Capital expenditure models are shifting to operating expenditure models for information technology solutions. In response to this shift, Cisco Partners are focusing on building and managing annuity revenues for their organizations. Selling Cisco’s Flex Plan Collaboration is a significant step toward delivering on the goal of building a business model where both customers and partners benefit from a consumption pricing model.
Another step for Cisco Partners, moving in this direction, is the ability to combine and bundle their Flex Plan offers with other offers. These offers include managed services or telecommunications network connectivity, like SIP and SD-WAN.
Bundling multiple services into a single offer creates additional value that translates into additional revenue and margins for the Partner. Doing so, however, creates operational challenges with quoting, ordering and billing, or what BluLogix calls “Monetization”.
When delivering a quote to the customer, the expectation is that all relevant products and services will be on a single quote. The ability to combine multiple services from multiple service providers, on a single quote, often requires a solution for pricing and quoting outside of the service provider portal.
A quote should be easily converted to an order. The act of converting a quote to an order should trigger a set of automated and manual tasks ultimately leading to provisioning or fulfillment of the order. Tasks are be pre-defined based on the product ordered. They often require some dependency to take an order from a pending status to an active status. BluLogix calls this “Process Automation and Orchestration”. Once an order is fulfilled and active it is in a proper state for billing.
BluLogix recommends service provider delivered services, like Cisco Flex Plan, use a “rebilling” process. Rebilling is the ability to take the Cisco Flex Plan invoice, read it electronically, adjust the price, and generate an invoice to the customer in the exact same format.
Collaboration solutions often require multiple services from multiple service providers. In this case invoice data for rebilling must be mediated into a single record. Pricing is applied to the invoice as if it were a single transaction. For example: A Webex Calling Flex Plan charge combined with a DID, Usages (international & toll free) and a hardware as a service fee.
Billing for partner driven charges is enabled from a separate service catalog. These charges are delivered on the same invoice and managed by the partner. This catalog includes additional products and services that are both recurring, like managed services, and non-recurring or one-time charges like hardware or implementation fees.
There is significant operational value to the “Monetization” process defined above. BluLogix customers demonstrate a 75% reduction in resource utilization with BluLogix quote to cash process. “Rebilling” alone eliminates the almost impossible task of replicating the billing logic from multiple service providers. It also eliminates the need to reconcile what you are billing your customers versus what you are getting billed for from the service provider. Additionally, the ability to store costs and revenue with each transaction enables accurate profit analysis at the customer, product and service provider levels.
As Cisco Partners begin to build their businesses around the annuity-based Cisco Flex Plan offers it is important to lay the proper foundation to scale operations as business accelerates. At BluLogix we often work with Partners who developed a process over time using a combination of existing systems and spreadsheets. While this may work temporarily, undoing this process creates a significant change management challenge. The fact that these processes are often spread across multiple stakeholders (sales, finance, operations, IT) reduces the chances of success for the change management process that must occur for partners to scale.
BluLogix recommends a discovery process driven by one of our analysts to define a single repeatable process for every service being offered by every service provider the partner is representing. Cisco Flex Plan Collaboration is the perfect place to start in laying your foundation for future annuity revenues.
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