Driving Digital Transformation in Finance to Increase Revenue
Businesses are leveraging technology in novel ways to raise the bar in their customer engagement. It’s the era of digital transformation! And it’s re-writing the rules for companies seeking competitive advantage and growth.
According to RecVue’s research, digital transformation can mean new pricing models for subscription or consumption-based frameworks. Or it can mean creating new and innovative services and delivery options to meet continually rising customer expectations and demands for flexibility.
While CFOs are adopting customer centric recurring-revenue models, they are also quickly realizing that their legacy financial systems and manual spreadsheet-based processes are vastly overmatched by the complexity and volume of these new revenue models. As many as 80+ percent of companies have challenges such as revenue leakage, fragmented data, and manual processes and workarounds.
When the new revenue models associated with digital transformation take shape, they bring an exponentially greater level of complexity. One only compares the billing cycles of traditional one-time purchases with subscription/usage-based revenue models to see why CFOs are under increasing pressure to transform their monetization processes.
Instead of the standard, steady flow of one-time transactions, recurring revenue models introduce a range of variables, exceptions and adjustments that are time and data-intensive throughout the contract lifecycle such as: pause, restart, renew, adjust, upsell, cross-sell, upgrade/downgrade and more.
Some of the key challenges include:
HIGH GROWTH:Whether it’s through mergers, acquisitions, or organic growth, companies are adding product lines, entering new markets and creating new services at a rapid pace. All requiring a modern revenue-management infrastructure.
LEGACY AND CUSTOM SYSTEMS: These applications simply can’t keep up with the pace and complexity of new contracts and billing relationships.
LACK OF AUTOMATION: If every contract must be managed manually with all of its complexities and exceptions, finance quickly becomes the bottleneck.
DATA INTEGRATION: New revenue models often require consumption and usage data from other systems and sources.
SPREADSHEET HEADACHES: Relying on spreadsheets to process billing transactions inevitably leads to delays and errors.
VISIBILITY: Fragmented data prevents in-depth, timely analyses and forecasts.
In many organizations, revenue and billing processes are driven by “homegrown” custom-developed systems. These when expected to support the new recurring revenue models, only add further challenges for the enterprise like:
HIGHER COSTS: The design and development costs are substantial as you configure/adjust business processes, build in security, and ensure compliance. Then there are technology licenses, integration issues, support and maintenance costs, and updates from vendors.
LENGTHY TIME-TO-MARKET: When you’re creating innovative products and services and identifying high-potential markets, inflexible custom billing systems can hold your business back, resulting in lost opportunity and reduced market share.
COMPLIANCE COSTS (AND RISKS): The ASC-606 revenue recognition framework creates additional hurdles for finance teams saddled with homegrown systems. Nearly 90 percent of all organizations face challenges in obtaining the required data for financial disclosures.
LIMITED SCALABILITY, LIMITED ANALYSES: Different decision-makers and different teams need different data from usage-collection systems, ERPs, order-management systems contract repositories – even spreadsheets. That makes it difficult to generate timely insights across the organization.
To address these issues RecVue’s founders built the only enterprise monetization platform based on big data and powered by Oracle’s cloud infrastructure that helps global enterprises adopt and manage innovative business models to drive recurring revenue growth.
RecVue’s customers are mastering hybrid subscription and high-volume usage-based models with sophisticated pricing and rating scenarios, while gaining operational efficiencies, expanding footprint and exceeding their customer expectations. RecVue’s unique, unified platform integrates with the ERP and front-end order processing systems. CFO’s are selecting for the immediate benefits the platform offers including:
- Cuts Costs: Streamlined automated processes offer greater accuracy and faster invoicing
- Mitigates Risk: Detailed audit trail reduces errors
- Spurs Business Agility: Supports new pricing models and bundles and easily adapts to new business models
- Optimizes Revenue:Eliminates revenue leakage by identifying errors and scales with your business
What’s more RecVue’s customers are meeting their business and finance goals simply by adopting a smart monetization platform that helps them not only scale resources to meet business growth but also manage millions of billable transactions easily. These customers are also able to improve efficiencies across order to cash, revenue and general accounting while gaining real-time access to data at multiple levels: price/rate type, product, customer, contract. Automated contracts ensure that billing reflects the latest terms and conditions, such as CPI calculations and integrates usage data sources into the billing engine. Last, but not least, the finance functions are able to increase accuracy and timeliness of billing and invoicing and aggregate the billing information in a single system to improve analysis and forecasting. This is smart monetization, enabling your organization to drive digital transformation initiatives to support future growth.
Reach out to us today for a subscription billing and recurring revenue management assessment!