Monetization Operations are the operational activities required to support a billing system. These are almost always functions within the core billing system, but may be supported or augmented by external systems as well.
Because billing activities have a large customer-facing component, credibility and reputation can be impacted if erroneous data is sent to end-customers. It is imperative to run tests and confirm that the operations will run smoothly and as expected when invoices are created or any other customer communication or collateral is distributed.
These processes may be automated or manual depending on the system, but many times there are processes in place for balancing the percentage of customers that will invoiced at any given time to minimize the customer impact of errors and the workload on the resources managing the process.
Monetization Operations Components
New Product Introduction
When companies in complex multi-channel negotiated selling environments introduce a new product or service, there is a slew of tasks that need to be completed before it can be made available. With most companies, the product and operations teams work together to ready a new item.
From an operational standpoint, configuring the product or service to have consistency across all selling channels requires close synchronization of all product catalogs. Bundling, up-sell, and cross-sell opportunities should be tailored to the channel in which the product will be offered, and solid selling strategies in place prior to product launch.
Like a symphony conductor, the Monetization Operations domain needs to have all instruments working in concert to create immediate opportunities for the enterprise to capitalize on its new offerings.
Review Key Metrics
Every company has its own distinct lineup of key performance metrics. Most revolve around the universal carrots in business – customers, revenue, and profit – and are high-level indicators of present growth. Monetization Operations is charged with identifying and tracking key metrics on the health of the ecosystem and the company in general – past, present, and future.
Funnel metrics highlight gaps in service and customer experience in the lead-to-order paradigm, often bubbling people, process, or technology issues to the surface in areas such as Marketing Automation, Salesforce Automation, CPQ, and Partner Management. Additionally, looking at the inverse funnel or fallout metrics can provide equal insight into other opportunity areas.
Revenue ratio metrics are also widely used in the service provider space. Average Revenue per User (ARPU) and Return on Ad-Spend (ROAS) tell similar stories from different departmental perspectives. There are dozens of revenue ratio formulas in use, and all strive to reveal the revenue benefits of a company’s selling efforts before expenses.
Profit or margin ratio metrics are similar to the aforementioned revenue ratio metrics but add the expense layer to the equation. From a financial perspective, these are the metrics of substance. The ability to determine the net profit per customer by selling channel, marketing campaign, product category, and/or a host of external demographic information, allows an organization to ‘double-down’ in areas in which it’s already successful, and seek to optimize its performance in other arenas.
Many business metrics discussed are closely monitored by the company organizations that have the greatest ability to affect them. Monetization Operations, however, maintains dominion when a change in the people, process, or technology can benefit the enterprise.
New Monetization is an important element of the Monetization Ecosystem.
It is the ability to take a product or service that has been offered in a legacy fashion and create new pricing constructs that allow for recurring or subscription revenue. This fundamental shift in how service companies go to market has altered business models foundationally, turning many sales and marketing organizations from hunters to farmers. The days of ‘sell it and forget it’ have given way to cultivation of long-term customer lifecycles with more frequent and proactive product and service updates.
The best product and service monetization transitions are those that are beneficial to both the provider and the customer. A company’s ability to clearly communicate the value proposition to its users will realize the biggest benefits.
New monetization pricing strategies can take many forms, most some iteration or combination of flat, tiered, or tapered rates. Many companies also offer a free version of their services, with restrictions based on features, usage, or trial expiration.
Manage Vendor Roadmaps
A key in maintaining a strong monetization strategy is the ability to effectively manage vendors. Vendor Management (VM) is the practice of evaluating vendor performance alignment with current and future business processes.
There are four distinct categories of vendors, and each have a specific purpose and roadmap within a company.
Strategic Vendors play a sizable and significant role in the delivery of IT Services to the Business. Strategic Vendors are not easily replaced and tend to foster longer-term, dependent relationships.
Example: ATG continues to foster a relationship with Key Strategic Vendors, such as Salesforce, ARIA, GoTransverse, SpringCM, and Conga, as well as other emerging Enterprise Cloud Platforms to maintain a pulse on industry trends, establish vendor neutrality, and harvest credibility within the ecosystem.
Foundational Vendors are essential to deliver products or services to the customer, as the foundation of a business. Unlike Strategic Vendor relationships, Foundational Vendors tend to be 2-3 years in length and are primarily transactional. Foundational Vendors are positioned within a company due to the ability to transition to a Strategic Vendor after a period of time.
Niche Vendors offer products or services that may not be as generally available in the market place but could provide value to the company.
A Niche Vendor may be selected based on a specific product or service offering that could prove to be relevant to a company, depending on need. Offerings may be seasonal, one-time, or custom products or services that create instant or future value for a company.
Commodity Vendors, or Phase Out Vendors, offer products that are available from a substantial number of sources at very competitive price points.
A Commodity Vendor may be a vendor that has a product offering available in multiple distribution channels, such as paper products, office supplies, or any industry standards needed for daily operation.
It is important for a business to understand, maintain, and invest in vendor management to be better positioned and prepared for any changes that may occur within a business or industry. The ability to manage vendor relationships by understanding the fundamental role it plays within your business will allow leverage upon vendor selection and the ability to respond to changes within the business and/or industry.
Manage Vendor Releases
Once a business has established and identified their Vendor Management Roadmap, it is important to understand and effectively manage any current, pending, or anticipated Vendor Releases. Release Management can be defined as the methodology to plan, build, schedule, and release a new function, enhancement, or product in a controlled manner.
For example, a Software Company may choose to release a version of their existing platform to enhance or add new functionality, or to streamline user experience. Depending on the timing and objective of each release, it may have significant impact on the business, which may influence decisions in Vendor Management or the overall Monetization Strategy.
Managing a Vendor Release is no small task. In fact, like introducing a new product, there is a symphony of components that need to work in concert for it to be successful. Releases must be well communicated and planned to include components such as design, build, testing, and must align all elements across the ATG Monetization Ecosystem™.
To accomplish alignment within the ATG Monetization Ecosystem™ is to first analyze the current state ecosystem & roadmap for a company to determine the if or why a release of a new product or functionality is needed. In some cases, you can make an argument that the current product offering, or version, meets and/or exceeds most of your customer base. In that event, the gap analysis would deter a company from introducing a new functionality or product when it is not needed.
Inversely, in the result of a new release, an individual customer can decide if a new release is necessary for their specific business use cases and opt in or out of the release altogether as a result of the current state ecosystem analysis. However, in any event, careful coordination and adherence to best practices is vital for the overall success in vendor release management.
Best Practices for Vendor Release
Develop Communication Plan or Release Policy to align the company’s overarching goals, timeline, resource allocation, and plan for the release.
Develop Release Planning that encompasses the entire ATG Monetization Ecosystem™ from a system, functional groups, and users perspective to understand impact on all functions of business. This exercise will help align the organization to the overall objective of the release.
Design, Configure, Test, Adjust, Fix, Validate, and Repeat.
Quality Assurance Review to ensure that the release is prepared and ready for any deployment or introduction. This includes folding in functional users or customers to glean feedback and finish testing the user acceptance of the new product and/or release in a controlled environment.
Confirm & Communicate
Confirm Release Readiness & Communicate Rollout Plan with confidence. When the new functionality or product has been validated, it will be followed with a specific rollout plan to be executed.
Schedule Releases Around Normal Business Activities to mitigate risk when deploying new functionality or introducing new products as not to disrupt or impede business activities.
Training & Support
Engage in Training & Support Services to enable and prepare customers for the upcoming release. This also includes communicating schedule and establish the proper support services should any questions or issues surface throughout the process.
Standardize Release Methodology and Cadence with customers to help manage expectations with sound, consistent processes.
Release Management Planning Factors
Data Driven Releases
Scheduled, Consistent Releases on a Specified Delivery Date/Release Cycle.
Reverse Release Planning
Indicated by a Compelling Event (such as a Kickoff or Product Offering), to reverse engineer the planning by starting with the end date or compelling event.
Forecasted Release Planning
Communicate future enhancements or release dates with a structured, phased rollout to encourage alignment in planning efforts
Benefits of Release Management
Vendor Predictability & Transparency
Release Management provides a clear lens of any future development or enhancements within the Vendor Roadmap. This allows business time to make decisions based not only on current, but also on future functionality or product offerings. Releases should be scheduled with the Customer in mind. Be predictable, on time, and on schedule.
Vendor Releases allow for vendors to offer updated and current offerings that are competitive across the market or industry.
As Vendors learn more about how Customers are leveraging technology, they will now have an opportunity to pivot or incorporate user experience feedback within future releases. This iterative approach is beneficial to Vendor and Customer alike because it provides the ability to respond retroactively and proactively to needs of the product.
Challenges of Release Management
When a business chooses a Vendor based on the Roadmap of products or services offered, with the anticipated Release Management updates. If the Vendor over estimates delivery of future releases it can strain the business relationship.
Incomplete Testing Leads to Increased Bugs or Defects in Production: Vendors need to be cautious when altering or changing a Production environment. To mitigate bugs or defects for customer Production Environments, proper and thorough testing needs to be completed prior to the release. If a Vendor doesn’t follow best practices, there can be major
Misalignment between Vendor Roadmap and Release Management: A Vendor Release touches every aspect of the ATG Monetization Ecosystem™. Therefore, every aspect of the business must be synchronized. All system and company architecture must be able to accommodate the release, from the perspectives of product catalog maintenance, training efforts, communication plans, schedule, resource allocation, and support services. Vendor Releases must be organized and aligned to ensure the overall success of Vendor Release Management. enhancements or release dates with a structured, phased rollout to encourage alignment in planning efforts
A company’s ability to effectively manage their specific Vendor Roadmap and Vendor Releases will have significant impact on the ability to scale, and requires taking the entire symphony of actors, benefits, and challenges into consideration.
Manage Monetization Ecosystem
The ATG Monetization Ecosystem™ provides a comprehensive view of the technology components that are relevant to managing customers and revenue in the rapidly evolving service provider industries. For a given company, the areas of focus will be different and will likely include focus on different components of the ecosystem. For example, a company that provides products and services to the consumer market through the e-commerce channel will require a different set of technologies than a business-to-business company that sells to customers via a negotiated selling model with quotes and rigorous contracts.
Monetization Operations can vary depending on industry, market segment, product or service offering, available technologies, and the overall business trajectory and accompanying roadmap. To enable a business to make better strategic decisions to deliver value to customers, it is important to understand all potential impacts and changes to the overall Monetization Ecosystem.