BluLogix

Revolutionizing Monetization

BluLogix - Revolutionizing B2B Monetization to Drive Growth

Billing and Monetization: What’s the Difference and Why Should You Care?

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Most people understand the basic concepts behind billing. It is the process of determining an amount owed for a product or service, informing customers about their total bill, and collecting payments. It is a straightforward process that technology has improved through online and automatic solutions that enhance accuracy. However, these technologies are tools that help; they do not transform how business is conducted. This transformation is monetization, and while it relates closely to billing, the overarching role is much broader.

What Is Billing?

Billing is defined as the process of generating invoices to recover payment from customers. Billing procedures can be simple or complex, depending on the goods and services delivered that require payment. They generally include collecting information needed to put together an invoice, creating the invoice itself, and sending the invoice to the customer. 

Billing software is a computer program that tracks billable products and services and automates the preparation of invoices or other documentation.

The takeaway: Billing is a business process that focuses on collecting transactional debts. Billing software is a tool to help this process along and can result in quicker payments and stronger cash flow.

What Is Monetization?

The definition of monetization from the Merriam Webster dictionary is utilizing “something of value as a source of profit.” Monetization means to generate revenue from a service or product your business provides. Where billing is about retrieving the payment from a customer, monetization is about a process through which your business turns a profit.

Monetization software is the technology platform that is one component of a business’s overall practice to generate revenue. It should bring a data-centric mentality to connect your various information sources, which helps create insight from that data to drive growth.

The takeaway: Monetization is a business discipline that goes beyond billing to understand what drives customer value and turn organizational expertise into revenue. It is a business model transformation that helps companies tap into new opportunities to impact customer loyalty and reduce churn. This transformative quality is the main difference between billing and monetization.

Billing vs. Monetization Today

Today’s digital economy has changed the way businesses work. The last decade has seen the concept of customer engagement rise in importance, and it now drives everything from customer service to the delivery of products and services.

Billing automation and process improvements may get more cash in the door, but they do not create an optimum environment for monetization. A monetization process touches a business’s core and is crucial for strategic growth. It leverages engagement with customers, prospects, and partners to help a business turn those relationships into profit-generating ones for an extended period of time. Contrast this with billing for a flat fee service relating to a one-time service or product provided to a customer, and it’s easy to see the benefit of a monetization relationship: it structures a relationship around ongoing revenue and service.

Businesses in the digital economy will be forced to reconcile their basic billing procedures with a new discipline for monetization – or they risk falling behind. Many businesses have already made the shift to embrace monetization, but it’s important to consider the short-term operational impacts of monetization before taking the leap. If you think you’re ready to explore how monetization can transform your business, check out this free PDF that explains the 10 most common organizational implications we at BluLogix have observed when working with clients as they shift to a monetization focus. 

If you’d like to get in touch with any questions you have about billing or monetization, don’t hesitate to reach out.

Laying a Foundation for Cisco Flex Plan Collaboration

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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.

Top 5 Reasons Agents Should be Rebilling

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Is the channel the right path to growth?

Many cloud service providers that achieve early success with a direct sales model quickly come to realize that if they want to reach their full growth potential, they will need to leverage indirect sales “channels” (VARs, MSPs, IT Solution Providers).

But pivoting to embrace the channel model is more operationally tricky than it first appears. Critical challenges arise because many aspects of the business, including business processes, the customer experience, and revenue cycles are optimized for a direct sales model. Therefore the “agent” model has evolved as the only viable channel option because it allows the indirect channel to get paid for sales, while the service provider achieves revenue growth with a minimal amount of business process or customer experience impact.

Unfortunately, for most VARs, MSPs and other IT Solution Providers, the traditional agent model can be a less than ideal scenario, when:

  • You are giving away customer relationships developed over years of successful partnership
  • You no longer have a revenue relationship with the customer
  • You can’t control your margins
  • Your top-line revenue drops through the floor
  • You only get paid well after everyone else gets their share

Luckily,  there is an alternative. BluLogix has partnered with AVANT to introduce an innovative offering that addresses these agent challenges head-on. AVANT and BluLogix now support “rebilling” for a network of more than a dozen – and growing –  top service providers.  In a rebilling scenario, the service providers’ customer experience (provisioning, onboarding, etc.) remains unchanged, but the VAR, MSP, or ITSP maintains customer ownership and is able to bill the customer for services directly.

Rebilling is a better solution for all parties involved.

  • Service providers can deliver the optimum customer experience for the service, have a competitive advantage with channel partners, reduce churn, and take advantage of increased upsell opportunities.
  • VARs, MSP, and ITSPs can retain ownership of the customer relationships they have worked hard to develop, recognize top-line revenue growth, and present a unified billing perspective to their customers.
  • Customers are more satisfied because they can retain their relationship with their trusted advisors for strategic and revenue-related or service issues.