Critical Success Factor
An effective revenue cycle is critical to success of all airlines. Revenue Accounting (RA) fulfils a significant part of the finance department’s responsibilities within the cycle and the function is an essential cog in the core business processes of ‘sales order to cash’ and ‘sales order to revenue.’
We recognise that airlines are at different stages of development and conditions of health in this key area and the landscape is changing all the time. Whether on Passenger Revenue Accounting (PRA) or Cargo Revenue Accounting, our services are for you if one or more of these situations applies to your business:
Business needs not being met?
Change is on the agenda?
Why Involve Us?
Tiralis is an expert and specialist on airline passenger and cargo revenue cycles. Our team and associate consultants have managed revenue accounting operations at a number of airlines and we have delivered successful projects for several clients using our proven methodologies, models and templates.
Whatever your needs, our services include something for you.
Our services cover the entire PRA or CRA life cycle using our change programme, revenue cycle and organisation design models.
The initiation phase covers a strategic review, development of the vision and production of the business case for change.
The design phase develops the vision into a detail specification of the future state covering people, process and systems.
The build phase covers sourcing and in-house build including, systems integration. Depending on the nature of change this also includes a model office for user testing.
The implementation phase uses our go-live decision model and includes an optional post-implementation review.
Our Strategic Review, Fitness for Purpose Review, Benchmarking, Process Redesign, Sourcing, Accounting Standards Manual, Implementation and Post Implementation Review services cover change programme workstreams.
The PRA and CRA reviews are usually the first stage of a change programme and the output is the business case for change.
Our strategic review includes the validation of business objectives driven by commercial and finance needs, the identification of the desired future state and a high-level assessment of the current state using our revenue cycle model. We assess relevance of outsourced vs. In-house vs. mixed operation models in developing the desired future state and we identify the degree of change required. The review can include benchmarking as an additional workstream if the client is able to secure appropriate partners.
The PRA review covers the core sales, travel, interline and accounting processes and can be extended to include revenue protection and customer payments.
The CRA review covers the core billing, sales, travel, interline and accounting processes and can be extended to include revenue protection
On cargo we also offer a strategic review of the entire revenue cycle, from sales order to cash and sales order to revenue with our Logistics partners Sweethill Consulting. This review looks at the upstream commercial and service delivery processes that provide the consignment pricing and movement data for accounting as well as the activities within CRA.
Fitness for Purpose Review
This can be undertaken as a strategic review workstream or as an alternative first stage in developing the business case for change.
Our approach is a fully participative process that focuses on identifying business objectives under six criteria and measurement of the current process to establish the extent to which the process and each sub-process meets those objectives. Stakeholders are asked to give their own assessments on fitness for purpose, which increases buy-in to the need for change. We use our revenue cycle model as a framework for the review.
This is a scaled back ‘Fitness for Purpose Review’ for airlines undecided on the need for step change and airlines seeking improvements to the current state that are unable to give the staff time commitment to fully participate.
We undertake the review and focus on business objectives, process measurement and comparison with best practice. Output includes assessment of each core process, metrics and recommendations for improvement.
We work with the sponsor to develop and deliver a formal benchmarking exercise. This includes the full life cycle, including scope, benchmarking agreement, data collection, quality control, analysis and reporting of results.
The results are subject to a confidentiality and use agreement. Individual participant reports include private individual key indicator comparatives with total population and appropriate peer groups. All results are presented so that information cannot be attributed to any airline, unless the benchmarking agreement allows otherwise or under bi-lateral agreement
This benchmarking model is ideal for airlines and alliances seeking a formal way of sharing performance and best practice without exposure and we recommend a minimum of four participants.
Airlines that do not wish to be a sponsor but would like to participate in a RA benchmarking exercise can express an interest by contacting us. We will facilitate benchmarking using our own template where there is enough interest amongst appropriate peer groups, or if a neutral industry organisation wishes to be the sponsor.
Our services are for management that have already made the decision to change and need process design methodology and subject matter expertise, fresh eyes and ideas and knowledge of best practice.
This is a fully participative process to identify the future state using workshops involving client subject matter experts and stakeholders, an organisation design model and process mapping methodologies. The work is sometimes undertaken prior to producing a system specification or a Request for Proposal (RFP).
We support the strategic and operational sourcing of RA software and BPO partners, either by providing specialist input or managing the tender process itself on behalf of the client. The latter includes specification, market research, tender documentation, vendor liaison and vendor evaluation.
We have proven procurement methodologies and templates for initial research, the invitation to bid and the evaluation of vendor responses. Our approach is to link the requirements with business objectives and associated KPI and to separate the essential items,’Needs’, from the desirable items, ‘Wants’, which is likely to be key in identifying best fit later in the evaluation phase.
Our evaluation methodology and rating system helps you make the right choice of vendor based on best fit with several criteria, including requirements coverage, credibility, values, total cost of ownership and business continuity.
Our template PRA and CRA Request for Proposals (RFP), which includes detailed functional requirements, is also available for airlines that prefer to manage their own tender process but wish to fast track development of the RFP.
We support most delivery models, including
- programmes managed by the client with expert support and resources provided by us on specific phases or workstreams where skill and knowledge transfer is an ancillary objective
- fully managed delivery, where we provide the change programme manager and project resources needed to make the change happen.
We use best practice project management, with stakeholder management and buy-in a theme throughout. A Programme Definition document, which addresses ‘what’, ‘who’, ‘how’ and when’, provides the framework for the plan and a Steering Group with subordinate Working Groups comprising the key client stakeholders are the monitors and decision-making authorities.
We offer a structured approach to identifying the conditions affecting the go live decision. Our go-live decision model assesses organisation and system readiness, identifies operational risks and confirms user acceptance and buy-in for the Steering Group to make an informed and low risk decision to go live.
Post-Implementation Review (PIR)
Our PIR service is for management seeking independent appraisal/sign-off following a recent BPO or systems change project. We focus on the results of the new operation and identify the extent to which project objectives and expected benefits set out in the business case have been achieved. This activity benefits from neutrality so that conflicts of interest do not inhibit an objective, balanced and fair review.
Our specialist BPO audit service is an annual audit of the client’s BPO partner operations or a one-off audit on the first anniversary of outsourcing as part of post-implementation review or final act in a change programme.
The first anniversary audit typically covers all aspects of the BPO operation and relationship including performance, accountabilities, contract, service levels, records, procedures, business continuity plans and relationship management. Subsequent audits can be scaled back to cover specific aspects of the BPO operations and contract.
Accounting Standards Manual
Our services include production and promulgation of your Revenue Accounting Manual via a cloud- based application. The aim is to enable everyone involved to better understand the process and their role within it, to have clear guidelines for the performance of their job and a quick reference for queries.
We provide a co-ordinating and quality control role where we define the scope, index, standard and template for your team to produce the content, or we draft the content for your approval. Once promulgated the manual is handed over to your team for maintenance.
The manual will typically include policies, standards, responsibilities, authorities, operating procedures, data definitions, process and systems overviews and glossary of terms.
This is a one-off service for airlines seeking to improve process transparency and management.
We facilitate the establishment of performance measures and standards for RA linked to the overall business objectives. These can be for all participants or be limited to the central team undertaking the core processing. Once the measures are defined and agreed, we design, implement and handover a system for monitoring and reporting the status of core processes and cycle performance.
We offer a unique service for airlines wishing to adopt a holistic approach to managing their RA cycle in order to maintain RA standards and achieve performance targets. This is an extension of the one-off process measurement design service.
We maintain performance measures linked to the overall business objectives of the cycle and performance standards for all participants, whether sales and service delivery teams providing inputs or the central in-house or BPO team undertaking the core processing. This provides the airline client with complete transparency of network-wide conformance and a basis to drive improvements.
Management information on the process, including performance trends and actual vs. target, is provided via a dashboard using our own business intelligence software application built using MIK. A monthly report includes commentary on processing issues and the status of ongoing projects.
Management & Development
We offer a unique service for airlines that have outsourced RA and no longer have the internal expertise to manage the BPO service provider and develop the process as business grows and needs change. We ensure that BPO service levels are appropriate and independently monitor SLA performance and processing status using our own software application. This element incorporates our process management service.
In addition, we manage PRA projects on behalf of the client within an agreed governance structure, working with the BPO partner and the client to deliver continuous process improvement and ensure cost-effective and timely process and system changes in response to changing business needs.
The service is also ideal for airlines that are not receiving the anticipated benefits from their BPO service provider but do not have the option of taking the function back in-house.
Revenue Reporting & Analytics
Our revenue information review service is a strategic review of the delivery and use of historic revenue information for financial reporting and performance management. This includes information needs required for key management decisions, information gaps, data quality, timeliness, relevance, accessibility, consistency, data model and data sources.
Our Revenue Reporting and Analysis services is a RA system neutral and multi-source revenue analytics application built using MIK, deployed via the internet and provided through or JV partner Entalis.
The application provides multi-dimensional analysis of historic revenue streams and associated KPI for managing performance of revenue management, sales areas, sales channels, flights, products, routes and business segments. Compares performance with budget and previous year and identifies the effect of changes in capacity, loads, exchange rates and yields so that management can better understand the causes of variance and take appropriate action.
An extension of the revenue analysis application that includes the ability to produce and compare revenue budgets and forecasts. Can also include revenue accruals for incomplete processing where this feature is not part of the core PRA system.
Our process management training is for management and supervising teams and is aimed at developing skill and knowledge that can be put into practice in RA.
The training starts with the purpose and objectives of RA and covers the internal service chain, participant co-ordination, process and data quality measurement, target setting and procedures.
Our review service on passenger revenue integrity covers booking audits, fare audits and fraud management to assess revenue leakage risk, exposure and the efficacy of existing prevention and recovery systems.
Our review service on cargo revenue integrity focuses on pricing and billing processes and procedures to assess risk of abuse, exposure to revenue leakage and the efficacy of existing consignment validation and tariff audit systems.
Our services for start-ups include the set-up of RA in readiness for the critical ‘on sale’ milestone and subsequent interim management of revenue accounting operations until the airline is ready to make a strategic decision and investment on this area of its business.
Services during the preparing for ‘On Sale’ phase cover the sourcing and implementing of the complete revenue cycle. Scope will depend on the airline business model and its choice of distribution and customer payment channels and will need to consider revenue streams, terms and conditions, card merchant contracts, credit policy and BSP participation for trade sales.
Interim management of the RA operation is undertaken via our JV partner Entalis using the cloud-based FlightARC application and MIK for revenue analytics. The service includes sales accounting, revenue recognition, receivables management, travel tax payables, account reconciliations and revenue reporting and analysis.