the number of cost line items. Broadly, margin assurance quantifies the profitability of products and services by considering the entire portfolio and its performance. It helps operators decide when and how to retire products such that customers can enjoy uninterrupted services while retaining the most popular features. It also gives business teams visibility into the revenue generated. Furthermore, network teams can track asset performance and, subsequently, ROI across different regions. In turn, such insights will allow business teams to make relevant decisions including optimizing assets and products in low-performing geographies.

Maintaining a margin for each product, individual customer, and partner helps CSPs in segmenting products. They can understand the types of cost parameters involved and identify high to low-margin customers and accordingly tailor product campaigns. Margin assurance also supports credit risk teams in measuring customer risk, enables marketing teams to identify opportunities for upsell and cross-sell, and aids finance teams in forecasting the potential P&L for product launches. In cases where margins and cost modeling are part of the product launch, margin assurance can cover multiple aspects to mitigate risk factors involved in these decisions.

When implemented properly, margin assurance can be an enabler for superior business outcomes, contributing to elevated profitability, improved competitiveness, and enhanced customer satisfaction.

Top capabilities enabled by margin assurance

The right margin assurance solution combines consulting, business, and engineering expertise with modern data processing capabilities. It allows CSPs to integrate all cost and revenue sources across operations and business into a single model that can process hundreds of records to gather subscriber-level information for use in finance, marketing, sales, and technology teams. Rapid processing and intuitive dashboards also help telcos track profitability at service, network, partner, and technology levels for every user. Additionally, the right margin assurance solution drives collaboration among experts within the CSP organization for in-depth cost models that compute and allocate costs to users, regions, networks, sales channels, or products.

From a product performance standpoint, a modern margin assurance solution can measure customer adoption of new products so business teams can get alerts on low-performing products and gauge product profitability. They can also perform what-if analysis using product or network simulators to know potential profitability, expected costs, and possible adoption of new products. With this information, CSPs also become aware of soon-to-be launched products that may eat into their margins, so they can quickly rationalize product portfolios.

Finally, a key capability enabled by margin assurance is granular views into demographics, enabling telcos to curate offers for enterprise customers based on historical data and usage patterns.

Benefits of margin assurance

CSPs adopting margin assurance solutions with the above capabilities can expect several benefits, the most immediate being enhanced cost modelling and cost allocation. The solution will flag negative margins and execute near real-time validation to identify product profitability. As operational changes take effect, it will support them in shifting from ARPU (average revenue per user) to AMPU (average margin per user) models. Eventually, CSPs will be able segment customers more effectively, increase sales, and map capacity implemented to capacity utilized through actual product usage.

The margin assurance imperative

Digital disruption and new technologies make it imperative for CSPs to take steps that ensure long-term profitability. A case in point is recent observations that indicate a decline in the revenue growth of wireless, fixed line, cable, and satellite service providers, without a correlated decrease in investments or operating expenses.

Margin assurance has the capability to optimize the bottom line by managing a complex mix of service offerings, defining holistic views for cost allocation, and enabling automated, real-time margin assurance.