Blulogix

Revolutionizing B2B Monetization

monetization

Process Automation vs Workflow

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How Process Automation Enables Scalability 

Building consistent and repeatable processes is a key challenge most companies face in their Digital Transformation. In fact, it is not possible in many cases to make a smooth, full transition without first addressing these processes. 

Addressing the process challenge typically falls across multiple organizational stakeholders, many of which have legacy systems in place they are not compelled to change. Therefore, effective process change must be driven from the top down if it is to be successful. 

In this post we’ll provide some clarity around two approaches to process change as it relates to digital transformation and three suggestions for how to implement these changes. 

Key Distinctions between Process Automation and Workflow 

In the journey toward digital transformation, it is important to understand the differences between process automation and workflow. Process automation is a bottom-up approach that starts at the elemental level of a product catalog where each product in the catalog carries business logic for provisioning or fulfillment. This ensures that when a product is ordered, either a manual or automated task initiates the movement of the product to an active status and triggers further automation throughout the activation process. 

Workflow, on the other hand, is a static sequence of tasks typically associated with a solution or service type order. If all orders fall into the same service type, the product catalog is limited, and there is low order volume, a workflow approach can satisfy the management of manual tasks to complete an order. But because the tasks are driven at the product level, automation of these tasks is never an option. For these reasons, workflows do not promise the same level of agility as process automation.  

The Problem with Workflow 

Many companies start by managing processes manually. As business grows, the hours turn to days and before you know it you have a team of people managing repetitive tasks that could easily be done using process automation solutions. Some businesses get so caught up in the day-to-day that they never stop to question whether this is the best allocation of resources. For example, rather than an entire team, BluIQ can manage these tasks 24 hours a day, 7 days a week with no vacation or sick time. 

Businesses who have pivoted to process automation have reaped the rewards. In a 2018 survey conducted on companies leveraging process automation tools, 42% of respondents said that they spend less than an hour a day on manual data entry. A BluLogix customer operating as Software Solution Provider recently reported that, “BluIQ brought a team of six full-time employees down to one part-time administrator.” 

Workflows relying on manual tasks will inevitably hold a business back. Replacing manual tasks with a process automation solution such as BluIQ enables businesses to free up valuable resources. This freeing up of resources creates scalability and profitability that cannot be achieved otherwise. Companies become free to reallocate assets from areas of tedious manual tasks to areas that promise growth and increased revenue.  

Process Automation: 3 Tips for Success 

So–you’re ready to replace manual workflows with process automation. What do you need to know as you take this step? Below are three tips for success based on our experience in helping companies transition to process automation. 

1. Make it a CEO priority 

In designing an automated process, multiple stakeholders across an organization can be affected. If stakeholders are not universally aligned throughout this shift, it becomes difficult to navigate the levels of changes involved in supporting process automation. In this regard, a step in every direction is a step in no direction. If a business is to successfully implement process automation in a way that’s consistent across an organization and accommodates the goals of each department, they’ll need a cohesive effort toward a clear direction. 

The good news is that there is a simple solution: making process automation the CEO’s priority. Process automation has to come from the top down, ensuring organizational goals are synchronized. While various departments within an organization can have independent objectives, it is the CEO who ultimately weaves those together with a comprehensive vision. As process automation can expedite that vision, the CEO must be involved in it’s implementation. 

2. Define a Single Process 

When converting to an automated process, it’s important to design for uniformity. You need to define a single process for all products and services to achieve success. You should identify core elements specific to products and services, and define your standards around the common denominator between them. Use variable data such as quantity, usage, service details, etc. as inputs into this process. A single process across all products and services allows you to remain agile in response to customer demands and industry trends without disturbing the underlying infrastructure.  

3. Create a System to Track Remaining Manual Tasks 

A key part of process automation is leveraging APIs to their fullest potential. Efficient process automation utilizes data integration from multiple API sources in a way that limits the need for manual intervention. Nevertheless, it doesn’t remove manual intervention entirely. 

In the aggregate, the need for manual tasks will be significantly reduced; however, you need to prepare for what remains. Manual tasks benefit from a system of accountability. Tracking manual tasks with notifications and standards of operation will help ensure that those manual tasks have continuity with automated tasks. 

BluIQ and Process Automation 

For businesses that want to scale in an environment where customers expect increasingly rapid responses to their needs, process automation is a necessity. Without process automation, a company’s growth is tethered to their ability to update the workflows of manual tasks as well as the time required to execute those tasks. 

If you want to be ahead of the curve, a process automation platform such as BluIQ is your solution. At BluLogix, we’ve helped companies across sectors such as SaaS, UCaaS, IoT and more replace outdated manual workflows with process automation through BluIQ. Part of what makes our methodology so successful is that we place a priority on front-end planning. Giving time to detailed discovery and planning phases allows BluLogix to create and implement a solution tailored to the unique needs of your business. 

Want to learn more about the power of BluIQ when it comes to process automation? Check out our Insights post covering Quote-to-Cash automation. If you’re ready to speak with a BluLogix process automation expert, schedule a demo today and we will be in touch. 

COVID-19 and your IT Management SaaS Channel

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The COVID-19 pandemic is driving revolutionary changes in the IT services marketplace. To excel in this changing environment, IT Management SaaS providers will need to offload operations to their channel in order to meet demand.

IT Decision Makers

A new survey by Aruba, of 2400 IT Decision Makers, illustrates some surprising changes brought on by the COVID Pandemic. IT decision-makers see the need to adjust their investment plans to accommodate new realities in the post-pandemic workplace including more home office environments and distributed workforces.

In light of these changes, many IT leaders are shifting to consumption or subscription models. For SaaS companies, the most important prediction in the Aruba survey is for 41% growth of SaaS subscriptions by IT leaders in the next 12 to 24 months in response to business challenges driven by COVID-19.

The Aruba report, entitled Preparing for the post pandemic workplace: How IT decision-makers are responding to COVID-19 has some surprising findings, including:

  • Only 8% of IT Decision Makers said they would continue IT Capex investments
  • 55% said they would explore “as-a-service” solutions for either hardware or software.
  • 53% say they will explore a managed service for a turnkey hardware/software solution.

It concludes that: “After months in which the nature of how we work has fundamentally altered, it is unlikely that the workplace will ever be the same again.” 

The Impact For SaaS Businesses

This data suggests that financial flexibility will be an important buying criterion for IT infrastructure in the next 12 to 24 months and beyond.  There will be a shift away from Capex investments and toward more predictable spending that can be closely controlled as business operations expand or contract.

Overall, this will lead to a reduction in upfront capital investments, in favor of “as a service” models that carry lower adoption and usage risks over time.

Today, 24% of IT Decision Makers consume half of the IT solutions ‘as-a-service’.  After the pandemic, the growth of hybrid workplaces will drive the consumption of ‘as-a-service’ solutions to 72% over the next 12 to 24 months, according to the survey.

Boon or Bust?

For IT ‘as-a-service’ companies, the market opportunity could be great, but many Software/Hardware as-a-service providers simply are not prepared to manage this level of business acceleration.  There are two primary constraints, where I see critical capabilities are missing:

  1. The ability to dynamically adapt product and pricing plans to align with market demand and leverage the value added capabilities of a channel.
  2. An advanced reseller sales channel, where partners take on more of the operational burden for support, quoting, order management, and billing.

Agents vs Resellers.

The common approach to leveraging “as-a-service” channels for SaaS has been a standard agent partner approach.  Companies simply leverage the channel for sales opportunities and pay a commission to agents for selling the deal. 

The agent model has worked for solution providers because a large part of their customer experience, including overhead tasks like managing upgrades, configuring and provisioning new services, and reporting, are managed in the solution provider portal.

Some companies have attempted to sell SaaS using a reseller model instead, by enabling their partners to manage upgrades and other tasks. But the complexity and difficulty of replicating the solution provider portal experience, while maintaining some level integration is difficult for resellers. It requires significant investments in time and resources for what ends up as an inferior customer experience.

A New Reseller Model

In light of today’s quickly changing workplace, solution providers must be able to push more management to the channel to meet demand.  While solution providers’ early attempts to use a reseller model have ultimately failed, there is a next-generation approach beginning to gain traction among partners and distributors of SaaS.

Although partner communities will never be able to adequately replicate the solution provider’s portal experience, some providers are finding that they can hand off the billing and collections responsibility to their partners.  This is a win/win for everyone.  The solution provider off-loads processes that are expensive to manage, while the partner gains top-line revenue and more customer ownership.

Benefits for Providers and Resellers

In this new model, the partner can manage their own service catalog and package the solution provider’s products and services with their own products and services to simplify the customer’s sales experience. This also enables resellers to deliver more value to the customer and differentiate against competitors. 

This next-generation partner-reseller model will also drive more sales for solution providers by leveraging the channel to differentiate products and services with new, partner-enabled value. Resellers will be empowered to expand their reach into local markets with direct sellers. This will enable them to decrease churn and increase upgrade opportunities leveraging local partner relationships.

In this model, the solution provider continues to deliver their own customer experience as customers interact directly with the solution provider portal to manage and maintain their subscriptions to solution provider products and services.

Enabling Technologies

B2B Subscription Billing platforms can help solution providers and resellers manage their shared responsibilities for billing and collections. A subscription billing platform enables companies to build a system of record they can share through integrations between their CRM and ERP systems.

These platforms can be configured to work with most mainstream business software, and platforms like BluLogix have “out of the box” integrations with CRM solutions like Salesforce, which will enable cross-platform integrations across the entire Salesforce ecosystem.

CPQ Software, What to Know Before You Buy

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CPQ or “Configure Price Quote” software enables sales organizations to Standardize and Automate their quoting processes to build velocity, scale, and efficiency. 

Standardizing applies to everything from your product catalog, pricing, and contract terms to approvals for the sales you make. By reducing customization in your sales process, standardization shrinks time to market, shortens sales cycles, and prevents lost profit margins.

Automating, in the context of CPQ, is applied to the full quote-to-cash process, so every handoff, submission, and approval can be streamlined. By automating every step in the cycle you ensure that quotes are consistently created and accurately converted to orders. End to end automation ensures that charging rules are quickly and correctly applied, every time.

Who Should Use CPQ?

The CPQ process is most beneficial in complex, technical sales, where it is a powerful tool for configuring deals, driving consistency, and building a winning sales machine. However, the best application of CPQ is for those B2B companies, who leverage CPQ software to streamline their sales process for complex B2B subscriptions.

  • When selling to businesses, you need to configure multiple scenarios and tailor your service model to appeal to them.
  • B2B customers often need service across multiple locations and billing in different (or even multiple) currencies.
  • Businesses often negotiate their payment and contract terms, which must then be built into your monetization process.

Filling the Gaps and Building Scale

Compared to manual processes, or attempting to create capabilities in your existing solution stack, a CPQ solution has many advantages. If your company faces a challenge with speed, consistency, and accuracy in your sales model, a dedicated CPQ sales solution outperforms other options and may be your best choice.

Your Options

Many companies attempt to address gaps in legacy processes with the tools they have on-hand, but these don’t scale or don’t provide the flexibility you need.

  • Applying manual processes via spreadsheets or word documents is one common approach, but these tools are labor-intensive, inefficient, and present a nightmare scenario for tracking, reporting, and record-keeping.
  • Your existing CRM or ERP systems do better on automation and efficiency, but these come up short too. They simply are not effective as a system of record for your standardized product catalog, and they lack flexibility for supporting complex pricing plan options.

The first step in moving to a CPQ model is to define your Standardized Service Catalog.

Building A Standardized Service Catalog

For many, the first (and biggest) challenge for moving to a CPQ model is transitioning to a standardized service catalog. Making this change will help drive your business toward an efficient and predictable sales process, but making this move requires you to re-think the ways your sales process works today.

To start evaluating your current process, I recommend asking yourself these Seven key questions about your sales model.

Seven Key Questions

  1. What Do We Sell? – What are our current offerings?
  1. What is Our Revenue Cycle? – Do we sell by product? – by service offering? What commonality and complexity exists now in our current product portfolio monetization?
  1. How Complex is Our Revenue Process? – Would it be considered as simple or complex for our market and as compared to our competitors?
  1. Where is Our Opportunity? – Does opportunity exist in the current market? What are the key drivers of future opportunities? How does market opportunity tie to strategic goals and monetization objectives?
  1. What is New and Upcoming? – What new products and services are currently planned? How will these offerings be monetized?
  1. Where are Our Operations Falling Short? – Are there customer needs that we now cannot meet because of operational issues?
  1. What Environmental Impacts Do We See? – Are external industry trends or regulatory changes creating business imperatives for our organization or customers?  How will this affect monetization, if at all?

The answers to these 7 questions should be captured and documented and used to drive a serious evaluation of your sales process. You’ll need these insights to plan your CPQ implementation, and they will help you define your company’s Monetization Framework.

Integrating CPQ into Your Monetization Framework

Because a CPQ touches on broader considerations, which span the entire quote-to-cash process, it’s important to plan your CPQ implementation within the framework of how your company monetizes customer interest.

Making a CPQ decision without considering its place in this larger ecosystem can create siloed processes that constrain your company’s ability to scale… and should be avoided.

That’s one reason I recommend building a complete end-to-end Monetization Framework, before making any CPQ decision. Planning your monetization framework first, will help you define the full process before implementing your software tools. This planning provides insight that will help you make the right decisions when choosing and implementing CPQ software.

CPQ Decision Checklist

You should gather specific research to help understand outcomes. Here is a checklist of items you should create in preparation and have available as you begin planning:

  • A current product catalog with inventory and pricing information
  • A current services catalog with provider and pricing information
  • A list of product or service attributes that must be tracked for billing or provisioning
  • Documentation of all pricing use cases
  • Tables of your products and pricing, including discount schemes
  • Lists of bundled items or packaged components and their pricing formulas
  • Historical sales and net profit by product or service line
  • Documentation of your strategic planning and market positioning

These are critical elements, having these answers at your fingertips will prevent disruptive delays to your implementation while your team tracks down these details. You will be able to move forward with facts and details, instead of relying on guesses and overviews. This detailed orientation is crucial to getting the most from your CPQ implementation.

The complexity of B2B Monetization

The complexity of B2B Monetization is something you should not under-estimate.  CPQ, as a key process within your monetization strategy, can help you build a strategic advantage to help outperform your competition. Here is a quote from MGI Research that states this well:

“The demand for custom pricing models and flexible terms is counter balanced by the challenges of delivering these capabilities at scale.  Across most key world economies, the number and complexity of regulatory and audit requirements are mounting while the timeframes to reach compliance are getting shorter. Against this rapidly accelerating backdrop, product innovation and revenue optimization are the critical levers for growth and profitability. In the face of these opportunities are threats. Progressive organizations are focusing on the key processes and new monetization tools to sharpen their edge.”

As CPQ software continues to penetrate the market, you should plan carefully around the decisions you make, to ensure that you do not box yourself in. A well-conceived CPQ solution will help your company remain flexible and adaptable, so you can meet your customers’ needs and win new opportunities.

By making your sales process faster, consistent, and responsive, driving your monetization model through a CPQ software tool helps your company serve your customers and build a sustainable competitive advantage.

B2B Subscription Billing & Pricing Strategies

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Three Price Plan Strategies to Align Billing with Customer Value

I recently purchased a new car, and the sales rep was very effective at distracting me from what I was paying for the car by focusing on a monthly payment I would be comfortable with. The whole experience reminded me of the ways tech companies use subscription models to offer their services – and the strategies they use to ‘sell’ them.

Billing Vs “Price”

What your customer pays for your offering and how you bill them are often different. To maximize revenue and sustain renewals, companies need to monetize service offerings in ways that match the value their customers receive. Mismatching customer value against the prices you charge risks slow sales and low renewal rates on the one hand and under-valuing your service on the other. That’s why it’s critical to use a strategic Monetization Framework when selling your services.

Your Monetization Framework 

Having a well thought through product and service portfolio are critical parts of Creating a Monetization Framework for Your Business. Leading companies recognize that a one-size-fits-all subscription model limits your reach. Having multiple price plans that support the differing ways individual customers might choose to purchase your offerings gives you the opportunity to connect with more customers.

From a strategic viewpoint, you may want to consider the following three pricing strategies. Each can help improve alignment between value and how your customers pay you. 

Using one, or a combination of these strategies can position your services to appeal to a wider set of use scenarios and broaden your potential customer base. Doing so can also result in lowering churn, improving margins, and creating a path to future upsell opportunities.

1. The Fixed Price Model 

The main advantage of fixed price subscriptions is that they are simple to implement and simple for your customers to understand. They are also easy to quantify and easy to bill. 

The downside of fixed-price plans is that they may leave money on the table by not charging incrementally for customers that may be willing to pay more as they consume more of a particular feature. Fixed-price plans also don’t scale up very well to larger customers because they nominally have to be tailored to fit a theoretical “average” customer in both performance and pricing.

Here’s one example of a simplified Fixed-Price subscription pricing model.

Example: Fixed Price Plan for Subscription Billing

2. Tiered Pricing Models 

Tiered price plans measure subscribers’ consumption of key service features and provide buyers the option to purchase at an entry-level for basic, low volume service. Buyers willing to commit to higher volume consumption can earn significant unit discounts by committing to more use during their subscription period. 

Buyers enter this model with the understanding that the price per unit decreases with the commitment to pay for the use of more. In some tiering plans, the customer pays an overage, if they consume more than their plan maximum. An alternative model just automatically upgrades (and upsells) the customer to the next tier when their consumption exceeds their current plan.

Here’s an example of a company’s Tiered-Price subscription model.

Example: Tiered Pricing Model for subscription billing

3. Consumption Pricing Models 

Consumption pricing, or “metered billing” is a pricing model that counts the number of units a subscriber consumes and charges periodic fees based on a pre-defined billing rate. Subscription fees are calculated from the subscriber’s actual consumption by using a rate table to calculate the charges within a given billing period.  

Consumption billing is often combined with tiered or fixed billing, so the subscriber pays a base subscription rate for access with a consumption component added to account for actual use..

A Rate Table used in Consumption Pricing

Example: Consumption, Metered Price Model for subscription billing

The Right Model For Your Business 

You may find one of these models, or a combination of price plans helps your business to capture more opportunities. It is also important to point out that Business-To-Business (B2B) transactions are very different from Business-To-Consumer (B2C) sales. Some primary examples of this difference are that B2B billing transactions can occur across multiple users, locations, and cost centers and require a monthly invoice in order to pay you.

The Visibility Challenge

By choosing anything but a simple Fixed-Price model, you increase the risk of billing friction. If you bill for consumption (whether through tiered pricing or consumption pricing models), your monthly invoices need to include detailed billing at all levels. If you don’t provide this visibility at the invoice level, you increase your chances of billing disputes and dissatisfied customers. 

The risk here is that moving to a more-complex billing model may have solved one problem, by aligning your price with customer value, only to create a new problem of unclear billing that creates more overhead and dissatisfaction than anticipated.

Solving Visibility Challenges

B2B recurring revenue works best when the buyer and seller can participate together in defining and monitoring the monetization process, and this is particularly true with complex billing models. Visibility is a key enabler of this, and one method that can be very effective is to make consumption details visible to customers in real-time via a shared consumption record. 

There are tools in the market, including The BluLogix BluIQ platform that were designed to serve this purpose and can help prevent customer billing disputes as your company implements a tiered or consumption billing model,

Providing visibility and ensuring that your billing matches your customers’ expectations can prevent a lot of dissatisfaction. Providing your customers with ongoing records that match (and ideally drive) their billing can go a long way toward preventing billing misunderstandings and reducing subscriber friction.

BEYOND SUBSCRIPTION BILLING – WHY DOES MONETIZATION MATTER IN THE SUBSCRIPTION ECONOMY?

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There’s little dispute that digital transformation has affected nearly every aspect of B2B commercial activity. Success in the digital economy requires that organizations move beyond traditional ways of doing business while accelerating market-facing responsiveness across all functional areas. Increased competitive pressures and shifting market dynamics complicate revenue predictability.

Therefore, the ultimate measure of effectiveness will be how efficiently and accurately organizational expertise is translated into products and services that generate market demand and drive profitable revenue growth. In other words, organizations in the digital economy have no choice but to become monetization-focused.

 In real terms this means businesses must hone or develop skills related to:

  1. Identifying what customer’s value and aligning new offerings to meet these demands
  2. Expanding organizational awareness of monetization activities beyond the finance, accounting, and billing departments
  3. Creating an organizational “monetization mindset.”
  4. Articulating and implementing new business practices that cross operating areas
  5. Leveraging the economics of the digital marketplace to create new product and service offerings
  6. Optimizing sales and customer engagement strategies to capture recurring revenue opportunities throughout the customer lifecycle versus “milestone” billing events
  7. Evaluating existing business processes, resources, data flow, systems, and to create an optimum environment for monetization activity

Next Steps:

Draft The Framework

Once your organization has completed the review of your key operations, processes, systems, and activities – as outlined above – the organization will have the necessary information to create a draft Monetization Framework. You can download the BluLogix template for a Monetization Framework from our website or create an outline that works for you organization to compile your findings.

Organizational Buy-In & Kick-Off

Once the initial Framework is drafted, the Monetization Champion should circulate the documentation for internal review and discussion to ensure that it reflects the input and concerns of key stakeholders. Once the appropriate input is solicited and incorporated the project should move into the subsequent phases of implementation and change management. With your Monetization Framework as a guiding document, the organization will be well-positioned to develop monetization as a core business discipline and impact strategic objectives.

DIY or Get Help?

The effort related to the development of a Monetization Framework should not be underestimated. Therefore, it’s worth considering whether or not to engage an external monetization authority to help with facilitation and development of the Monetization Framework.

External facilitation can help keep a project on track from a focus and bandwidth perspective. External facilitation also injects third-party objectivity into the process and may spur fresh thinking about challenges and issues. A third-party may also be able to spot potential pitfalls, while also offering benchmark data and anecdotal case studies about the monetization initiatives of other organizations.

Scaling Monetization Globally

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MGI Research estimates that amongst digitally‐focused US‐based businesses attempting a first‐time global expansion, nearly 70% either fail or experience meaningful delays and cost overruns.

BluLogix global customers are challenged with many issues addressed in MGI’s latest report “How to Scale Monetization Globally”. Global Monetization in the digital economy is very different than a traditional international business model. This is especially true with SaaS and IoT Companies moving to a subscription model.

The driving criteria for success for our global customers in an awareness of the issues that don’t typically existing in other models. One good example is the fact that a Company may not be able to control what Country a buyer originates from.

How do you then manage to stay in compliance local tax laws and other regulations related to doing commerce in that country? In what currency are you going to transact the business, using what payment method?

Globalization is huge opportunity for growth and can be navigated but not without right technology solutions that enable automation at the transaction level.

To download a complementary copy of MGI’s “How to Scale Monetization Globally” report click here. To understand how BluLogix can help contact us here to speak to an expert.