“In an increasingly competitive marketplace, maximizing operating agility and shortening time-to-market are essential to compete. However, more operations are finding that outdated back-end business systems, such as billing, are stifling front-end innovation.” - James Messer, Founder and CEO, Gotransverse in Forbes

As customer preferences evolve rapidly, companies that want to stay competitive are responsible for adapting their sales models accordingly. And lately, the already booming e-commerce, subscription, and consumption-based markets are growing exponentially as COVID-19 has consumers buying goods and services as needed, on-demand, and online like never before. We wrote in May about how the pandemic has spurred many businesses into a kind of hyper agility, implementing innovations that were meant to be years away or pivoting entirely in order to keep supporting their customers. And last month, Gotransverse founder and CEO James Messer wrote in Forbes about how, for many of the companies that find themselves unable to pivot, an outdated billing system is the number-one obstacle.

Messer warned that outdated back-end systems impede companies from implementing subscription, usage-based, and SaaS pricing models to support innovative product and service offerings— and that allowing a legacy system’s limits to dictate product strategy is a big mistake. He also shows how, by making billing a key part of development rather than simply a back-end operation, companies can build the agility they need into every step of the process.

(Read the full article here.)

How Legacy Billing Systems Impede Product Innovation

“Outdated back-office financials are not designed to handle agile billing, so it's harder to create the kinds of innovative offerings customers expect,” says Messer. “Older ERP and accounting systems aren't designed to support subscriptions, recurrence cycles, currencies, sophisticated discounting strategies and consumption-based services. These older systems inhibit companies from adapting their product and service mix to offerings that consumers want and expect.”

Legacy billing systems are often built as one-trick ponies — they can accommodate simple billing models at low volumes, but not much more than that. At least, not without significant time and effort from dedicated (and expensive) legacy system experts and subject-matter experts. Often, by the time the patchwork system is upgraded to handle the new needs, the market has already evolved again, leaving the business in the dust.

Why Billing Should Go Hand in Hand with Product Development

“One way to beat the problem,” says Messer, “is by jettisoning back-end billing and outsourcing.” Instead, he suggests, consider a SaaS billing system designed to integrate with your existing systems and workflows, making billing an integral part of the product development process. Here are three reasons this is a good idea:

• Easily test business models and offerings. An easily configurable billing platform allows you to test drive new usage-based and subscription models alongside new products, making efficient adjustments until it’s just right. And the same goes for offering bundles. When you can shift your billing models on a dime, you can experiment with the right combinations, value-adds, and pricing structures for your customers.
• Minimize time-to-market. When you have to stop to bring the billing platform up to speed, your time to market is dramatically increased, and you’re at risk of missing your window of opportunity altogether. Integrating billing into development allows for much shorter release schedules, giving your business an important competitive advantage.
• Cut product introduction costs. When billing is a seamless part of the development process, that eliminates the need to pay for additional staff or other resources needed to keep the legacy system functioning as it should. This money can be reallocated to more important things — like developing new products and services to continuously delight clients.

The Right System for the Job

To truly support agile monetization, says Messer, that legacy billing system has got to go. What savvy companies need is a cloud-based billing system that does two things: First, it allows for flexibility in product planning and launch by allowing for “what if” scenarios, rule-based rating, configurable product catalogs, etc. And second, it integrates seamlessly with existing systems and workflows — starting with your ERP and CRM — to automate everything from invoice generation to revenue recognition in one transparent, frictionless workflow. (Read Messer’s full article for a chance to see this in action.)

Of course, agile billing systems are not created equal. The Gotransverse platform is designed to improve internal processes, simplify complex operations, and drive exponential growth. To consider whether Gotransverse might be the right billing partner for your organization, we invite you to take a tour of the Gotransverse platform. When you’re ready, schedule your complimentary, personalized demo.