Achieving Competitive Advantage with a Subscription-Based Revenue Model
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The document discusses the advantages and challenges of a subscription-based revenue model at Aspect Software, highlighting the importance of renewals, which account for 47% of their revenue. It emphasizes the need for automation in managing renewals and data accuracy, resulting in significant process improvements. Key lessons include the importance of data governance, simplification of processes, and the commitment to utilizing tools to enhance efficiency.
Achieving Competitive Advantage with a Subscription-Based Revenue Model
- 1. © 2018 Apttus Corporation #AccelerateMO Stefanie Causey May 16, 2018 Achieving Competitive Advantage with a Subscription-Based Revenue Model
- 2. © 2018 Apttus Corporation Sr Director, IS Solutions Delivery Stefanie Causey “One of the things that I personally love is that 360-degree view of how things get managed or upgraded within our environment. That view has been transformational for our organization. And without CPQ, we wouldn’t be there.” • Senior Director Delivering Technology Solutions at Aspect Software who is also pursuing a Masters of Science in Information Management at Arizona State University
- 3. © 2018 Apttus Corporation Reimagining Customer Experiences with Aspect
- 4. © 2018 Apttus Corporation Renewals Are Important: 47% of Aspect’s Revenue Renewals are 47% of Aspect’s total annual revenue Funding operations as we “move through the belly of the fish”
- 5. © 2018 Apttus Corporation Renewals Challenges: Speed, Visibility and Accuracy Speed Lack of self-service for partner channel Visibility Funnel not known until quarter began Accuracy Poor maintenance of asset data
- 6. © 2018 Apttus Corporation Key Considerations Co-Termination Add on at multiple points in a year. At the second year renewal, similar assets are combined Automatic Renewal Create the renewal opportunity when the previous opportunity is closed Upsell / Upgrade Identify opportunities to increase renewal through upsell or upgrade options
- 7. © 2018 Apttus Corporation Tools for Success – with 360o Automation CRM ERP Non-Renewal 2015 Renewal 2016 2015 2015 2017 Configure Price Quote Contract Management Asset Based Ordering Intelligent Workflow Approvals Configure Price Quote HYBRID
- 8. © 2018 Apttus Corporation And We Achieved Success! © 2018 Apttus Corporation Processing Speed Building a renewal quote dropped from 3 days to 0 days – “it’s just there!” Order & Asset Accuracy Significant decrease in data cleansing related tickets – 85% reduction Funnel Visibility From <3 months to 1 year of visibility; auto-renewals mean fewer missed opps 0 Days 85% 1 Year
- 9. © 2018 Apttus Corporation© 2018 Apttus Corporation More To Do Complete contract co-termination 2019 Upgrade to remove customizations and complexity
- 10. © 2018 Apttus Corporation We Learned Valuable Lessons You Can Leverage • Data is key: Commit to initial data cleansing as well as ongoing data governance. • Simplify: Where at all possible, simplify. Simplify processes, products, touchpoints, approvals, etc. ANYTHING should be up for discussion! • Commit to tool: Make it impossible to process an order without using the solution. “If it’s not in <Salesforce / Apttus / NetSuite>, then it doesn’t exist!” • Automate: Maximize the rich toolkit in hand. Write workflows, triggers, and operations that remove the need for manual touches. • Push HARD: Don’t consider what isn’t possible, think about what is. Question everything!
- 11. © 2018 Apttus Corporation We Learned Valuable Lessons You Can Leverage (One Year later) • Data is STILL key: If you don’t enforce your policies and procedures, your data will go bad very quickly all over again. • Customizations are HARD to get rid of: Avoid significant customizations if you can. They are sticky and really difficult to remove! • But there is something to be said for STABLE: We want to upgrade but it’s hard to convince the business because they have LONG memories.
- 12. © 2018 Apttus Corporation
Editor's Notes
- #5: Renewals 40% of business, sustain the business/customer relationship) Key to financing the organization (moving the belly to the fish) as we are arching up on Cloud revenues, swapping the revenue stream – renewals keep them afloat
- #6: Asset data was notoriously bad due to poor data maintenance Complex product mix including both products, services, and renewable maintenance. Complex bundling of products with related and matrix pricing for components. Renewal funnel was a complete unknown until a quarter began. The way we sell vs the way we bill vs the way we fulfill vs the way we service Heavy white label partner channel internationally. Partner Enablement (comments: empower partners to help themselves in managing assets and renewals, provide service; allow them to quote by themselves; partners resell software, when they renew; automate partner quoting with automated discounts)
- #7: Other considerations included co-terming in year 2, add on or adjust mix of products, during renewal cycle, can auto-renew and co-term in a year, decommission and reinstatement (assets are add on business, upgrade business, driven on what they have – white space analysis; understanding what they have)
- #8: Apttus (CPQ, Intelligent Workflow Approvals, Contract Management, Asset Based Ordering (ABO) Netsuite (comments: handles fulfillment at point of close, product set up, sends updates back) Salesforce Service Cloud connection custom built that creates native bundles level assets, service contracts with entitlements (multiple levels of service) In 2017 we added the Azure SQL Data Warehouse as another piece of our infrastructure
- #9: Efficiencies - Automation (Comment: fully automated process; Apttus and Salesforce handle the full product lifecycle – initiate and manage for clients) Quote generation speed Smaller quote support team Visibility (Comments: able to show in bookings full year of revenue, can track bookings to revenue, Better to know at the beginning of the quarter what would close by the end of the quarter) Dramatically better reporting (Report funnel down to the product family, know how many products are moving; get down the nitty gritty detail on what got sold Order Accuracy was 65% a year after implementation and is now 85% Sales management - Volatility rate (comment: from beginning quarter to end of quarter – dropped 70%) Customer centric selling implemented Channel management – better
- #11: Packaging (Comment: Complex packaging) Pricing (Comment: Complex pricing, like related pricing (buy this, need this)) Assets and Renewals Types (comments: can co-term, can easily, add on or adjust mix of products, can auto-renew and co-term in a year, handle partial wins) (assets are add on business, upgrade business, driven on what they have – white space analysis; understanding what they have) Partner Enablement (comments: empower partners to help themselves in managing assets and renewals, provide service; allow them to quote by themselves; partners resell software, when they renew; automate partner quoting with automated discounts)