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Are Service providers addressing the revenue leakages internally?

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Apr, 2014


In the current paradigm shift, Organizations are moving towards Cloud-based billing services which dramatically reduce their software and other computing costs. And the recent reports/source indicates or predicts that Interest in the SaaS (software as a service) delivery model is growing to the point that by 2015 and almost 85 percent of new vendors will be focused on SaaS services. As the market for cloud services accelerates, more and more players are positioning themselves to secure their role in the fast emerging Cloud marketplace. The launch of any new services that contain several new processes across a number of partners’ platforms and multiple carriers should be monitored closely to handle the revenue settlements & leakages. To succeed service providers need to offer many types of services across SaaS, PaaS and IaaS, using innovative business & pricing models. During this process every service provider has a real challenge in addressing the requirements of the customers. Hence, service providers provide / cater its customers a rich and diversified set of products & offerings to meet the changing needs. But are the same service providers also able to address the revenue leakages in their organization?

So service providers moving on to cloud computing business means organizations might have some existing legacy applications to support cloud business or make the necessary architectural changes to systems to meet the customer requirements.  But during this process some of the major hurdles which the existing legacy systems come across are

  • Inability to add/have richly interactive (web based) and required modules
  • Less Flexible in handling rapidly changing consumer requirements and business models
  • New standards/compliance/regulations/reporting can’t be implemented/supported on time
  • Involves longer manual integration processes
  • Merger and Acquisition – need to integrate business processes
  • High cost of maintaining legacy systems reducing available budget

And because of some of the above factors chances of revenue leakages are very high. So a legacy system does not have the agility that most businesses require to support changes in their processes and it is costing far too much to maintain. To overcome the above mentioned deficiency cloud computing players either “build or buy” third party applications which fit into the existing ecosystem to run the business smoothly.  While making the necessary changes Organizations do suffer some revenue leakages. So service provider needs help in identifying the sources/points of leakage, quantifying the volume of revenue loss and also in minimizing/avoiding revenue leakage.

Revenue Leakage may occur due to incorrect pricing, operational inefficiencies, missing transactions, non priced transactions, uncollected revenues, etc. In various stages of the customer relationship life cycle, such as prospecting, on-boarding, order processing, billing and recovery, monitoring and service closure, there can be cracks that give rise to revenue leakage.  So an efficient system should be in place in order to track/overcome the leakages. And in cloud computing business, the basic trend is pay as you go. So Pay per use requires a granularity so fine that it allows visibility on exactly what resources were consumed.  The Cloud Provider then charges for these resources, not more and not less. Hence a right billing and monetization Platform helps to overcome the leakage loopholes.

By : Satish Garikipati

Satish Garikipati is a consultant with SURE! (a Magnaquest product). SURE! is an internationally acclaimed player in comprehensive end-to-end Subscription Business Solutions for PayTV, Broadband and Cloud Computing businesses – through deployment of Metered Billing, CRM, Service Fulfillment, Value-Added Services, and Managed Services.

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