Eric has raised a quite interesting question – (Why Did Revenue Assurance Fail to Spread to Other Sectors? | Commsrisk); the eye-opening answers to it could unleash efforts to grow our profession and careers.
Revenue assurance, in sentiment and substance, is not as ahistorical outside telco as one might think. But it has failed to spread to other sectors because the players in those sectors seem to have had a blinkered view of revenue assurance, first associating it with telco, a predominantly technology industry, and secondly viewing it only through the prism of revenue. The telco-centric view beclouded the universal benefits of searching for and recovering value leakages from operations generally.
I come from the accounting sector where my experience is that the din of technology hype cycles trepidated many in the profession; the angst made us timid to learn technology early and orchestrate the consilience necessary for innovation as we headed into the knowledge age and big data. And without technology awareness to think with consistently, we failed to discern and ideate revenue assurance as a service to deliver to clients despite the fact that the opportunity was there in plain sight. It is noteworthy that operational auditing, performance auditing, and value for money auditing have existed for a long time having the same value safeguarding objectives as revenue assurance. The healthcare industry is huge on cost reduction, which has moved to cost containment, to cost optimization – all of which ultimately safeguard value the same way revenue assurance does.
After I left Deloitte in 1992 my firm, EDP, became African resellers for Audit Command Language (software for auditing through the computer and audit thought support, as we thought of it), developed by ACL Services Ltd, Vancouver, BC, Canada. The ACL software was actually for audit data analytics (in today’s parlance), built for auditors to perform substantive procedures on computerized systems, analyzing and testing for controls compliance and substantive testing of transaction details and account balances.
Initially, we functioned as subject matter experts to audit teams in client offices. But as we got deeper into the service we started noticing increasing findings of revenue leakages, value omissions, cost duplications, and the likes. So we hived out a service called revenue assurance consulting and training; soon we presented the seminal bank revenue assurance training in the country, perhaps the continent, and perhaps still, in the world, at EDP Center, Lagos, Nigeria. Since by this time no one, to the best of our knowledge, had offered “Bank Revenue Assurance” service and training, we sincerely believe we quietly pioneered a novel service in the industry, arguably.
Our initial clients were mostly from the financial services sector. Our early problems included convincing management of the efficacy and return on investment from revenue assurance. We solved that problem by offering free but compelling proof of concept (POC) projects, after which we negotiated an engagement.
The purpose of a POC is to shift the doxastic state of the decision-makers most of whom were groomed with industrial age memes; they were also timid toward technology. They needed more tangible evidence of the value optic – it would not be a cheap model for selling services but very pragmatic. Revenue assurance is a service and intangible. According to Levitt (1981, Harvard Business Review article, Marketing Intangible Products and Product Intangibles (hbr.org)), “the degree of product intangibility has its greatest effect in the process of trying to get customers. When it comes to holding on to customers—to keeping them—highly intangible products run into very special problems.” We also learned from Lovelock’s 1992 book (Services Marketing) at the time that customer evaluation of intangible goods is different and that we needed to reach the heart of the clients in a different innovative way. With prehensile rigor and some element of serendipity, we figured out that POC would best shift the doxastic state of that generation of decision-makers, when one Chief Audit Executive requested that we do “active ACL demo” using live transaction data; it worked and opened our eyes to the huge impact of POCs. In another contrastive experience, one Chief Audit Executive at the time told us that the technology would have to wait for him to retire before his organization would buy it and that is what happened may years later after he retired. Discussing technology caused him much cognitive dissonance so he preferred not to broach the subject. Today that bank is using ACL for revenue assurance.
In one of the best results that we had the bank recovered millions of dollars that boosted the reported profit for the year. The project ROI was over 400% – this represents a world-class achievement not yet repeated in our market, to the best of my knowledge. EDP is still the leading stable of revenue assurance expertise in the African continent. Today, revenue assurance is well known [read “has spread”] in the banking industry in Nigeria where many of the expertise were groomed at EDP Audit & Security Associates. EDP experts are technically fluent with the ACL audit software, now called ACL Robotics (ACL Robotics – Robotic Process Automation Software – Galvanize (wegalvanize.com)) and its application to revenue assurance. A few non-banking clients are using the software now in our market.
So again, to answer Eric’s question more directly, revenue assurance has not spread to other sectors because of lack of institutional motive in the profession and lack of service innovation capabilities in those industries. One of the undertows is lack of dexterity with technology because the sectors that are lagging have shown tamely attitude toward technology adoption, deployment and exploitation; technology exploitation is the critical key to service diversification; acquired but unexploited technology cannot yield innovation. In the accounting and auditing sector we have seen evidence of commendable efforts to deepen revenue assurance services. Here are a few examples:
· KPMG India – REVENUE ASSURANCE SERVICES: (Revenue Assurance – KPMG India (home.kpmg))
· Deloitte Revenue Assurance services – (Deloitte Revenue Assurance services | Deloitte CIS | Risk)
· KPMG Cost Optimization Services – (Cost optimization – KPMG Russia (home.kpmg)).
· PROFIT INSIGHT – (PI³ Platform | Profit Insight).
I believe that the accounting sector will lead revenue assurance services eventually.
With some prescience I introduced a program in Nigeria in the 2000s to get accountants to adopt and exploit technology. As the founding Chairman of the IT Committee of the Institute of Chartered Accountants of Nigeria (ICAN) I ideated the Technology Competence Initiative (TCI) program which the Institute adopted to train chartered accountants in information technology. The result is that many young accountants, now with some degree of consilience, developed the courage to learn more technology and develop career in revenue assurance using tools like ACL Robotics. Some have advanced to cybersecurity analytics. The initiative turned Nigeria from a net importer of audit data analytics expertise to exporter of such expertise with many Nigerian professionals hired away by big companies in Europe and North America. This is what happens when societal change is driven by cultural purpose tenaciously followed by a generation of its people. That generation must accept to make the transition to the knowledge age armed with its major fundamental: the discipline of learning. This is what happens when institutional strength is exerted to give support to change. The ICAN deserves commendation for this progress.
My heart is supremely requited that I lived to have the privilege to give back to society and be part of this civilization in my community.
Christian C. Ekeigwe, FCA, CPA (Massachusetts), CISA, CFE
Founder/Chairman, Audit Committee Institute, Nigeria/Center for Audit Quality.
 Lovelock, C. H. (1992). Managing services: Marketing, operations, and human resources. Englewood Cliffs, NJ: Prentice-Hall.