By: Steve Terry, Navint Director, Subscription Revenue
Over the years we have served many organizations who struggle to move billing projects forward. Tactical billing projects don’t seem to make a dent in the billing problem. Big billing initiatives have a habit of moving too slowly, often failing to align cross-functional interests, schedules, and priorities. Last week the Navint Billing Practice was working through “case reviews” to address this issue, and here is our shorthand advice.
There are two root causes that hinder most billing initiatives. First, billing improvement projects are complex, and the details are critical. Collating and assessing all of these details is a major challenge. We find that major investment decisions struggle under management review when these details are not collated, assessed, and well understood. The second compounding issue is knowing just where to start and why. In almost every organization there are well known symptoms of failure in core billing processes for primary product lines. But are these the right places to focus new billing process and systems investments?
Maybe, maybe not.
We find that the most obviously broken processes relate to historical business practices that both providers and customers would rather move away from. For example, the natural inclination may be to target billing processes based on current pains with the highest billing volumes. However, the strategic significance of automating these processes might be minimal, and they will struggle to gain support.
The alternative is to address areas where sales, marketing, and service delivery are innovating with new methods of packaging to drive improved customer engagement, revenue growth, and profitability. If not addressed by billing initiatives these innovations result in one-off, broken billing processes that typically are manual and strain the interoperability of functions that are constantly in friction. While seemingly minor, the strategic significance and value to the overall business performance can be significant.
It’s worth taking a moment to understand your situation and decide your path appropriately. Here are four streams of activity that we have found to both address the required details while also breaking down functional barriers to setup an effective billing initiative:
1. Perform a thorough review of existing billing processes with special attention to upstream stakeholders and inputs to the billing process. Build a detailed understanding of both upstream and downstream requirements and information needs. Collate metrics. Nothing fancy, just understand the situation with some numbers.
2. Analyze the products and services that are being offered, specifically for how they are packaged (sold together), priced, and the subsequent billing methods employed. Create dialogue with sales, service delivery, and finance teams to collectively understand how things would be in an improved future state. The focus here should not just be on how the current processes are broken, but to examine what processes should exist in a target state. Leave room for ideation.
3. Create a target state reference architecture for billing systems and integrations that meet your business needs. Understand your priorities in terms of functional billing goals. Put this in context of a joined-up list with other processes such as quote-to-contract, service delivery, and accounting. Explore technology shortlists and refresh your team on what enablers are available and how they fit with your architecture. Don’t get stuck here, because step four will inform your choices. Break the decision deadlock.
4. Use quick-hit optimization projects as a method for executives and key employees to create a common understanding of how better billing can improve cross-functional outcomes. While the projects done may be tactical in nature and limited in technology spend, they should apply the reference architecture to confirm designs, build awareness of key design decisions, and make tool set decisions more robust. Include cross-functional stakeholders in the process as partners. Pay attention to improving integration points; building a cross-functional understanding of how mutual value is added from billing processes.
The road to clear ROI on billing projects is tough—building support with a full view of the business is critical. We often see clients who know they have billing problems and who also know they have a strategic pressure to innovate sales, customer experience, and pricing. The challenge is that they fail to align these goals around an effective billing improvement program. The above steps should help connect these dispersed considerations to get impactful billing initiatives off the ground.