5 Reasons Why Homegrown Billing Systems Fail in Usage and Subscription Revenue Models

Businesses are shifting rapidly away from traditional pricing models and towards subscription and usage-based pricing. But they are becoming challenged on how to adequately address and scale their recurring billing and revenue management needs.

Some are trying to use their existing ERP systems; however, most ERPs weren’t designed to offer the flexible configurations required to adapt to evolving billing scenarios. Other organizations use internal IT resources to build their own solutions, often employing a mix of manual processes and error-prone spreadsheets.

The use of ERPs and homegrown billing solutions are creating massive risks to revenue growth. When compared to using modern, agile monetization platforms, these ‘work-arounds’ fail in five major ways:

Custom homegrown billing solutions cost more.
Developing a custom recurring billing solution requires a lot of IT fire power.

• Internal resources have to be redirected from other core enterprise priorities.
• On-going maintenance becomes a costly burden on the IT budget over time.
• Maintaining your solution may cost as much as developing it.

Homegrown billing solutions are less scalable.
Built to address immediate and mid-range billing and revenue management requirements, if rapid growth occurs, the homegrown billing solutions often lacks the scalability to support long-term business objectives.

Homegrown billing solutions require custom integration.
Most custom solutions also rely on custom integration between multiple systems such as the data warehouse and ERP system. This creates a system maintenance nightmare as any upgrades to any of the integrated systems will require the custom-built integrations to be modified, tested and re-certified.

Homegrown billing solutions lack critical functionality.
Often, initial development aims to support a specific product launch. Functionality is sacrificed in order to meet development deadlines. As time goes by, homegrown systems lack the comprehensive billing functionality needed, including:

• Tier pricing
• Commits
• Ramp ups
• Trial periods
• Pre-payments
• Adjustments
• Usage updates
• Credit and re-bills

Homegrown billing solutions lack analytical features.
In the digital economy, companies have to innovate, collaborate and learn more quickly in order to compete. Billing data is not just how an organization gets paid—it contains vital information about:

• Customer preferences
• Product trends
• Usage
• Customer churn
• Monthly Recurring Revenue
• And more

RecVue streamlines and simplifies subscription and usage-based billing while providing greater visibility into revenue streams and customer usage trends through analytics and reporting. Our technologically advanced monetization platform lets you capitalize on new business models without the compromises you’ve had to make in the past with your ERP and homegrown solutions.

Talk to one of our recurring revenue specialists today to learn how RecVue can help you grow your recurring revenue business.