Dominic Smith explores the latest trends in agile billing development and explains why billing solutions are no longer the preserve of the back office, but are now at the forefront of business innovation.
Once upon a time in business, billing was a function carried out by the ‘back office’. It was one of the final stages to be implemented when all the other elements of a business model were in place.
Now, as industry analyst Andrew Dailey, of MGI Research says in his article for Forbes magazine
, “billing and monetization processes and solutions are becoming critical ingredients enabling corporate innovation”.
Agility is perhaps becoming a rather overused word in business, but it is undoubtedly a key factor in the survival of companies both large and small in the current hyper-competitive business environment.
In a previous blog, I explored some of the difficulties that the big energy companies had with poor management of complex billing system transformations
To have the capability to be responsive to the market and to customers’ needs is vital, and in our increasingly fast-paced and enterprising business climate, timing is all. Being able to monetise your products or services and implement an agile billing model is crucial to companies launching new subscription and pay-per-use offerings because an outdated billing system can substantially impact on your time to market – time in which a competitor may overtake you.
Dailey says research has shown that over 65% of new product trials have either been delayed or scaled back because inflexible, outdated billing systems caused a bottle-neck.
Accuracy isn’t enough
Up until recently, most companies set up and evaluated their billing processes in terms of billing accuracy and cash collection, but with shrinking business cycles, legacy billing systems and manual, spreadsheet-based processes are simply no longer an option for many companies. So agile billing development is becoming increasingly attractive as organisations see that agile billing types can benefit both them and their clients.
Agile billing development is so much more than subscription management though. As Dailey says, agile billing can be defined as “business, product, and IT agility”. In the past, companies were forced to invest huge amounts of money in sophisticated billing systems that took IT specialists many months or even years to create and implement. Any changes would then have to be made by those same, expensive consultants and overall, such systems were only available to the biggest and wealthiest organisations.
What can agile billing systems offer?
Now, agile billing software such as Cerillion Skyline
can offer smaller and medium-sized businesses the same flexible recurring billing
and financial management tools
as any multi-national behemoth. And for any company, it has some distinctly attractive benefits, including:
- Ability to quickly launch new products and services
- Automating billing, payment and renewal processes
- Access to new market segments with a mix of usage-based (pay-per-use) and subscription pricing models
- Offering customers a choice of payment methods, including automated online methods such as credit card, direct debit/ACH and PayPal
- Providing customers more flexible payment terms by spreading the cost of big ticket items over a number of billing periods
- Real-time visibility of key business metrics such as monthly recurring revenue (MRR), enrolments and churn
This is particularly appropriate to the enterprise software industry as it evolves to “as a service” (SaaS) cloud-based software
. Although agile billing doesn’t automatically mean that it’s cloud-based it’s not surprising that most agile solutions are
being built in the cloud because of the lower costs and ease of implementation/use. In MGI Research’s survey, 76% of cloud infrastructure companies and 83% of software as a service businesses indicated they have opted for agile cloud-billing systems.
In a rapidly changing business world, one of the few certainties, as they say, is change. Companies must create products and prices that will change, and with market leaders using pricing as a point of differentiation, those products and prices will have to continue to change and adapt to whatever the market conditions might be. Billing platforms therefore need to keep pace.
Cashing in on the Internet of Things
As the Internet of Things (IoT Billing
) hits the mainstream, and if Gartner’s research is even close to being accurate, by 2020 there will be over 20 billion connected devices capable of communicating and exchanging data. The ability of organisations to embed this intelligence into a product and then offer incremental services based on the data coming off the product, will require ever more sophisticated ways to monetise that data.
So, billing systems have well and truly left the back office and are increasingly the point at which the company’s product, pricing, and customer relationship data then determines its operational course.