New Models, New Pricing, New Billing?
Todays’ innovation pace is faster than ever before in history. That is reflected in the record time time-to-market cycles for products and services all around the world. On top of this, we have recently seen a pricing revolution following the as-a-service, pay-per-use and, subscription economy.
How do you keep up with your competitor from an operations point of view as a finance executive? In this blog, we discuss an unexpected bottleneck in your rollout: the billing system.
Pricing Strategies And Billing Execution
After reviewing cost, the final pricing is generally an outward-looking function: what does the competition do, how would our clients like to pay for our product and services?
Adopting new pricing models is an impactful, strategic decision. Yet, research shows that over 65% of new product (1) or pricing initiatives have been delayed or forced to narrow the scope of their programs due to inflexible, outdated billing systems tied to legacy ERP systems.
Billing should not be the bottleneck but rather the enabler of quick time to market.
Leveraging Existing Data At a Detail Level
Pricing experts suggest various pricing strategies, all with specific impact and tailored to your products and services. However, they all start by looking inside: what historical data do we have to find potential revenue leakages or opportunities to create value (2)?
Your billing system plays a crucial role in retrieving this data. Being able to attribute activities to invoice data, analyzing cash flow based on invoice data are just examples of pointers towards a good pricing strategy. You will find it at a detailed level in your contract and billing history.
Preparing For New Business Propositions
Adding new contract and pricing propositions to the billing software is often more cumbersome than expected, simply because your billing system was never built for it. Traditional billing systems were optimized for few processes, and developed way before per-use or per-outcome propositions were in vogue. So, an early health check of your new contract allows your operations and finance teams to dance along when the time is ready.
Agile Billing As A Key Predictor For Pricing Success
Modern Agile billing systems, like Good Sign, can adjust to any new pricing or product proposition, and also predict the monetization of your new model based on the billing triggers set against the contract.
As such, they will help you find new opportunities and validate them based on your existing business. They can also help you smooth the transition to new models for existing clients if you choose to do so.
Take Us To The Test!
If you feel your innovation strategy has outgrown your current billing solution, or if you are just curious to learn how Good Sign does things differently, feel free to take us to the test! We will gladly take on your challenge and prove to you it can be done, and that the new world lies beyond just subscriptions.