The Brave New World of High-Tech Revenue Management
Is Holistic the Way to Go?
From music, to TV to software, cloud-based subscriptions are the norm today. Gartner estimates that by 2020, 80 percent of high-tech vendors will be selling subscription-based offerings. The days of large, up-front payments are on life support.
Buyers have overtaken the coveted control of the sales cycle that once belonged to vendors. Line-of-business leaders are typically now the primary decision makers, and today’s sales conversations are much more focused on how the seller will drive business outcomes and provide a return on investment. From a financial perspective, there are many advantages to subscription-based models, such as a consistent, recurring revenue stream that can ultimately provide a greater financial benefit.
We are seeing tech companies reeling from tighter technology lifecycles, increased solution complexities, and the B2B world’s demand for B2C omni-channel experiences. The margins pressure is on for precision in managing upstream commodity and component pricing, as well as downstream bidding and pricing management. Rebates and incentives must be nuanced enough to encourage supporting and extending the customer lifecycle. A Go-To-Market program’s visibility and end-to-end revenue management can help an organization exploit their program effectiveness.
Historically, managing a company’s channel programs and broader Go-to-Market infrastructure meant organizing programs and incentive types separately, with some interfaces between them. This multi-system approach impacted revenue and profitability with its own set of challenges, including:
- Complexity in reconciling data in each system
- Absence of a "single source of truth"
- Audit and compliance complexity
- Time spent connecting data sets to gain insights
- Current and future integration costs
- Lack of necessary market agility
By taking a broader, more holistic approach to end-to-end revenue management, organizations are gaining greater visibility into their programs’ effectiveness. They can more readily identify where to streamline their business processes, and can see the combined and individual results of their Go-to-Market programs. Manufacturers leveraging this data can identify the best programs for customer lifecycle effectiveness. Optimizing these programs via accurate, analytics-driven business intelligence will only serve to protect and spur their profitability and growth.