Many Businesses Face Hurdles in Shift to New Revenue Models

Aria Systems recently commissioned a survey to ask about the hurdles involved in adding recurring billing to legacy systems


The second finding relates to the current landscape and future direction of recurring billing. The data shows that many businesses are operating more than one billing solution. That’s not unusual, but it does point out an opportunity for those businesses to reduce costs through consolidation of their systems.

Most responding executives indicate a desire to move to cloud solutions for some or all of their billing. These businesses are looking for solutions that can support sophisticated consumption-based revenue models and flexible product catalogs. The cloud billing industry cut its teeth on subscriptions, but the data from the Gatepoint Research study seem to indicate an opportunity for providers who can prove the ability to support a wide variety of consumption-based use cases.

The fact that 80 percent of respondents in this survey are looking at the cloud points to the challenge for traditional software providers that don’t want to be left behind.

The third key finding relates to the growing complexity of business relationships. Forty-three percent of respondents listed channel/reseller management as a high-priority item. That response represents a growing trend and provides another challenge for billing providers. This is an area in which many businesses still rely on spreadsheets and the need for new systems is clearly evident.

The entrance to New York’s Natural History Museum features two impressive dinosaur skeletons—the finest that I have seen in my travels. One of the two on display, a raptor, looks ready to jump off the pedestal and devour the next busload of tourists coming through the entryway. Those dinosaurs are cool, but keep in mind, they’re also extinct. They couldn’t adapt to a changing environment and ended up as museum exhibits.

The marketplace is changing, too, with businesses reaching out to grab onto the benefits available in long-term recurring revenue relationships with their customers. For many companies, the highest hurdle in adapting to competitive changes is not the willingness to experiment with new revenue models. It’s the limitation of legacy billing systems designed for one-time transaction models.

Indeed, many businesses find they are stymied by old technology when making the shift to new revenue models. They want a flexible, cloud-based billing system with few limitations so that they can offer a mix of pricing and billing models.

For billing providers, it may be an adapt or die moment, as those with the most robust recurring revenue solutions have a distinct competitive advantage. Those that can’t adapt to this new reality may ultimately become museum pieces alongside those dinosaurs at New York’s Natural History Museum.

Bob Harden, a former director for global billing solutions at Experian, is a consultant and guest blogger at Aria Systems, which powers recurring revenue for the enterprise, enabling market expansion, improving customer relationships and providing more revenue predictability. He has nearly 30 years of experience as an IT professional in the healthcare and information services industries, including more than 15 years supporting billing and revenue processes. 

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