Software Suite Puts Plug In Revenue Leaks

GuideComm recently launched RevenueOptimizer, a software suite that discovers latent or lost revenue opportunities within the service provider's back-office infrastructure.

"In the past [for service providers, it was, 'Let's go as fast as we can to get our network built and services deployed to capture market share,' " said Alan Gilbert, vice president of strategic alliances at GuideComm. "There is more focus now on, 'How can we make sure we are getting the most out of every dollar we spend?' "

Over the past four years, the Chantilly-based solution provider has specialized in integrating Operational Support System (OSS) infrastructure for carriers, ISPs, ASPs and other communications service providers. The expertise GuideComm gained from developing OSS programs for managing communications networks enabled it to develop RevenueOptimizer, Gilbert said.

On the average, as much as 20 percent of service providers' revenue is lost or collected late because of errors in back-end processes such as service provisioning, order entry and billing, Gilbert said. For example, service providers regularly turn services on for customers without billing them, or bill for different bandwidth or service-level agreement commitments than customers actually receive, he said.

The problem is exacerbated if service providers are paying commissions to sales reps on services that are never billed, Gilbert said.

While service providers of all sizes can encounter such problems, companies with large customer bases and antiquated OSS systems run the highest risk, said Tim McElgunn, senior research analyst at Stratecast Partners. In one instance this year, WorldCom overpaid sales employees $4 million in commissions because a gap in the system allowed the reps to double-book sales, he said.

"Whether it's direct revenue loss or just dissatisfied customers resulting in reduced business, these are critical issues for all carriers of all sizes at this point," he said.

Preventing revenue leaks is particularly important for carriers serving large enterprise customers, since it can be difficult if not impossible to recover revenue once it's lost, McElgunn said. "They can't go back to a customer, especially a large customer, and say, 'By the way, we've been missing $4 million per month so we're going to back-bill you for it.' It wouldn't fly," he said.

GuideComm is not alone in attempting to tackle revenue leaks for service providers, McElgunn said. About 10 large systems integrators and OSS vendors have developed tools similar to GuideComm's RevenueOptimizer, he said.

RevenueOptimizer is a modular software suite that gathers transaction data from OSS programs such as billing, provisioning, order entry, commissions, network management and service-level agreement performance and then correlates the data to discover discrepancies, said John Sankovich, director of consulting solutions at GuideComm.

The product also generates reports that can be customized to show data according to customer group, product or region, Sankovich said.

Service providers can use RevenueOptimizer to discover patterns that reveal problems in their business processes, Gilbert said.

"Maybe you don't send a bill for 45 days and maybe the bill should be sent within 15 days so you can start to collect within 45 days, which is when you want to see the money coming in," he said.

Service providers can also determine whether the cost to fix a problem is justified by the amount of revenue being lost, he said.

"If a $50 million problem can be fixed with a $1 million investment, by all means go ahead and fix it," Gilbert said.

GuideComm has signed up a handful of undisclosed clients for RevenueOptimizer, he said.