Accenture Communication Solutions

Accenture Helps VimpelCom Take Strides

Toward High Performance Through a New
Revenue Assurance Program
Client profile
The VimpelCom Group consists
of telecommunications operators
providing voice and data services
through a range of mobile, fixed
and broadband technologies. The
Group includes companies operat-
ing in Russia, Kazakhstan, Ukraine,
Uzbekistan, Tajikistan, Georgia,
Armenia, as well as Vietnam and
Cambodia, in territories with a total
population of about 340 million.
As those countries developed healthy
appetites for communications prod-
ucts and services, VimpelCom saw an
enormous spike in the demand for its
services. The company has been on
a strong growth trajectory, having
posted a record revenue of $10.1
billion for the 2008 fiscal year.1
Business challenge
No company wants to miss out on
opportunities to reduce leakages and
costs and to maximize revenue and
profitability. But that’s precisely what
many communications companies are
doing because they do not adequately
ensure they are billing for and col-
lecting all the revenue they are due.
Accenture research has found com-
munications operators, on average,
lose at least 1 percent to 2 percent
of their revenue due to network and
accounting inefficiencies, increas-
ingly complex technology and delivery
models, a focus on metrics that do
not ensure orders translate into cash
and a lack of visibility into the cus-
tomer-to-cash cycle.2 On the other
hand, the same research highlighted
that, on average, at least 2 to 3 per-
cent of total revenue that otherwise
would have been lost could be saved
through the use of structured revenue
assurance controls and tools.
Furthermore, meeting the revenue
assurance challenge is only getting
more difficult. As carriers introduce
advanced data services and digital
content, the number of trading
1VimpelCom 4Q08 and FY08 Financial and Operating Results. http://www.vimpelcom.com/investor/index.wbp
2Accenture Revenue Assurance Benchmark Survey. January 2007.
partners increases and, subsequently,
so do the chances of revenue leakage.
Revenue leakage is particularly dif-
ficult to control during periods of
robust growth. For example, as a
communications company rapidly
gains new customers and develops
new products and services to serve
them, tracking network usage and
ensuring accurate billing becomes
very complex. Indeed, a major con-
tributor to the strong growth posted
by VimpelCom in the past few years
has been the broad array of plans the
company has offered: pre-paid and
post-paid services, short message
services (SMS), and voice and mobile
data, all delivered across a variety of
technologies and on varying terms
(with respect to marketing offerings,
tariff plans and options). The com-
bination of offering complexity and
VimpelCom’s rapid growth meant that
simply understanding what customers
had bought, what they should be
charged and how the company’s
infrastructure was being utilized
was a significant challenge.
While VimpelCom management
was pleased with the company’s
high rate of growth, they were also
concerned the company might be
losing revenue. Thus, they embarked
on an initiative to develop the reve-
nue assurance capabilities they need-
ed to identify and eliminate sources
of revenue leakage. Importantly, the
solution ultimately developed would
not only have to provide immediate
impact in terms of revenue recovery,
but also would need to be scalable
to accommodate VimpelCom’s long-
term growth plans and its pursuit of
high performance.
Indeed, Accenture’s ongoing High
Performance Business research has
found that distinctive capabilities that
enable a company to out-execute its
competition are a building block of
high performance. A revenue assur-
ance function and its supporting
system that can help companies work
to minimize revenue losses and maxi-
mize profitability are a prime example
of such distinctive capabilities in the
communications industry.
To help achieve its goals, VimpelCom
teamed with Accenture. VimpelCom’s
executives viewed Accenture as a
valuable collaborator in the communi-
cations company’s revenue assurance
effort for several reasons: Accenture
had a long history of serving some
of the world’s most influential com-
munications companies and extensive
experience in designing and imple-
menting industry-leading revenue
assurance capabilities. Furthermore,
Accenture would bring to the project
its insights into how leading commu-
nications companies use distinctive
capabilities such as those support-
ing revenue assurance to help them
achieve high performance. Finally,
Accenture’s global resource footprint
meant the company had people in
the areas in which VimpelCom oper-
ated and, thus, could bring to the
project insights into local require-
ments and culture.
How Accenture helped
After carefully assessing VimpelCom’s
situation in terms of risk areas and
revenue leakages, Accenture set out
to help the company design and
build its first-ever revenue assur-
ance function and implement both a
set of effective quick-win solutions
and a new cutting-edge switch-to-
bill monitoring system. Together, the
new function and system would help
position managers to detect, prevent,
analyze and fix revenue leakages all
along the revenue stream.
The joint Accenture and VimpelCom
project team followed Accenture's
four-phase revenue assurance pro-
gram. The first step of which was
assessing VimpelCom's revenue
streams to identify areas of potential
leakage. After studying four segments
of this stream—order-to-delivery,
order-to-bill, usage-to-bill, and bill-
to-cash—the team found 75 potential
areas leading to actual leakage of
several million dollars and a possible
several million dollars in additional
lost income.
Further analyzing VimpelCom’s exist-
ing business processes, the Accenture
team determined the company could
eliminate approximately nearly $3
million of identified and estimated
leakage with minimal effort by
implementing a set of “quick win”
solutions. One such solution was
implementing standardized error
management procedures. Another
was deploying a test call program,
which would enable VimpelCom to
model customer behavior and network
usage across regions, technologies
and plans. This activity would help
managers to quickly identify where
revenue was being lost—for instance,
through inaccurate billing for the
amount of data services actually used
or failure to reprocess and resubmit
the service usage information due to
errors in the application architecture.
Having identified several areas where
an effective revenue assurance func-
tion could add business value quickly,
the team moved on to the second
phase, in which it designed and built
just such an organization. The func-
tion Accenture ultimately created
in conjunction with VimpelCom’s
professionals was centralized under
the company’s chief financial officer
at the corporate level and comprised
approximately 50 employees from
across Russia identified in the initial
phase.
Once VimpelCom’s new revenue
assurance team had been established
and quick wins captured, the project
team set out to complete phases
three and four: defining and imple-
menting an automated switch-to-bill
system to help support the detection,
prevention, analysis and resolution of
“ Accenture was an excellent partner in our rev-
enue assurance program,” said Andrey Maneshin,
Revenue Assurance & Fraud Management Director
at VimpelCom. “Their insights and experience were
really valuable in helping us create a solution that
enables VimpelCom to more closely manage our
revenue streams and minimize losses. That adds
up to a lot of money saved—and, thus, greater
profitability—every year.”
revenue leakages. VimpelCom chose revenue assurance function to iden-
WeDo Technology’s RAID solution tify, analyze and fix revenue leakages.
for this task, and asked Accenture Finally, its user-friendly interface
to help the company gather user enables VimpelCom’s revenue assur-
requirements for, and subsequently ance managers to spot problems and
implement, the tool. Implementation develop innovative solutions. In fact,
occurred in four stages, beginning in the four months after VimpelCom’s
with the SMS prepaid and postpaid new revenue assurance capabilities
end-to-end revenue streams, followed and processes went live, the company
by revenue streams from voice, GPRS saved several million dollars. On an
and roaming, and finally integrated annual basis, the program allows
revenue from interconnection, includ- VimpelCom to save more than three
ing payment channels monitoring. percent of the company’s total rev-
In its finished state, the new tool enue and identify more than one
automates and manages VimpelCom’s percent of revenue losses to be con-
end-to-end revenue assurance pro- trolled and minimized.
cesses, seeking out evidence of rev- Beyond pure financial value,
enue leakages in large volumes of Accenture’s capabilities have helped
data from a wide variety of sources, VimpelCom position itself for high
including the company’s voice, SMS, performance. The new revenue assur-
roaming and interconnection traffic. ance tool gives the company unprec-
edented visibility into the usage, per-
High performance delivered
formance and limitations of its exist-
With its new capabilities in place,
ing infrastructure, in addition to bet-
VimpelCom now can closely moni-
ter knowledge and control of revenue
tor the revenue chain from the point
leakage. Also, by the time the project
at which a new subscriber begins
was completed, VimpelCom was ready
using the company’s network to the
to assume sole responsibility for fully
generation of accurate invoices for
managing the released controls, solu-
that usage. In fact, the new system
tions and tools and was equipped to
achieves up to 99.8 percent reconcili-
enhance them accordingly.
ation accuracy, despite processing
more than 1 billion call data records VimpelCom's revenue assurance
(CDRs) in 26 different data formats capabilities are expected to be a
per day. The new switch-to-bill sys- major asset for the company as it
tem also provides VimpelCom with looks to continue its strong growth
more than 100 key performance indi- and pursue high performance in the
cators and 30 reports that enable the years to come.
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2007 Accenture
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