Gotransverse
on
May 07, 2015
Billing vendors manage snowflakes. From a distance, the customers look similar. But up close, every single company is unique.
ReThink Billing Summit was held last Wednesday, April 29th. Filled with vendors, customers, investors and a few prospects, the content was surprisingly rich and agnostic.
1. Billing as strategic and disruptive imperative
Bye-bye relegation to the back-office. In today’s customer-centric economy, billing is a key moment of truth. It can elevate or sink a customer relationship. It’s no longer a stand-alone discipline of finance, but touches many different systems and directly impacts time-to-revenue.
Companies are re-inventing how they go-to-market. Examples sited at ReThink Billing include Audi approaching San Franciscan building owners to offer pools of Audi cars residents can rent as a service and DHL/FedEx delivering packages to the trunk of cars for frequent travelers. These innovative offerings are creatively capturing revenue from previously untapped opportunities.
2. Don’t waste resources on building it
Abobe, Atlassian, Netgear and Ethoca have very smart engineers. But the resounding themes of their case studies were how they decided to choose an outside vendor to handle their product catalogs, orders and billing, rather than attempting to develop solutions in-house.
Why? Each executive said clearly that the brains of the company needed to be focused on competitive differentiators, not technology available in market. In each case, customization and API calls into/from their existing infrastructure and business operations were essential to moving forward with vendors.
3. The future is uncertain
According to Joshua Bloom of Simon-Kucher the average tenure of CIOs is 3 years. While I’ve not validated this with other industry research, it is an indicator that technical executives churn as fast as sales and marketing.
This means technical decision makers are mostly interested in 1) closing the deal with the vendor of choice and 2) clean implementations. Long-term value, savings or revenue growth are still important, but carry less weight when faced with shortening tenures.
4. Billing vendors “don’t do” revenue recognition?!
A surprising theme occurring throughout the conference was the limited revenue recognition capabilities of vendors expressed by several companies featured on stage. Ironically, this is my company’s strength.
Mike Murphy, Chief Business Officer of Gotransverse, was able to share his point of view on this subject. “Revenue recognition is not black and white. They [the new standards] are not going to tell you how to account for it. Your go-to-market strategy will be the blueprint for how you recognize revenue, and your financial leaders must have a seat at this table. In a usage or pay-as-you-go economy, billing vendors can no longer relegate revenue recognition to the ERP system.”
Only time will tell if billing gets completely out of the back office. Those companies who can look beyond the old paradigms will disrupt entire markets and emerge as winners.