Cloud Billing as Subscription Commerce Strategy

As companies host more and more of their services through different web-based, Software-as-a-Service (SaaS) platforms, one service that has fallen under the radar is billing. Generally thought of as a low value-add, back-office activity, billing is more strategic than you might think. With the market continuing to shift toward recurring revenue business models—such as online, subscription based offerings—billing not only needs to enable innovative, new billing and invoicing requirements, but must also directly track and support customer interactions at multiple touch points throughout the subscriber lifecycle.

The importance of billing grows significantly when businesses move from a traditional point-in-time transaction to a subscription business model. At this point, the customer (or subscriber) will interact with a business several times over the course of a “sale.” The billing system must manage all of the touch points and seamlessly bring together front-and-back-office capabilities including:

Customer Acquisition: Typically front-office applications such as ecommerce sites that help build your web-based presence so customers can register and purchase products.

Service Activation: Back-office solutions that manage customer entitlement and activation.

Usage Tracking: Back-office capabilities to track, measure and associate costs with usage.

Invoicing and Statements: Traditional billing component of bill calculation, which includes applying the appropriate taxes, cross-checking entitlement information with customer charges, generating statements, processing payments and updating account balances while complying with PCI requirements.

Customer Care: Front-office activities such as customer support require visibility into a customer’s history and the ability to answer any payment questions or handle any service issues.

Analytics: Front-office access to, and visibility of, business activity including usage trends, purchases and customer makeup, and the ability to leverage predictive analytics to optimize pricing and packaging.

Navigating these different touch points, however, is no easy task and requires a comprehensive billing platform that manages these capabilities and associated processes. Effective process management can remove manual actions, saving time, reducing (human) errors and, when automated, significantly improving results. Flexibility is also key as, in addition to integrating with the various front-and-back-office systems, a subscription billing solution needs to support multiple types of calculations and different monetization strategies.

Given the breadth and depth of these subscription commerce requirements, businesses are increasingly turning to cloud-based billing solutions. According to IDC, the cloud billing market is currently growing at an annual rate of 63 percent. Consider the many advantages of a cloud platform vs. a traditional, “on premise” solution:

  • Accelerated time to market, launching and iterating your offerings at much higher velocities;
  • Scalability to grow or expand with a business as it adds or changes products and/or services; and geographies;
  • Ability to benefit from continual software updates with no system downtime;
  • Faster deployment of new features and functions;
  • Lower operational costs.

Furthermore, by utilizing a cloud-based platform that brings together front-and-back-office touch points, the billing platform becomes a central integration point for data from existing, on premise systems with data from third-party, cloud-based applications. As a result, businesses can better monitor their subscription services via the cloud, gaining visibility into the entire subscriber lifecycle that was not previously possible.

Whether you’re beginning the process of implementing new subscription-based products and services, or are just considering it, look to the cloud for a modern platform to drive recurring revenue through the rapid monetization of these products and services.

 

As president and CEO of Aria Systems, Tom Dibble is responsible for managing overall operations and driving company strategy. A proven leader with a unique understanding of the SaaS market, he has more than 20 years of enterprise experience. He joined Aria Systems in 2009 from Oracle Corporation where he served as vice president of worldwide channels and alliances, as a result of Oracle’s acquisition of BEA Systems in May of 2008.

 

Image: Slavoljub Pantelic/Shutterstock.com

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