The times they are a-changing, and a superhero-like battle is brewing. We at ATG witness first-hand the intensifying pressure to drive new business faster and cheaper while maintaining compliance. The tension mounting between product and finance teams is sort of like Batman v Superman—both fight for good but have entirely different modes of operation.
The Battle Brewing between Product and Finance
In the Batman camp are the product owners. They need to launch new products to drive new revenue streams, create new bundling, and invent new monetization strategies. They are tasked with making sense out of subscriptions, usage, overages, tiers, cross-sells, up-sells, etc. to drive the business objectives of revenue growth. Like Batman, ever a vigilante, product doesn’t mind working in the gray areas as long as revenue (justice) is served.
Finance, on the other hand, is in the Superman camp. They too want revenue growth, but must navigate the new revenue recognition standards such as IFRS15 and ASC606, revenue forecasting, and revenue disclosures for these ever increasingly complex monetization strategies. The back end rigor and discipline to accurately measure every performance obligation, provide revenue assurance, and accurately allocate and recognize revenue is theirs to uphold. Like Superman, finance is bound by a ‘moral code’ in their quest for revenue (justice).
While stronger when they stand together, market and investor forces with the cunning of Lex Luther are pitting them against each other.
The Hidden Hero: Alfred, the CIO
Like Alfred, the CIO understands that product (Batman) and finance (Superman) are really on the same side. Stuck in the middle, the CIO is faced with building a quote to cash environment that supports both agility on the front end and rigor on the back end.
First, the product catalog. The new world order for products and services is to have some sort of combination of usage, recurring and non-recurring charges—basically three charge types for a single offering. Each can be discounted, waived, bundled, etc. to maximize revenue. Product catalogs exist in some form or another in CRM, ERP, Billing and CPQ applications, and they all need to be synchronized to facilitate products ability to sell.
Second, the business rules. The inventive strategies of the product team drive new complexities in product offerings, pricing, usage rating, discounting, renewals, contract amendments, and product delivery. These new complexities drive the need for business rule automation and enforcement across multiple processes and systems satisfying the requirements for both agility and rigor.
Third, the transactional data integrity. Starting at the very beginning, it’s a lead that becomes an opportunity, the opportunity becomes a quote, the quote becomes an order, then the traditional back office handover to invoicing occurs and processes kick in for payments and revenue recognition. Throughout these multiple stages and across multiple systems, various pieces of financial and event related data must be managed and tracked for the finance organization to succeed. There are so many points of failure that data can be lost, corrupted, or distorted not dissimilar to the age old game of telephone.
Joining Forces: Agility and Rigor
The CIO sees the new challenges that the product monetization strategies bring while simultaneously solves for the classic IT quote to cash workflow. The path forward requires thoughtfulness, planning and careful orchestration of:
• Prioritized requirements across all stakeholder groups
• Due diligence of technology platforms and vendors that support agility and rigor
• Development of business cases that address the goals and responsibilities for both finance and product
The ultimate output is a roadmap of the quote-to-cash overhaul led by IT and championed by the CIO, the ultimate solution provider.
At ATG, we work to understand the unique needs of our clients and help them identify the right people, process and technology needed to satisfying both agility and rigor. If you’re in a situation where the superheroes are battling it out in your company, just give us a call—shine the bat signal, have Jimmy Olsen signal Superman, or have Alfred pick up the bat phone—we can help you make the right decisions for your business’ distinct needs.
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