Historically, progressive businesses — the businesses that want to get ahead — are constantly evolving their business models in order to increase revenue, build and strengthen their customer bases, and grow their market share. And that’s especially true in today’s uncertain economy; for many companies, innovation is no longer about growth but about survival.

However, the impact of even the most innovative business models and offerings are limited by one key criteria: whether the business has laid the foundation for agility with a billing system that can quickly and efficiently roll out these new products, services, and pricing models. More and more, customers are demanding consumption-driven pricing options for the products and services they pay for, and businesses are eager to oblige with subscription-based and pay-as-you-go offerings. But for many, legacy billing technology is slowing — or even halting — the process changes businesses need to implement in order to roll out these new models.

In our latest e-book, the Gotransverse team breaks down consumers’ new pricing demands, the limitations of legacy pricing technology, and the power of agile billing solutions to drive innovation. We hope you’ll download the e-book for the full story, but here’s a sneak peek:

The Move to Subscription-Based and Recurring Revenue

Subscriptions, once primarily reserved for software and magazines, is taking off across every industry, with businesses offering their goods and services in a recurring model where customers pay periodically for the baseline offering and then augment with consumption-based add-ons. Direct-to-consumer sales (from subscription startups like Quip, the Dollar Shave Club, Ipsy, Home Chef, Barkbox, and more) are growing in popularity as well, increasing the demand for these innovative models.

These models have become so popular, in fact, that CFO reports that 53 percent of organizations indicated that 40 percent of their revenue was recurring, and a survey from Manifesto Growth Architects found that 70 percent of businesses believe recurring revenue and subscription revenue models are the key to commercial growth.

And yet, for too many companies, the shift to these in-demand models is much easier said than done.

The Limitations of Legacy Pricing Technology

Despite the promising statistics above, CFO also reports that, of the businesses with recurring revenue models, 48 percent struggle with accounting and reporting issues. And those are just some of the many issues businesses encounter when they’re working with legacy systems that aren’t designed to support modern billing needs.

While legacy ERP and accounting systems are well-equipped to handle simple billing and revenue recognition needs, as volume and complexity grow, they begin to buckle. Additionally, the rigidity of these software systems makes it difficult to modify or add products and services without leading to SKU proliferation and a logistical circus. As a result, changes can take significant time to implement, and they often require the businesses to invest in Subject Matter Experts (SMEs) to manage pricing, increasing the cost and complexity of introducing new products and pricing models.

Ultimately what this means is that, when businesses are relying on these legacy systems to keep them current, the maintenance and upgrade costs (not to mention the opportunity costs) significantly decrease potential revenue and increase management requirements. And, with all the extra time required making changes, it’s all but impossible to stay ahead of customer demands.

The Solution: Agile Monetization

Organizations looking to overcome the limitations of their legacy financial and billing systems would do well to adopt a SaaS platform that that can accommodate various pricing and billing models (and keep them organized in a flexible product catalog that doesn’t rely on individual SKUs), change quickly to support evolving processes, and integrate seamlessly with other business systems and workflows.

The right agile monetization system will automate pricing and billing strategies, allowing business executives to adapt pricing as needed without requiring engineers to modify back-office billing systems. Here are just a few of the many things that makes possible:

  • Test new models and revenue strategies easily.
  • Shorten time to market, and eliminate the need for costly SMEs.
  • Track real-time usage for accurate billing.
  • Change of pricing on the fly, as often as you want.

Outmoded billing and financial software can’t keep pace with new business models, and the companies that are looking to get — and stay — ahead will abandon their legacy systems in favor of models that will support rather than impede growth. The key to agility in business is maintaining the ability to experiment with new business offerings. And the right SaaS billing platform enables companies to do just that and more.

To learn more about the power of agile billing to drive innovation, download our free e-book today. Then, when you’re ready, we invite you to request a demo in order to learn whether the Gotransverse platform is the right choice for your organization.