4 Predictions for 2017: A Shift from Billing Systems to Monetization Platforms
In 2016, MGI Research made a bold statement - that Quote-to-Cash is Dead. To see real improvement in salesforce productivity, customer churn, revenue leakage, and compliance, a more comprehensive approach to monetization and the processes supporting it is an imperative.
Agility in the ability to repackage, re-price and deliver existing services as well as the need to rapidly develop and monetize new offerings will bring traditionally separate functions like Marketing, Sales, Support and Finance together around a continuous cycle of Product Development, Sales, Delivery, Billing and Customer Care. This will require Monetization Platforms that can seamlessly support all of these functions to bring new products to market faster than ever before.
The traditional biller that simply collects usage, processes subscriptions, rates, invoices and applies payments will be replaced by an integrated, Monetization Platform that plays well with the extended cloud ecosystem and offers critical features like CPQ and Revenue Recognition. The ultimate Monetization System will feature advanced platform tools that allow it to quickly morph and adapt to support entirely new business functions aligned with an ever-evolving monetization process.
In 2017, companies that have survived on cobbling together solutions that were “good enough” will finally be making the step towards implementing transformational, cloud-based solutions that drive competitive advantage.
1. Cloud will transition from an option to a requirement in the monetization space
There was a time when companies only wanted to move functions - like CRM - that were not deemed mission-critical to the cloud. That time has passed. The global market has validated that cloud-based solutions provide superior, more cost-effective, and arguably more secure choices for companies looking to update their legacy systems. Legacy ERP, billing, and a variety of other operational systems are actively migrating to the cloud. 2017 is the year where cloud will become the standard. The time has come where most business and consumer applications are delivered via the cloud creating a mass migration that was once motivated by cost and convenience that is now motivated by quality as most innovations in software applications are now focused on the cloud delivery model.
2. Billing will become a front-office function
In 2017 there will be demand for monetization platforms that elegantly unite billing with marketing, sales, operations, and financial reporting. Features like Product Modeling, Advanced Packaging and rating, as well as CPQ and Revenue Recognition bundled with core billing are moving billing out from behind the back office to allow for a more agile, connected and fluid Marketing-to-Cash - or as MGI puts it, P2D - process.
Companies’ that need to rapidly model and implement new product and pricing models can’t afford to wait until the implementation phase to discover whether or not new initiatives can be monetized using disconnected billing applications. Product development and price modeling will start in the biller or “Monetization Platform” where new products and services are developed; feed into built-in, rules-based CPQ; are monetized using an array of flexible invoicing and payment features; and accounted for according to customizable revenue recognition rules.
The Monetization platforms of 2017 will move into the front office because they will support the entire product lifecycle from inception to delivery to accounting making companies more agile in an aggressive and competitive global economy.
3. Everything will need to be connected
2017 will continue to accelerate the need for speed that has dominated the global economy for the past decade. Interconnectivity of applications and data provides the seamless, and continuous cycle of product-development, delivery, and reinvention that underscores the new competitive landscape.
These new, efficient, and global operations can’t exist without completely connected and gracefully orchestrated systems. Slow, long-winded CPQ, invoicing, closing, and delivery processes will be eliminated through the automation and information access achieved through a holistic, interconnected environment primarily accessed via the world wide web.
In 2017, demand for ‘Billing Systems’ will begin to fade as the need for end-to-end ‘Monetization Platforms’ grows in response to an evolving consumer and competitive landscape.
4. “The Subscription Economy” will evolve beyond simple flat-rate Subscriptions
For years, some of the newcomers in “billing” have touted the advent of the Subscription Economy. On a positive note, it created awareness, made the market more tangible, and helped to bring meaningful use cases to bear. But the simplistic notion that companies can flip a switch and “Go Subscription”, or that any company (or customer) would choose to make everything subscription-based is unrealistic.
True monetization platforms provide flexibility to manage a variety of consumption models and don’t require multiple solutions behind the scenes. Equally important is the ability to evolve these models quickly and easily through clicks vs. code to create competitive advantage.
The predictions above reflect the increasing gravity associated with innovations in technology and networks and the associated impact on consumers and the global economy. 2017 continues the need for business information systems to respond in real-time to accommodate broad shifts in technology and consumer behaviors happening at an ever increasing pace.
The traditional Billing System no longer has a place in this new and evolving world as the demand for agility in business and associated systems requires a new, agile business machine that connects people, functions, process and customers with a fluid, efficient and continuous cycle of prospect-to-disclosure. The goal of the new Monetization Platform in 2017 is to ultimately drive technology and consumer behaviors in order to define the market instead of merely responding to them in a latent attempt to retain relevance.