The Digital Services Economy
We see it everywhere from one industry to another. What used to be products have now turned into services in many industry sectors. Devices have become an embedded part of the service, not a sold item. And what used to be a standard offering has now become both complex and variable. Is that good or bad news?
The Good and the Bad News
The good news is that companies willing and able to seize new service opportunities can profit from the digital economy. The bad news is that outdated pricing and billing capabilities will severely limit such initiatives. They will block growth, leak revenue and damage customer satisfaction to levels that may rapidly become fatal to the service provider concerned.
At Good Sign Solutions we're helping companies tackle the opportunities and thrive in the digital economy. Your customers are in the driving seat!
Customers Drive Billing
Product sales are converging into service contracts. Service contracts are increasingly diverging from yesterday’s simple models. As the digital revolution rolls out over all industry sectors, recurring revenue streams must move from static to adaptive.
Customers play a greater role in proactively choosing and activating the services they want. They need and expect personalized provision, tailored payment and consumption options, and even smart systems to tell them how to buy and be billed more advantageously. The expansion of their universe to cloud and mobile computing has taught them to expect fast, flexible solutions.
The Impact of the Internet of Things
Hot on the heels of conventional web-based services, such as cloud computing, is a new element that will further expand contract billing:
The Internet of Things (IoT) and automation through machine to machine (M2M) interactions are unimaginably rich in the potential for new services. They can range from expanding industrial process monitoring, to intelligent facilities management to connected cars.
50 Billion Opportunities
Forecasts suggest that 50 billion devices will be connected to the Internet of Things by 2020. I would suggest this means 50 billion service objects in the digital economy!
It is about connecting, maniging, sharing and monetizing.
New Battle Plans for Rapid Service Innovation
Faced with these possibilities and challenges, enterprises are drawing up new battle plans. Rapid service innovation is essential to successfully retain current customers and attract new ones.
Service contract billing systems must help the process, not hinder it. They must make positive contributions to enhancing the customer experience, while minimizing ongoing billing costs to the service provider. They must allow for managing complete service ecosystems and supply chains. They must also scale to meet projected demand.
A Blueprint for Better Service Billing
The right new generation service contract billing system is a key part of the service business design in the digital economy. The flexibility and scalability of the system help companies not only to manage new services, but to conceive them too. The system integrates with other resources in the enterprise to unify billing and ensure that data whether entered by employees, agents and customers only needs to be entered once. Visibility of contracts, invoicing and revenue recognition extends to cover the whole of the company from just one screen.
6 Signs: Find Out Where Your Company Stands
How can you know if your company is positioned to meet service billing requirements in the digital economy? Here are 6 warning signs that suggest improvement is necessary:
- You are selling with a one-time payment model when your bills could be recurring
- Launching innovative new services is limited by your systems not your ideas
- Billing lags service delivery keeping operating cash reserves high
- You are gathering billing data manually in MS Excel spreadsheets
- You have a team instead of a person responsible for handling chargebacks and billing
- You must split the bills according to customer cost centers or work order numbers manually
Justifying Inevitable Change
Any one of these indications could be enough to justify a change, because they all reveal a negative impact on your growth and profitability. Correcting them with a better service contract billing solution is the way towards making the challenges of the digital economy into service opportunities instead of threats.
In my work as CEO of Good Sign Solutions I've had the privilege to work with numerous companies - large and small - helping them utilise service automation on a new level. At Fujitsu, for example, transactions like billing used to take up a considerable amount of time and effort - feel free to see how efficiency was improved dramatically with our help.