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Governance, Risk & Control

Revenue and Cost Management

The ever increasing complexity of TMT value chains means that tracking and assuring billable events, digital content, revenue share deals and validating costs continues to be a challenge, in particular the high volume, low-value transactional nature of the telecoms industry. This is also due to the combination of a complex systems environment, supporting poorly defined business processes which can result in significant revenue leakage and billing errors.

Why is it an issue?

Aside from the regulatory requirements for service providers to ensure the accuracy and completeness of customer bills, the business impacts of inaccurate and incomplete customer billing can be significant. Overbilling gives rise to working capital challenges, operational inefficiencies and can drive call centre traffic, whereas underbilling directly impacts financial performance.

Service overview

There are three main elements to our revenue and cost management services:

  • Revenue management is a collaboration of organisational structure, consisting of people, processes, technology and information responsible for understanding and monitoring the entire revenue process. Revenue management can deliver significant added value to a telecoms or technology client in the short, medium and long term
  • Our methodology is supported by our Revenue process model and we typically adopt a phased approach to deliver end-to-end revenue and cost management solutions:
    • Diagnose: a risk based review of the revenue environment aimed at rapidly identifying potential areas of control weakness and/or opportunities for revenue recovery and cost savings. 
    • Assess: detailed analysis of prioritised areas of risk with a view to quantifying control weaknesses, recovering revenue and reducing costs. 
    • Implement: the implementation of solutions to address the issues identified to stop them recurring and can range from designing and embedding controls, developing and implementing a Revenue Management strategy or helping in software selection.
    • Monitor and assure: the development and implementation of tools, processes and operating models to manage the ongoing monitoring of the changes that have been delivered to ensure that a sustainable revenue management strategy is in place.
  • Cost management is closely tied to revenue assurance and organisations can benefit from taking a shared view of both of these challenges. Deloitte has experience in taking a data-centric approach to these issues and delivering substantial financial benefits.

For data and revenue analytics projects, we are able to call upon a wide range of supporting technologies including all of the most commonly-used tools. Using our data experience and telecoms domain expertise, we are able to integrate the various tools to provide a ‘best of breed’ solution that supports business strategic objectives.


Internal Audit

Our Internal Audit services cover a wide range of skills and specialities, providing guidance to Management and the Audit Committee over the design and operation of controls over business processes.  This covers not only financial processes but all areas of a company’s operations, including operational processes, outsourcing, management of third parties, support functions and IT.

A robust control environment is key to any organisation, however it is especially important for organisations that are complex, fast changing and focusing on efficiencies. These are all characteristics of organisations operating in the TMT sector. Our approach to Internal Audit is to provide a tailored service that supplements core risk and control specialists with subject matter experts as required. This specialist input, together with our independence and flexible approach to different co-sourced internal audit staffing models has helped us build a broad range of TMT focused Internal Audit expertise.

Why is it an issue?

  • TMT organisations tend to be complex, global and fast changing. Internal Audit can play a key role in ensuring that the organisation operates in a robust and controlled manner despite these challenges
  • The industry is heavily regulated and management need to ensure that they have implemented effective processes to ensure compliance with these regulations
  • Media organisations, especially, are home to creative individuals who thrive on freedom and opportunity. Internal audit can help media companies behave in a manner consistent with that expected of major corporates whilst retaining the creative edge.

Service overview

Our two main services in support of internal audit functions are:

  • Provision of Internal Audit services under flexible co-sourcing or out-sourcing models
  • Internal Audit effectiveness reviews and benchmarking.

Internal audit is becoming increasingly specialised and for many functions building a team that includes all the relevant skills and capabilities is not cost effective or practical. For this reason many organisations consider entering into a co-sourced internal audit relationship which provides them with access to specialist skills as required.

Find out more about our Internal Audit services


Controls Transformation

Rapid growth and constant change in the TMT industry makes it challenging to implement robust control environments. The convergence between technology, communications and media that is driving many of the new products and services is also responsible for blurring the boundaries between these sectors and disrupting existing systems, people and processes. A well balanced, flexible control environment that is focused not just on financial or regulatory control but also on operational efficiency and integrity can support and enhance TMT organisations’ strategic objectives and challenges, including:

  • Revenue growth
  • Customer service excellence
  • Cost reduction
  • Successful execution of system change and integration activities.

Why is it an issue?

Internal control is at the top of the executive agenda. Executives realise that just because you are compliant does not mean your risks are well controlled. Solid controls can also drive and protect shareholder value, brand, margin, and critical assets. When management know they have the right controls, they act more confidently and can rely on those controls to manage risks. Recent events show that when controls are weak and break, organisations are exposed, resources are wasted, costs are driven up and management is distracted from running the business.

Service overview

We can rapidly understand your control framework and issues, and design and implement the relevant controls to transform your control environment into a sustainable and repeatable framework that adapts with your organisation.

We use a practical, collaborative approach based on four key components:

  • Understand and diagnose
  • Design
  • Implement
  • Monitor and assure.


Customer Trust

The importance of the customer relationship and the need to demonstrate that TMT organisations take this relationship seriously can be demonstrated by the public reaction to scandals in premium rate audience interactivity on a number of high profile TV programmes. In an increasingly competitive consumer and B2B market, and with the proliferation of social media as a mechanism for sharing good and bad customer experience, it’s critical that TMT businesses win the trust of their customers and can back this up. For example, customers should be able to trust that their data is secure when speaking with a call centre, or that claims and charters presented by organisations with regard to customers (such as promises to serve customers in a certain time frame) actually hold true.

Why is it an issue?

  • The reputation and brand of TMT organisations (both consumer and B2B) is a key factor for success, and negative publicity can have a serious adverse impact. Customers will interact with TMT organisations they trust and share values with, however if these values are not supported or adhered to internally, organisations run the risk of losing the trust of their customers and potentially losing their custom to a competitor
  • Independent reviews can add significant weight and credibility to publications, for example that the results of a survey are complete and accurate or that an organisation is adhering to published metrics or customer charters
  • Regulators within the TMT industry space have been seen to act swiftly introducing regulation and legislation when breaches of customer trust have been identified, for example Ofcom introduced a variation to all broadcast licences requiring that broadcasters wishing to interact with viewers via premium rate services must obtain independent third party verification for those services.

Service overview

Our approach is based on a four phased approach designed to identify and assess the specific and relevant brand values, regulatory requirements or public commitments (e.g. customer charters)

  • Risks: identify the relevant processes and customer interfaces (e.g. online, call centres, retail, advertising - dependent on the focus of the review), identifying the key risks and associated controls
  • Framework: produce a tailored controls framework and associated test plans
  • Test: perform periodic detailed controls testing and/or recalculation of key reports/metrics
  • Report: reporting can be direct to management or through formal reports.


Enterprise Risk Management

Enterprise risk management has never been a hotter topic. The past few years have witnessed a number of unexpected events that have damaged, and in some case destroyed, businesses – from the financial markets crash, to the ash cloud, to the oil spill in the Gulf of Mexico. The TMT industries, perhaps more than any others, are undergoing massive change, from emerging technologies to changing business models. Over the next few years it will be the organisations that have a clear view of where they want to be in the value chain, what might prevent them getting there and how to manage this that succeed – i.e. those with good risk management.

Why is it an issue for TMT?

  • Companies need to understand and embed their risk appetite across their organisation – from programme commissioning to developing new interfaces
  • The industry is changing significantly – change provides significant opportunity to create value but the risks to achieving this need to be managed – the challenge will be identifying these in an evolving marketplace and reacting to them in good time
  • Regulation – the TMT industries face increasing regulation across the world – companies need to react to and manage these emerging risks in a timely manner
  • Existing value protection – many TMT companies have assets that are critical to their operating model, from a telco’s network to a critical piece of technology – the risks to these assets need to be identified and managed.

Service overview

We assist companies improve their risk management in a number of ways. We can perform an independent assessment of existing risk practices, comparing to internationally recognised standards and leading practice, to provide both guidance to senior management and the Board as to what is happening and a roadmap for improvement. We also assist companies in developing and implementing their risk management frameworks – from helping them define and embed risk appetite, to identifying key risk indicators, to performing deep dives into how specific risks are being managed.

We have worked with a large number of organisations across a variety of sectors in recent years. This allows us to bring a unique perspective into what good looks like – there is no ‘one size fits all’ solution but Deloitte has developed an extensive set of tools and methodologies to allow us to rapidly add significant value to a company’s risk management.

Find out more about our Enterprise Risk Management services


Reporting with Confidence

Management and stakeholders (investors, regulators, advertisers) are becomingly increasingly reliant and focused on operational Key Performance Indicators (KPIs) to provide a view on a business’ performance and therefore its value as well as the cost of other key services such as advertising. Often the metrics that support this information are non-financial and may not be included within the scope of an external audit.

Why is it an issue?

  • Businesses within the TMT industry are increasingly reliant on usage metrics and KPIs to demonstrate consumer take up and penetration of services. Metrics are powerful indicators of performance and are attractive to a variety of stakeholders including the online advertising community, investors and analysts
  • The industry is focused on product innovation, speed to market and growth and has typically not focused on ensuring the integrity of key reports that management and external stakeholders use for making decisions. The risk of inaccurate and incomplete reporting is often exacerbated because of multiple systems that do not interface, manual intervention in the reporting process and the use of assumptions that change over time
  • Independent validation of performance metrics provides assurance to stakeholders that reportable KPIs can be relied on and that internal controls have been established to protect their integrity, availability and confidentiality.

Service overview

Our overall approach is outlined below:

  • Define KPIs that will be subject to independent validation
  • Identify the processes, systems, data and assumptions that underpin these metrics
  • Identify the internal controls that management relies upon to protect the completeness, validity, accuracy and integrity of the in-scope KPI’s
  • Obtain and review supporting rationale for assumptions used in the reporting process
  • Validate the ongoing effectiveness of the internal controls which protect the integrity of the in-scope metrics and which support management’s control objectives
  • Use data analysis tools and techniques to test the integrity of reportable metrics (e.g. through re-calculation where source data is available)
  • Use recognised audit standards to establish a scalable and repeatable framework to provide ongoing assurance to stakeholders.


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