It’s Time to Modernize Your Recurring Revenue Software
As monetization models and technology change, many enterprises struggle to stop revenue leakage, find new revenue opportunities, gain a competitive advantage, and keep their customers.
These challenges are tied directly to five universal enterprise monetization pain points:
- Billing Challenges
- Partner Compensation Management
- Revenue Recognition Compliance
- Disparate and Changing Data Sources
- People and Change Management
This blog will cover those challenges and share insights on how forward-thinking enterprises are addressing them.
Billing Challenge: What is the Right Billing Model for Your Enterprise?
A simple approach to defining a billing model is to answer two key questions:
- Where do we want to go?
- Who are we serving?
These two questions can help you define product plans, identify customer challenges, interpret your data, and then translate this into a billing model priced for growth and agility. The challenge lies in knowing what is right for your business today and in the future.
As you define your billing model, remember these core billing variables:
- Base Price: establish the starting point for your billing model
- Billing Frequency: what makes sense for your customers and your products
- Tiered, Usage-Based, Dynamic, or Hybrid Pricing: consider how people use your products now and how you want them to use them in the future
- Discounts, Promotions, Up-Sells, Trials: how can you incentivize your products to customers
- Payment Methods: who are you selling to and how do they like to pay
- Churn Rate: when do customers leave, why are they leaving, and how successful are you at retaining them
- Competitor Analysis: how can you use pricing to differentiate yourself and gain an advantage
One of the benefits of modern recurring billing software is data collection – but how do you make sense of this data? How do you build a pricing and billing model that takes advantage of your data without getting overwhelmed by your options?
Many enterprises find that a configurable and customizable solution is the best way to address your complex business models and requirements.
Partner Compensation - Making Sense of Complexity
Partner compensation and management are constant pain points for enterprises, particularly those with complicated products and multiple partners.
It requires that you have great insight into a variety of topics including:
- What do your partners want?
- How can you pay your partners?
- Can your existing billing solution execute these agreements?
- Can you offer and fulfill what your partners want?
- What is your level of complexity today and what will it be next year and five years from now?
Because of this, it is important to choose a solution designed with partner compensation, management, and complexity in mind. Your billing solution must address the challenges of multiple partners, a dynamic pricing model, evolving customer expectations, and remaining competitive in this new era of XaaS.
Your chosen solution must:
- Take advantage of integrated third-party service and product and partner management capabilities
- Enable agile management of revenue share models and partner compensation agreements with an attribute-based rules system
- Define rules to automatically calculate revenue for distributors, resellers, and other partners based on customer usage and consumption
- Create attribute-based rules for regional site and product variations when calculating payments
- Automate pay-side obligations, manage contract modifications and integrate with your payables ledger to record liabilities
A partner management and compensation system that helps you overcome the inherent complexity in your business ultimately saves you time and maximizes the potential of your partner channels.
Revenue Recognition - Streamline Compliance and Automate Revenue Recognition
Regulatory compliance with ASC 606, IFRS 15, and ASC 842 demands a new approach to revenue recognition and management. Manual processing and traditional ERP solutions simply do not work anymore.
Revenue recognition and compliance should not be a barrier to your growth and billing model options.
Choose a modern recurring billing software solution designed for:
- Comprehensive revenue recognition
- Complex contract revenue automation
- ASC 606, IFRS 15, and ASC 842 requirements
- Streamlined compliance
Implementing the right solution for revenue management ensures you focus on growth and stop worrying about compliance.
Disparate Data Sources - Real-Time Data Mediation
Do any of these statements sound familiar?
“So much data from so many devices out there. You need something that handles a lot of transactions.”
“But now, data is about more than usage. The deep range of data points means we have data on so many disparate pieces of information - it’s identifying what data matters and then determining what to do with it.”
“In the past things were simpler. We only had a few data sources and we managed everything in spreadsheets and we would do that using Tableau or Looker or something. We could manage it that way. And now we have all these different data sources and none of the applications or a few of the applications are able to bring it all in and make sense of it.”
This is just the tip of the iceberg when it comes to the real-world challenges of data mediation for modern enterprises. A modern, recurring billing software solution helps you collect data, but the next critical step is making sense of it.
Data collected from different sources and in different formats needs to be correctly converted, reviewed, and imported for billing purposes. This is the function of a data mediation layer. Your company’s overwhelming amount of usage data must be seamlessly converted to pricing, allowing you to give your customers a straightforward invoice and calculate revenue correctly. This is a must-have feature in any modern billing solution.
People - And Making Change Happen
Change is hard. People are hard-wired to do what they have always done. However, if we know one thing it’s that success in 2024 and beyond demands a new way of thinking.
Successful change happens when you take a step back and look at opportunities and challenges with a fresh perspective – searching beyond the traditional for solutions and potential.
New billing models. Data monetization. Personalization and customization. IoT. Recurring billing. XaaS. SaaS. The digital economy.
These were all born from change.
To help you move forward, you need a system that is designed to support, realize, and enable the change and transformation that keeps your enterprise relevant and competitive. Learn more by listening to a recent RecVue podcast with Mark Thomason, IDC’s Research Director of Digital Business Models and Monetization, for insights into how to put an end to your billing pain points.
Or, contact us today to schedule a consultation and see for yourself how RecVue is the modern recurring billing software that addresses billing pain points and helps you move forward.