What’s stalling your recurring revenue business?

6 systemic issues at the root of every organization’s growth challenges

– Jim Martindale, CEO | NAVINT

For many organizations, the need to optimize front and back office operations—a process that we collectively refer to as lead-to-revenue operations—is becoming increasingly more important as companies shift to a recurring revenue model.

In a recurring revenue model, organizations must sell, serve, deliver and account in a unified way, with fully connected people, processes, technologies and systems, including CPQ, CLM, Billing, ERP, Licensing and Provisions. When these systems are not unified, friction occurs—both from the point of view of the business and the customer. The resulting issues, such as an onslaught of billing disputes or a slow month-end close, are obvious and urgent, prompting many organizations to take immediate action.

However, these pain points are often just the proverbial tip of the iceberg—surface level issues that foretell of deeper, more substantial challenges. It’s what’s underneath—operational inefficiencies and foundational shortcomings—that stymie growth, profitability and agility. For organizations that have embraced a recurring revenue model, this is where they must focus, transforming systems, processes and operations to unite the lead-to-revenue lifecycle.

The difference between treating symptoms and transforming systems

In order to effectively solve issues at the core level, companies must first differentiate between a surface-level challenge and a deeper systemic issue.

6 systemic issues that stall growth

  1. Inadequate and capability-deficient systems: Underlying systems investments that are not designed for a recurring revenue model and have components that do not provide frictionless expansion and renewals, which may erode the customer experience
  2. Siloed functions and operations: Disconnected processes and systems across the front and back office and/or processes and systems that are not organized around the customer
  3. Inflexible operations: Systems that lack agility due to gaps in technology or digital immaturity
  4. Lethargic system performance: Dated and inflexible systems that cannot accommodate modern business needs
  5. Go-to-market motion and packaging: Insufficiently defined processes and systems that cannot support a client-centric GTM strategy
  6. Inability to Scale: Cannot support the sheer volume of transactions that occur in a recurring revenue model

With this list in mind, it is possible to see how surface-level symptoms that erode the customer experience are often an outgrowth of systemic issues. In many cases these obvious challenges can also be traced back to specific inefficiencies, gaps or redundancies within the lead-to-revenue architecture—or an architecture that is not organized around the customer’s needs.

For example, a client who is experiencing an uptick in billing inquiries and disputes may have the instinct to solve this issue through a new billing tool. However, in looking at the graphic above, we can see that billing issues are a symptom of broader organizational challenges.

To truly solve this issue, the business must examine deeper issues and shortcomings within the lead-to-revenue cycle, asking questions such as:

  • What are customers disputing?
  • Why aren’t these needs being addressed through self-service channels?
  • Are existing tools and systems capable of adapting to serve this new need?
  • Can our product catalogue be simplified to alleviate or eliminate errors?

In this way, it is possible to trace the symptom back to deeper, systemic shortcomings, such as inflexible or siloed operations.

Technology alone is not the solution

Our experience tells us that technology alone will not solve a systemic issue or even a symptom. To be effective, the tool must be properly configured within the lead-to-revenue architecture, which takes careful and thoughtful planning. As such, there is no such thing as a quick fix, no matter how good a tool or technology may be. Further, it is generally impossible to effectively treat symptoms in isolation. Implementing a technology without addressing systemic issues in business process and proper change management, the same pain points will reappear over time and often spur new ones.

A closer look: The relationship between symptoms and systemic issues

In looking at the above graphic, it is also possible to see how one symptom, such as billing disputes, can possibly generate other issues or exacerbate underlying inefficiencies.

For example, many companies process billing disputes manually, which only adds to the core challenge of manual process overload. It may also prompt system customizations in order to automate processes, which may further hinder the overall efficiency of the system. All of this may require more manpower, which may increase headcount. Finally, the mere act of disputing a bill will erode customer satisfaction and loyalty, potentially leading to customer churn or revenue leakage.

Perhaps the good news is that many of the surface-level symptoms are a product of the same systemic shortcomings—meaning that solving underlying issues could help substantially clear multiple symptoms or better position the organization for progress.

Solving systemic issues through a connected lead-to-revenue architecture

What companies need to keep in mind is that systemic issues arise from gaps, redundancies and shortcomings within the lead-to-revenue architecture. Uniting people, processes and technologies across the front and back office will be the key to eliminating pain points within the recurring revenue model.

Key Considerations:

  • Start with strategy. Formulate a comprehensive strategy that will create value for the customer and enable recurring revenue growth. While technology will play a role in realizing this vision, the tools and systems are not the solution itself, but an enabler of the overarching strategy.
  • Establish customer lifetime value as the gold-star metric. Look beyond the initial sale and take a broader, long-term view of the customer relationship. This approach links sales and support with value creation— and constantly reevaluates how the strategy must change as a result of the customer’s evolving needs.
  • Create a connected lead-to-revenue architecture. Symptoms of a disconnected lead-to-revenue architecture may present differently, but the solution remains the same. A recurring revenue model requires businesses to unite processes, technologies and people to serve an ongoing, continuous customer relationship, as opposed to a traditional one-time transaction.
  • Maintain flexibility for the future. Organizations should design to meet their current needs while recognizing that those needs will change over time. The solution must be flexible and scalable, serving the needs of today and tomorrow.

Getting started with Navint’s Lead-to-Revenue Health Check

At Navint we work with clients to address challenges within the lead-to-revenue lifecycle not as isolated events, but as part of a connected architecture, uniting people, processes and technologies in service to the customer experience. Together, we focus on foundational elements of the business to create a comprehensive strategy that unlocks growth and operational efficiency across the front and back office.

In finding a solution to these challenges, it is important for each organization to understand their specific challenges within their lead-to-revenue operations and create customized solutions. Navint’s Lead-to-Revenue Health Check is an in-depth assessment that gauges the readiness and maturity of each organization’s business processes and digital capabilities, identifying opportunities for improvement and optimizing each investment within the lead-to-revenue architecture. Navint quickly evaluates the organization’s systems, tools, operations and people, identifying gaps and overlaps within the business—all while helping to prioritize next steps.

With Navint’s Lead-to-Revenue Health Check, your business can:

  • Identify and address gaps and barriers to the organization’s ideal future state
  • Develop the strategic foundation for your end-to-end lead-to-revenue transformation plan and roadmap
  • Guide future investment decisions, implementation options, optimization factors and other metrics critical to success

Learn how your organization can leverage Navint’s Lead-to-Revenue Health Check capabilities, including:

  • Customer & Internal Capability Report
  • Capability Framework across CPQ, CLM, Billing, ERP, Service Delivery and Business Architecture
  • Lead-to-Revenue Integration Success Services
  • Roadmap and Sequencing Services

Case Study 

How the world’s #1 job site transformed its enterprise architecture 

After experiencing a prolonged period of hyper growth, one of the world’s largest employment platforms was having trouble adding revenue lines, as well as closing the books at month end. While the organization could have focused on each of these issues in isolation, they realized the need to create a modern systems architecture that would serve current market needs and support future growth opportunities. 

As part of the engagement, Navint helped this organization design a future-state business system capable of serving the organization’s current user base of 200M visitors across 60+ countries. They also helped create a flexible foundation that accommodates rapidly changing business needs, including the addition of new geographies, products, revenue lines and business models. Finally, they helped the organization transform existing Finance and Revenue operations, using automation and business process integration to improve efficiency, optimize business processes and provide a foundation for future growth and scalability. 

Solution Components:

  • Visioning workshop
  • Business architecture assessment
  • Solution selection framework & scorecard
  • Financial systems implementation road map
  • Change management advisory services 

Conclusion

In the quest for revenue growth, some organizations may focus on solving operational or customer pain points as they arise. That instinct is correct—but as with so many things, it’s how the business goes about this process that could be the difference between a short-term fix and long-term growth opportunity. As discussed in this paper, we believe that focusing on foundational business systems and processes is the key to unlocking new levels of growth, profitability, resiliency and satisfaction.

Want to figure out what’s stalling your recurring revenue business? Contact Navint to learn more about how our Lead-to-Revenue Health Check can help your organization assess business readiness and optimize investments across your recurring revenue architecture. 

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