Digital transformation strategy, customer expectation shifts, & more
7 min read
In a recent discussion, Conga’s Chief Marketing Officer, Randy Littleson, and Conga’s Chief Executive Officer and Culture Leader, Noel Goggin, talk about the complexity that comes with digital transformation. The following are key takeaways from that discussion.
4 concerns of companies as the revenue operations landscape changes
Randy asks: In your role, you have the opportunity to talk to lots of different companies. As you talk to executives at companies of all shapes and sizes in various industries, what do they share with you as their biggest revenue operation concerns today?
1. Macroeconomic events
Many customers are trying to cope with the pace of change when it comes to supporting revenue operations within their organization. This can be seen across many different areas, the first of which being macroeconomic events—the great resignation, supply chain issues, rising inflation, wars, etc. They have to deal with a lot more right now than they did in most recent years.
2. Protection of revenue and lifetime value of customer
Concerns for many companies center around responding to disruptive technologies and staying relevant. With innovative technologies and new companies coming in and disrupting the status quo, organizations must try to sustain their revenue growth while finding new revenue streams. These new companies coming into their sectors are very well funded—and they're not burdened with all the legacy of infrastructure and established ways of working with customers, etc. They're totally liberated from processes that might slow them down as they do for older, more established companies.
Noel says, “I would also say that a lot of them are struggling with the revenue models and new business models that are being introduced today. You know, historically there's been lots of traditional revenue models that are tried and tested. But every board is putting pressure on every organization to figure out what is the recurring revenue stream that they generate within their business today.”
The Software as a Service (SaaS) industry has led the way in this era of changing business models, with massive evaluations taking place in some of the largest software companies today to determine new go-to-market plans. Now there are many other ways to do recurring revenue streams, such as hardware as a service or transportation as a service. New business models must be tried, tested, vetted, and validated—and are very disruptive to a company that is not operating with a stay-ahead-of-the-game mindset.
3. Shifts in customer expectations
The third area of concern Noel sees is customer expectations. Customers today want less friction, more ease in purchasing products and services, more self-service options, and more end-to-end lifecycle integration capabilities, such as billing, invoicing, and renewals. That’s a tall order for established companies trying to work the complexities of revenue transformation into their organizations.
4. Getting the right people for the job
The fourth and last area of concern is acquiring talented team members. Companies are worried about bringing in individuals that best suit their organization and that are situated to be a part of the effort to get the company through this change in revenue management.
He suggests looking at the retail industry as an example of how digital transformation can change the whole landscape for these organizations.
Noel says, “In that change, there were lots of new entrants—the Amazons, the Alibaba's of the world. There were a lot of established players who shifted capital allocation from traditional buildings out of brick-and-mortar stores to digitally transforming their enterprises, like a Wal-Mart, Home Depot, or Nike, who have made huge strides in the last ten years. And there's been a bunch of managers who didn't invest, didn't move, didn't have the time to make that change—and are no longer with us.”
Revenue as a lifecycle
Randy asks Noel: Why is it important for companies to think of revenue as a lifecycle?
Noel suggests looking at revenue as the fuel used by your organization. Many of the concerns and problems to solve naturally present themselves in a lifecycle—How do I sell my products and services? How do I build my software for those products? How do we manage cash flow and customer SLAs? It’s an endless lifecycle of its own, and revenue as a lifecycle continues to evolve as business changes.
Another key reason to see revenue as a lifecycle is the maintenance of customer relationships and maximization of the customer lifetime value. Organizations must seek out ways to start maximizing the share of all the products and services they can generate from their customers over time. To fully accomplish this, it’s necessary to recognize the different personas that make up the lifecycle stages. From the people who are selling it, to the people building it, all the way to the people who are renewing it—everyone fits into the model of revenue as a lifecycle, it doesn’t just begin and end with purchasing.
You can also consider mergers and acquisitions as part of revenue as a lifecycle. When you have to acquire a new logo, when you move from direct sales to a more automated/self-service approach, or when you are looking to partners for certain segments of the business—all of these have multiple moving parts and a recurring nature to them. All of these individual elements of the business work together in creating a lifecycle for your business.
The many moving parts of revenue certainty
Randy proposes: What complexities are inherent in trying to get revenue certainty and predictability?
Here Noel reiterates how complexities brought on by the ever-changing nature of the revenue operations landscape contribute to an organization's path to revenue predictability. When you have a business that sells multiple products and revenue types, the path to operationalizing these internally is through a patchwork of fragmented, siloed manual processes, systems, and teams. Because of this, providing a seamless customer experience becomes a complex process.
In many cases, organizations operate without consolidated pricing and discounting. There’s no history of what products and services the customers had through one division or another. In addition, there’s a lot of complexity around contracting. Many contracts have legacy contracts, they have preexisting governing terms and conditions; and if they’re added to the company through a merger or acquisition, there could be multiple contracts with one customer.
Many organizations must wade through the additional intricacy of regulatory compliance and risk management associated with how they contract their customers. They must contend with staying current and compliant with data security rules, risk mitigation rules, payment rules, etc. Noel says, “There's a lot of complexity inherent to that, because they don't want to burden the little deals with all the complexity of the big deals. But they also want to make sure they have protection under big deals with the terms and conditions they need to have in the organization.”
If an organization manages to get through the consolidation of their products and services with their pricing models and contracting standards, the management and fulfillment of those products and services becomes even more complicated in the backend. Many of these areas tend to be locked in different enterprise resource planning (ERP) systems, different billing systems, or different order management systems. This makes it difficult to get a holistic view of what products or services the customer has at any given point in time.
Noel also emphasizes the importance of renewal and expansion. Thinking of this as part of the revenue lifecycle can add complexity, but it’s becoming more necessary as revenue models change. The ability to lay the groundwork so that an organization can go back and sell new products and services with new contract terms and conditions over the customer lifecycle is essential.
Finding your path to a new revenue lifecycle
Randy asks: So, I hear you describing a transformation mission for companies to really get to this revenue lifecycle with predictability and certainty. How do you recommend they get started?
Transformation can be very overwhelming for any organization, so Noel recommends approaching the transformation of your revenue lifecycle in a three-step process.
Start with the big picture of what you want to do in your business. So how can you automate the processes you have today within the definition of your revenue lifecycle?
Next, look at how you can start integrating those processes into the upstream and downstream systems. How can you build momentum within your organization by proving concrete, tangible deliverables that bring meaning to the business?
The last step is to bring more intelligence into the process so that your organization can start doing things from an automated/self-service environment. Think about what areas you can optimize so you can win more deals while increasing your deal size.
Noel also talks about the natural tendency to want to customize. “We want to replicate everything we've had in the past, and I would caution against that. The ability for people to implement standard, out-of-the-box products that have been proven to solve the problems that people are looking at will allow you to onboard people from the maintenance legacy.”
Many customers have so much knowledge within their existing contracts and being able to ingest those contracts, being able to extract key business terms—all of this provides a wealth of knowledge that can help organizations navigate and define how to drive better optimization in their revenue lifecycle management on a go-forward basis.
To learn more and get first-hand insights, watch the full video with Noel Goggin and CMO, Randy Littleson as they discuss the complexity that comes with digital transformation.
This blog post is an abbreviated version of the video that's been condensed and edited for readability.