STRATEGIC GUIDANCE
Identifying the right technology to optimize your enterprise architecture
Authored by: Mike Mayer and Enrico Cosio
As customer demands fluctuate, monetization of services, technology, and enterprise architecture must also adapt in order to keep the business growing. In a legacy tech stack, this pace of change requires an incredible amount of development in ERP, CPQ, and billing systems. In addition, teams must sync up to test and release all at the same time. This means staffing more experts in these systems, more management, and more support headaches as legacy platforms are pushed to do more than they should. This leaves many companies lacking the agility they need to move fast and make changes.
In fact, a recent survey of big businesses found that only 20% of respondents felt that their enterprise architecture enabled faster innovation and time to market. The fact is, legacy systems simply weren’t built to support the scalability, agility, and customer centricity that modern businesses demand.
Evolving to become a modern business means redefining the fundamental relationships between companies and customers with ways of doing business that are better for people, better for companies, and ultimately better for the planet. To do this, you need:
- The right organizational structure that can orchestrate and optimize operations, roles, and initiatives for every monetization model.
- The right business model to unlock a subscriber-led growth model with customer lifetime value (CLV) at the center.
- The right technology to connect the enterprise architecture with enterprise-grade scale, speed, and security.
We’ve developed a roadmap for optimizing your organizational model with the Modern Business Works approach and we recently examined the keys to optimizing your business model for subscriber-led growth.
But how can you ensure your technology stack also supports your modern business goals and objectives?
Power complete quote-to-revenue processes
The market moves fast, and customer demands are constantly changing. In addition, subscribers expect everything to be synthesized, fast, and intuitive. To respond, companies need to go-to-market with new offerings and deploy new pricing, new packaging, and new promos in hours — not months. But rigid systems and legacy integrations are holding companies back.
Companies that introduce new monetization models tend to refrain from making wholesale changes to their tech stack due to the cost and effort required. Instead, they opt for layers of customizations that leave their systems fragile and prone to inefficiencies and redundancies. Or, they end up designing processes around the systems they have, which creates even more difficulties around automation and reporting.
Quote-to-revenue operations are the backbone of monetization strategies and to adapt to changing demands, finance teams need to streamline this entire process. It’s vital that your technology is able to scale for change and growth. Choose a monetization platform that will enable your business to launch any pricing model out of the box—from subscription to consumption to one-time transactions.
“Back in 2018, we were still having our clients fax us their credit card numbers, if you can imagine that. So we were on a very antiquated platform […] We needed a platform that understood where we were going, helping us get into the subscription economy and build a business model around a SaaS offering. We needed it to scale, but we needed it to deliver an optimal experience to our customers.”
– Megan Murray, CFO, eMoney
Enable scalability and agile operations
Many IT teams choose to build their own homegrown billing solution. But doing so can quickly become a burden on both engineering and IT teams, and cause negative downstream impacts to finance, marketing, and more—not to mention how it puts the brakes on business agility and innovation.
It’s impossible for any company to anticipate all future go-to-market needs. You may be able to build for what you need today, with engineering hard coding the system as a quick fix—but that prevents you from growing for tomorrow. What starts out as a “quick fix” can quickly morph into an engineering time suck, which pulls much-needed development resources from your core product into creating a billing system.
With engineers struggling to keep up with new requirements as your business matures, this will obviously negatively impact your time to market. Why have engineers focusing on internal IT when they could—and should—be focusing on the core product? Hard-coding recurring pricing into your solution hinders business agility. It also offers just a fraction of the capabilities you’ll need to grow your business.
Without an enterprise-grade solution, modern businesses impede their own agility and inadvertently jeopardize long-term customer experience, financial accuracy, and revenue compliance. Modern enterprise architecture should enable IT and engineering teams to bridge connections between quoting and commerce to tax and payment gateways, and easily ensure every integration is updated as the business evolves. This is a huge shift in mindset from legacy systems where integration was cast as something to be avoided. In this modern landscape, work that would previously have been heavy ERP or CRM customization shifts to systems and platforms designed to orchestrate it.
Leverage data to drive informed decisions
Legacy systems can’t keep pace with changing customer expectations and disconnects in systems can lead to a lack of intelligence about customers and missed opportunities. This disconnected nature of legacy technology stacks is a direct impediment to meeting the needs of the modern subscriber, who expects that every company can deliver offers directly in line with their interests.
Accurate, actionable insights are essential to providing a seamless customer experience. Companies like The New York Times use subscriber activity analysis to help prioritize the product features that drive the most engagement and retention. By continually focusing on customer lifetime value (CLV) and delivering relevant experiences to each subscriber, you generate more interactions and increase the likelihood that the subscriber will commit again.
In addition to CLV, it’s vital that your technology is able to measure and track other key metrics, such as ARR, ARPA, churn, consumption metering, NRR, average selling price, standalone selling price. All this feeds back into a powerful data flywheel that you can place at the heart of your transformative growth strategy, a perpetual motion machine that creates greater and greater CLV. Subscribers use the product, you learn about the subscriber, you make an offer that you know is valuable to the subscriber, and you repeat the cycle.
The better you know your customers, the better you can personalize your product, give customers tips for getting the most value out of their subscriptions, and effectively target customers with complementary offerings.
Today’s business environment demands the rationalization of IT infrastructure and integrations to be coupled with tools which are easy for users to pick up quickly. Look for a solution that provides or integrates with a central data warehouse, along with reporting and analytics tools. By bringing together data across the organization, you can have a 360 degree view of your customer and spot macro trends to drive your decisions.
“If we’re able to harness the data we do have, using some predictive analytics, we’ll actually provide some recommendations back to a customer that says, ‘Based on your investing style or your investing goals, maybe there’s a subscription that might be better suited for you.’ And we see that as our opportunity to unlock greater value.”
– Kevin Schuller, VP of Financial Systems, MarketWise Solutions
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Know and nurture subscribers
Legacy systems were not built with the subscriber in mind and they often slow down or prevent innovation and business growth.
Modern technology is where changing subscriber demands intersect with business innovation, meaning the subscriber must be at the center of your enterprise architecture. Across industries, companies are expanding their digital offerings to establish and nurture subscriber relationships. To drive conversion, grow upsells, and increase revenue, modern businesses need to have a deep understanding of their subscribers in order to present targeted offers at the right time along a subscriber journey.
Creating a modern business enterprise architecture rarely requires undergoing a costly “rip and replace” effort. The key to getting the “right” architecture in place starts with designing process flows that support the customer experience a company wants to deliver and its business priorities. Once those processes are in place, and new capabilities are identified, then new technology should be evaluated and incorporated to drive the transformation.
Learning about each subscriber, making targeted offers, and rapidly optimizing through experimentation creates a flywheel that drives customer lifetime value (CLV). We call this perpetual motion machine subscriber-led growth (SLG).
Low-code and no-code technologies are a non-negotiable piece of the modern stack, allowing business users to adapt products, pricing, and more to accommodate changing customer needs.
“We want to provide our subscribers with the most meaningful, tailored news [and] deepest passion exploration. Because those daily habits create a connection. And those connections become essential and essential, authentic connections drive success.”
– Ken Houseman, VP of Product Management, The New York Times
Make globally compliant operations possible
As modern businesses adapt to managing multiple charge models, contracts, regional requirements and customer needs, the risk of falling out of compliance with corporate policy or regulatory requirements increases. In order to mitigate this risk, companies are using technology to create closed-loop data systems that automate financial controls, ensure quality controls, and relay any errors detected. These systems not only drive more efficiency but also reduce the risk of human error by removing manual tasks.
Running a global business and keeping up with compliance do not have to be mutually exclusive. It is possible to meet regulatory requirements, adhere to corporate policies, and mitigate risk. With the right technology and tools for security, compliance, architecture, and global business management, businesses can remain compliant globally across all markets.
Conclusion
To grow and scale into a modern business, you need the right technology and optimized enterprise architecture practices. Reduce IT headaches and embed financial systems in any channel with agile, future-focused tools to monetize complete quote-to-revenue processes.
Zuora is the leading Monetization Platform for any company with a customer-centric business model. Expanding beyond the typical order-to-cash process, our product suite powers the complete order-to-revenue monetization life cycle, from pricing and billing, to payments, collections, and revenue recognition.
Zuora Platform gives CIOs and IT leaders peace of mind with performance, auditing, and world-class enterprise security that reduce financial and operational risk.
One-size-fits-all approaches to subscriptions no longer work. To curate a customer-centric business model and retain subscribers, companies must develop strategies and implement the technology that can support these initiatives. Zephr is the world’s first subscriber-led growth engine.
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