E1-E2 (EB)/Project Kuber

Rev date 19.03.2011

E1-E2 (EB) Chapter 13 Project Kuber

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E1-E2 (EB)/Project Kuber

Rev date 19.03.2011

PROJECT KUBER
As part of Project Shikhar, BSNL had launched a project on revenue assurance, named Kuber based on the inputs from BCG. A pilot of the project was launched in Pune SSA to detail out the design and learn from on the ground implementation. Since the launch, the pilot has been very successful, already resulting in achievement of ~30% of target. This is now being rolled out nationally. This letter will provide you with an overview of the Collection Initiative of Project Kuber along with a set of activities that have to be carried out by you immediately, to enable a successful national roll out. Overview of Project Kuber: Revenue Assurance is the process of assessing and preventing revenue leakages across the billing value chain, including the processes of measurement, billing and collection. Through a process of opportunity identification and prioritization, two initiatives were identified for immediate roll out: Collection of Bad Debt Leased Circuits Billing The following sections will focus on Collection of bad Debt

Collection of Bad Debt: As on 31st March 2008, BSNL had cumulative bad debts (outstanding grater than 3 months old) of Rs. 4399 crores. Of the Rs. 4399 crores, 1411 crores of bad debt is less than 2 years old. The Collections initiative will focus on recovery of these bad debts through a segmented approach, appointment of external bad debt collection agencies and increasing efficiency of internal BSNL team. In the pilot held in Pune, the following activities were conducted: Segmentation of bad debt on the basis of age, account size and geography Assessment and appointment of collection agencies Setting up internal teams and processes for support, monitoring and review For internal circulation of BSNL only Page 2

E1-E2 (EB)/Project Kuber

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Creation of internal team for collection of large value accounts Over Rs. 60 lacs of bad debt has been recovered by the initiative so far in Pune. Based on the activities being carried out in Pune, we estimate that there is an overall potential of Rs. 250 300 Crore from the initiative on bad debt collections. Key Activities:
This section describes in detail the set of activities that need to be conducted as part of the Collections Initiative. Collections:

Data collection and analysis Collection of account wise data on bad debt for Basic Services, CMTS and Leased circuits Segmentation of data based on age, geography and account size Appointment of external collection agencies Detailed assessment of collection agencies operating in the SSA Appointment of agencies and signing of contracts Creation of internal team for collection of large value outstanding Creation of support, monitoring and review processes Setting up support and monitoring team at each SSA Setting up system for analysis, links to CSMS etc. Team required for the project: To realize the above mentioned potential, we are launching a national roll out of the Collections Initiative of Project Kuber immediately. The program will be conducted by teams at three levels: Head Office (HO), Circle Office (CO) and SSA. Description of the team required at Circle Office (CO) and SSA are given below.

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E1-E2 (EB)/Project Kuber Required S.No Position Designation GM (Finance) / DGM 1 Circle Head - Collections (Finance) Cicle Circle / SSA

Rev date 19.03.2011 Full Time / Part Time Role

Overall head of project; Part Time responsible for delivery Manage project at Circle

Project Manager Circle 2 Collections DGM / CAO Cicle Full Time

level; Ensure delivery of milestones for all SSAs Responsible for

Project Manager SSA 3 Collections IFA SSA Part Time

execution of project at SSA level

The Project Manager at the Circle level may appoint support staff as required for tracking the activities at the SSA level. The Project Manager at the SSA level will appoint and manage team for executing onground activities. The details of the team required will be provided during training sessions to be held in June. Leased Circuits Billing: Telephone and Data circuits are an important business for BSNL in FY 2008, the revenues from this segment were 757 Cr. However, audits have shown that there are significant leakages in the billing of leased circuits. The initiative on leased circuits would aim to identify the circuits that are currently not getting billed and create a national centralized database of leased circuits. In the pilot project held in Pune, the following activities were conducted Collection of data on leased circuits from all exchanges in the SSA. Comparison of exchange data with data from billing and commercial sections. Updation of database and issuance of retroactive bills based on comparisons. For internal circulation of BSNL only Page 4

E1-E2 (EB)/Project Kuber

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Unbilled circuits worth Rs 10lacs were identified in Pune. Additional revenue expected from this exercise is estimated at Rs 50-100 Cr nationally. Key Activities: This section describes in detail the set of activities that need to be conducted as part of the Leased Circuits Initiatives. Leased Circuits Billing: Data collection on leased circuits from all exchanges in all SSAs To include all information relevant to the circuits Collection of data from billing database To include circuits that are due for billing. Comparison of data from exchanges and billing. Getting details on missing circuits from Commercial section Details to include commissioning dates, billing authority etc. Creation of retroactive bills To be done by the billing section. Team required for the project: To realize the above mentioned potential, we are launching a national roll out of the Collections Initiative of Project Kuber immediately. The program will be conducted by teams at three levels: Head Office (HO), Circle Office (CO) and SSA. Description of the team required at Circle Office (CO) and SSA are given below:

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E1-E2 (EB)/Project Kuber

Rev date 19.03.2011

Required S.No. Position Circle Head 1 Leased Circuits Project Manager Circle - Leased 2 Circuits Project Coordinator Circle - Leased 3 Circuits Project Manager SSA - Leased 4 Circuits GM/DGM SDE/JTO DGM GM Designation

Circle / SSA Role Overall head of project; Circle responsible for delivery Manage project at Circle level; Ensure delivery of milestones for Circle all SSAs

Tracking of activities at SSA level, Circle Assist Project Manager(Circle)

Responsible for execution of SSA project at SSA level

The nominated persons at each level should be ones looking after leased circuits at that level. The Project manager at SSA level will appoint and manage team for executing onground activities. Action Items As a first step, we need to identify the team at the CO and SSA level. A comprehensive training is also conducted for the identified people covering in detail the entire set of activities for the project. Project Kuber is a major initiative that has the potential to recover significant amounts of money, and is the first step in ensuring tighter controls in the future. For internal circulation of BSNL only Page 6

E1-E2 (EB)/Project Kuber

Rev date 19.03.2011

BSNL has cumulative bad debts of ~Rs. 4400 cr for basic services, cellular services and data circuits

Bad debts 1 for BSNL (As on 31 st March 2008)

Rs. Crores
5,000

274
4,000

4,399 99
1,411

3,551
3,000 1,120

574 192 382

175

Bad debts less than 2 years old

2,000 2,988 2,431 1,000

Bad debts greater than 2 year old

Basic Services 2
Bad debt %age3

Cellular-Postpaid

Telephone & Data Circuits 10.0%

Total

3.9%

4.8%

1. Outstanding revenues for more than 90 days after date of invoicing 2. Includes Telephone, Broad Band, PCOs, WLL(F), WLL(M) & ISDN 3. Average for FY2007 and first three quarters of FY2008; Amount billed for (ABF) for Q1-Q3 FY2008, calculated on prorated basis Source: BSNL internal data; BSNL Annual Report FY 2008; BCG Analysis
2

Customer segment Retail (Small and medium ticket size accounts)

Typical Products

Age of outstanding

Collection methodology

Basic Services, 3 - 6 months CMTS postpaid

Outsource to collection agencies,

6 - 12 months prioritizing on size 12 24 or 36 Appoint different agencies based on areas and age of outstanding month In-house team for continuous monitoring of performance

Enterprise Collection strategy

Basic Services, 3 36 CMTS postpaid, Telephone months

Create in-house team for follow up on accounts Prioritize follow up based on size and Page 7

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E1-E2 (EB)/Project Kuber developed on the basis of customer type & age of outstanding: & data circuits age

Rev date 19.03.2011

Weekly monitoring of progress

(Large ticket size accounts)

Govt. & Defense

Basic Services, All Telephone & Data circuits outstanding

Create in-house team for follow up on accounts

greater than 3 Weekly monitoring of progress months

Four step process for tracking small and medium size outstanding accounts:

Identification of outstanding accounts and segmentation Selection of collection agencies and allocation of outstanding accounts Creation of internal teams and systems Monitoring and review Process for Large Size outstanding and Govt. & Defense outstanding accounts: The following accounts should be handled by BSNL internally: Private accounts greater than Rs. 20000 in size, between 3 months and 3 years old For internal circulation of BSNL only Page 8

E1-E2 (EB)/Project Kuber Government and Defense accounts, of all sizes and age The accounts should be divided by the area within the SSA

Rev date 19.03.2011

One CAO/AO per area should be appointed to follow up and collect these accounts The CAO/AO shall report to the SSA IFA on a weekly basis -Report progress -Escalate any issues -Template provided to track progress/issues "Internal Collections"

Format for Nominations for Project Kuber - Collections

CircleLevel Nominations Initiative Position Circle Head Collections Collections Project Manager Circle - Collections Name Designation Mobile No.

Project Manager SSA SSA Level Nominations S. No. SSA Collections Name Designation Mobile No.

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E1-E2 (EB)/Project Kuber

Rev date 19.03.2011

Objective Type Questions: 1. Project Kuber is related with what ? 2. Write down the two initiatives identified for immediate roll out of Project Kuber. 3. The Project kuber will be conducted by the team at three levels.What are these three levels? 4. What are the accounts that should be handled by BSNL internally? 5. What is the role of Project Manager SSA - Leased Circuits? 6. Who will appoint and manage team for executing on-ground activities at SSA level? 7. In which SSA , the pilot project Kuber was launched first? 8. What are the Four step process for tracking small and medium size outstanding accounts? 9. Based on the inputs of BCG, BSNL launched the project Kuber. State True or False. 10. Tick the correct one. Creation of external/internal team for collection of large value accounts xxxx

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