Pitfalls to Avoid When Automating Complex Monetization Processes | Gotransverse

I recently had the opportunity to participate in a webinar with Ted Brookbank, Senior Vice President at ATG. We discussed how product and pricing strategies are evolving and how they’re impacting finance professionals, especially those that are responsible for managing their companies’ revenue streams.

Our conversation focused on how enterprises of all shapes sized in all industries are struggling with the monetization of their offerings in the new “as a service” world we are living in. Ted shared great examples of pitfalls to avoid and key strategies that work when approaching a monetization streamlining project, including what not to automate and who to involve. I talked about how an enterprise go-to-market strategy affects revenue and why it is essential that finance plays a role in developing new market offerings to ensure they can properly translate this into the company’s performance metrics (such as revenue, bookings, etc).

Don’t Automate a Bad Process

Ted has worked with a variety of global enterprises that wanted to more deeply integrate their billing and monetization processes. According to Ted, one of the WORST things you can do is automate a bad process!

Often while implementing a large enterprise-level automation project, he has discovered that existing processes hinder innovation rather than encouraging it. When working with his clients, Ted finds they must sometimes reinvent a process top-to-bottom. His best advice is “don’t automate a bad process."

Involve Line-Level Stakeholders

Another key element to successfully reinventing your billing process is to ensure that the correct stakeholders are involved from the very beginning. Oftentimes upper management is removed from daily process details with which line-level stakeholder are intimately familiar. "Companies say they want to streamline, but often when you come to the front lines, its not that simple,” says Ted.

Mike Murphy

When automating monetization and billing processes, you must contend with complex issues such as ramp-up billing and annual commits. The revenue recognition that goes with them is challenging. Including key stakeholders from every functional area is critical to have full visibility into potential opportunities for automating revenue and billing processes.

Revenue and Billing

In terms of revenue recognition, it all starts with defining your offerings and determining how you intend to go-to-market. What are you selling? Will you be delivering a physical product? Are there services included? What are contracting terms? Are you selling direct or through a partner? Etc...

In order to scale your revenue generation process, you must clearly understand your offer and its effects on revenues and cash. If you don’t do that on the front end (or worse you never define your offerings at all), you will spend a lot of time on the backend trying to figure out the revenue treatment. The results will likely lead to disappointing earnings or worse. The new revenue recognition standards that are set to become effective at the end of this year require financial professionals to exercise considerable judgement in making accounting decisions. Having a clearly documented and automated quote-to-cash process will provide you with the confidence to make those judgments and to test those judgements with key stakeholders like executive management as well as auditors.

It’s Just a Bill

"Why do I need a billing system?"

According to Ted, his clients often confuse invoicing as billing. Invoicing is one small part of billing, but billing is actually the monetization of products and services. There are so many other functions a system performs to monetize offerings besides simply generating an invoice.

The world is getting more sophisticated; you can’t simply send an invoice with a single line item. Customers expect self-service visibility into their services before you even generate an invoice. They expect access to view pending charges, details of service consumption as well as usage. Having that data available to B2B customers is especially crucial.

Billing is Key Touchpoint

With SaaS and recurring revenue models, robust billing systems enable you to have a much deeper relationship with your customers including usage history and service consumption. Having visibility into how your customers’ use your solution provides you with real time data to help refine your offerings and maximize value to your customers as well as the bottom line. Monitoring customer usage levels also will provide you with early signals that they are not using your solution or are at risk to abandon.

To hear more of our conversation, you can register to watch the recorded webinar, When Good Bookings Go Bad: Tales from the Billing Dark Side. If you have any questions, or want to share your own billing tale, please comment below or reach out on Twitter or LinkedIn!