-added services, so this area of the business is also likely to become more significant for RA functions. Responses differ by region, with value-added services considered a highly vulnerable stream by Asia Pacific providers, and data and broadband a bigger worry in Europe and the Americas.14© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  17. 17. E n t e r i n g a n ew e r a Revenue stream most susceptible to revenue leakage/fraud Respondents were asked to rank the susceptibility of each revenue stream, on a scale of 1–10, with 1 being the highest 2.2 4.0 4.5Africa & Middle East 2.8 5.2 4.8 5.9 5.9 4.5 4.8 5.3 Asia Pacific 3.4 3.4 4.0 5.9 4.9 4.0 3.4 4.0 4.2 Europe & Americas 4.5 3.7 5.6 6.7 3.6 3.8 4.4 Global 3.7 4.5 4.0 5.7 6.1 0 1 2 3 4 5 6 7 8 9 10 N = 46 respondents Prepaid Post-paid Interconnect Roaming VAS Data and broadband Fixed line Carrier* Source: KPMG Global Revenue Assurance Survey, 2012. *Carrier refers to wholesale telecom providers responsible for carrying voice and data networks across different service providers. 15© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  18. 18. E ntering a n ew e ra Revenue Assurance’s evolving RA has yet to achieve influence at the very highest level; only one in five (21 percent) of respondents say their RA function reports directly to the Board of Directors. And just 24 percent of RA departments hold fully centralized control over their organizations, which could hinder the spread of consistent RA practices. For most of the telecommunications providers taking part in the survey, RA reports to either the CFO (46 percent) or the dedicated Head of RA, who in turn reports to the CFO (45 percent). Respondents from Africa and the Middle East are more likely to have a direct line to Finance, with the CFO playing a dual role encompassing RA. However, just 21 percent of RA functions report directly to the Board and only 11 percent to the Audit Committee. These figures have nonetheless improved since the previous survey, and with virtually all respondents claiming to have an independent RA department, RA is slowly gaining in importance. Just 21 percent of respondents say their RA function reports directly to the Board of Directors16© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  19. 19. E n t e r i n g a n ew e r arole in the organization Who does the RA team report to? 6% 6% 6% 3% 53% 38% 35% 6% 47% 40% 4% 56% Africa & Middle East Asia Pacific Europe & Americas Other senior CFO & management Head of Dedicated Dedicated members Internal Audit RA Head CTO RA head CFO 4% 3% 45% 1% 1% 46% Global Figures might not add up to 100% due to rounding. N = 78 respondents Source: KPMG Global Revenue Assurance Survey, 2012 17 © 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  20. 20. E ntering a n ew e ra Who does the RA team report to? Audit Board of Neither Committee Directors Africa & Middle East 29% 21% 50% Asia Pacific 6% 12% 82% Europe & Americas 0% 28% 72% RA teams reporting to the Audit Committee and/or Board of Directors 2009 2011 Africa & Middle East 30% 50% Asia Pacific 6% 18% Europe & Americas 15% 28% N = 78 respondents In Africa and the Middle East, RA appears to hold greater status, with half of the respondents saying their RA function has a straight line to either the Board or the Audit Committee. These two regions suffer particularly with leakage, so loss of revenue becomes a big issue for the Board, who take a greater interest and want to deal more directly with the senior RA managers. A number of respondents are concerned that RA’s lack of seniority inhibits its effectiveness. Fifty-four percent are not fully satisfied with the existing communication with senior management, while a lack of career opportunities is considered one of the main reasons for staff attrition. But is RA likely to step up and gain Board-level recognition? It depends upon who you ask. Of the RA Heads taking part in the survey, 57 percent feel that a Chief Revenue Assurance Officer would benefit their company, whereas only 25 percent of CFOs see a need for such a role.18© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  21. 21. E n t e r i n g a n ew e r a Should your organization have a Chief RA Officer? Global CXO Group responses RA Head responses52% Yes 25% Yes 57% Yes48% No 75% No 43% No N = 90 respondentsSource: KPMG Global Revenue Assurance Survey, 2012 KPMG VIEWPOINT Moving up? RA/Fraud Management has evolved considerably over the last few years from its earlier role as an ‘assistant’ to the wider Finance team. Although there is some way to go before it’s considered a true business advisor, a growing number of companies are involving RA in product, system and network planning in a bid to proactively prevent leakage and fraud. Currently, most RA teams ultimately report to the CFO, who is a powerful sponsor able to ensure action is taken. However, given the volume of fraud and revenue leakage across the industry, the function needs to exert greater influence at the very top of organizations – but if Board-level ‘impact’ is to become a reality, organizations will have to carefully consider the RA function’s independence. Joe Gallagher Head of Telecommunications and Media   Europe, Middle East & Africa 19© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  22. 22. E ntering a n ew e ra Creating an effective RA structure It’s not just the status of RA that can impact its effectiveness; organizational structure is an important factor in achieving consistent practices and enabling information to flow freely. Only a quarter (24 percent) of respondents claim to have a centralized RA function with representatives within each business/operating unit. Given that a majority also feel it’s a challenge to get hold of accurate information from the business, a lack of centralization could restrict the ability to prevent and identify leakage. RA representation in each business/operating unit can also be beneficial, as it gives a single point-of-contact for all leakage and fraud issues and also facilitates efficient implementation of RA activities. From a regional perspective, respondents from Europe and the Americas appear to have the most sophisticated, centralized organizational structures, while businesses in Asia Pacific are far more likely to be decentralized. Interestingly, those regions with greater centralization also have a better record at identifying revenue leakage. In keeping with the previous 2009 survey, the vast majority (95 percent) do not plan to move toward an outsourcing model in the next few years. Structure of RA 16% Centralized with a representative 12% at each operating Unit/Circle 36% 24% 52% Centralized with complete 47% execution at corporate level only 56% 53% 12% Completely de-centralized RA/FM with 35% teams at all operating Units/Circles 6% 14% 16% 6% Co-sourcing model for RA/FM 3% 8% 4% Plan to move towards an outsourcing 0% model in the next few years 0% 1% 0 10 20 30 40 50 60 N = 78 respondents Africa & Middle East Europe & Americas Asia Pacific Global Figures might not add up to 100% due to rounding. Source: KPMG Global Revenue Assurance Survey, 2012.20© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  23. 23. E n t e r i n g a n ew e r a KPMG VIEWPOINT Bringing your best people together Accepting that some small companies with a limited number of operations may actually benefit from a more decentralized approach, there is a strong case for centralizing teams and bringing your best people together. In dispersed RA functions, much of the know-how exists within individuals. A centralized team leads to greater knowledge sharing and standardization, with best practices emerging, and the added benefit of reduced staff numbers due to economies of scale. Companies must also be aware of legal restrictions on data sharing between countries, which may mean retaining local teams. A centralized department is also reliant on strong, integrated systems and processes. The pros and cons of centralizing should be properly considered from all angles before any decision is taken. Peter Mercieca Head of Telecommunications & Media Asia PacificFewer than half (42 percent) of respondents say their RA function is cross- Only 42 percent offunctional with a balanced representation across departments. As mentioned,the complexity of the telecommunications environment means that leakage respondents say theircan occur at any stage of the revenue generation cycle. Cross-functional RA function is cross-membership should bring an understanding of each part of the business andthe accompanying interdependencies. In particular, a strong link between RA functional with a balancedand the broader risk management function should be considered. Without such representation acrosscross-functional knowledge, it’s difficult to gain an all-round picture, leavingcompanies more susceptible to leakage and fraud. departments. Is RA a cross functional team?80 76%70 56% 58%60 52% 48%50 44% 42%4030 24%2010 0 Africa & Middle East Asia Pacific Europe & Americas Global N = 78 respondents Yes NoSource: KPMG Global Revenue Assurance Survey, 2012 21© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
  24. 24. E ntering a n ew e ra And most (64 percent) do not have a cross-functional RA steering committee comprising of head of departments of all functions (who would meet periodically to assess the extent and sources of revenue leakage). Such a body can help spread best practice and extend the influence of RA. Respondents from Africa and the Middle East are the most likely to have such a committee, with organizations from Asia Pacific lagging behind. Proportion of organizations with cross-functional RA steering committees 80% 80 70 66% 64% 60 52% 48% 50 40 34% 36% 30 20% 20 10 0 Africa & Middle East Asia Pacific Europe & Americas Global N = 73 respondents Yes No Source: KPMG Global Revenue Assurance Survey, 2012 Supporting the business Most of the respondents say their RA function focuses primarily on network, billing and product-related assurance. However, considerably fewer are involved with customer service and sales assurance, and only a third (35 percent) carry out regulatory checks as part of a wider RA review. These findings are further evidence that RA is still viewed as more of a support function than a strategic partner. RA departments in organizations from Asia Pacific appear to be particularly narrow in the scope of their responsibilities.22© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.

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