Avoid “The Crush” With Your Recurring Revenue System

Avoid “The Crush” With Your Recurring Revenue SystemI was stuck in a traffic jam the other day in Southern California. Some of you might think that statement is redundant. It’s the penance we pay for all of the sunshine. There is one particular stretch, affectionately nicknamed The Orange Crush, where three freeways merge, lanes split and go off in several different directions, and at times it looks like the entire thing was designed as a giant experiment in chaos theory. I’m not an expert at highway design, but it seems that there are too many connections and too many people coming together at cross-purposes.

I saw something similar on a project I was working on not long ago. We were in the planning stages for deployment of a recurring revenue solution for a small business unit within a global enterprise. This business unit had been dealing with one-time sales to a small number of customers, and was looking to add a new delivery platform supporting a recurring revenue product line that would rapidly grow the customer base. The business processes we had in place were scaled for a small client base, not the rapidly expanding base we expected to serve with this new initiative.

We went into the project with concerns related to client provisioning. We had learned the hard way what can happen when you get the provisioning process wrong. The most visible sign is when customers call to complain that they can’t get the products they’ve signed up for. What is less visible, and perhaps more serious, is the potential for revenue leakage. If customers are given access to products they haven’t contracted for, how do you charge them? If you don’t have the right accounting controls in place, you might charge the wrong price, or you might not charge them at all.

As we looked at the provisioning process, we realized we had a bigger problem. We had data about our customers in our CRM system, our billing system, our accounts receivable system, and our fulfillment platform, but those systems weren’t communicating. Updates to one system didn’t always make it to other systems. There were business processes, including client provisioning, where we were manually entering data in two or three places. The dataflow diagram looked a bit like that Southern California mash-up of a freeway.

This might be manageable for a small customer base, but we knew from experience that data fragmentation and manual processes would become a major traffic bottleneck and customer service issue as the business grew. Customers are not happy when they can’t access service, or when their invoices are incorrect, and they’re even less happy when customer service reps don’t have the most up-to-date data to fix the problem.

We needed a way to get data from one location to another, to get messages and alerts to the right locations, to tie workflows to events within our environment, and to get our billing right. We found that software solutions like Aria can help. Using out-of-the-box task scheduling, event management, messaging and API functionality, along with some commercially available data connectors and a few lines of ETL-type code, here’s what we were able to do:

Clients enter the sales pipeline through the CRM application. When a deal is closed, customer status is changed in CRM. The event management functionality in our recurring revenue management system allows us to automatically trigger a series of events from this point. Customer and plan data is pushed to billing, so that it is there when needed for rating and invoicing. Customer and plan data (and the list of products the customer can receive within their chosen plan) is pushed to the fulfillment platform. The customer can now go to the fulfillment platform and receive products. When the first invoice is generated, the customer data is also pushed to accounts receivable.

We accomplished three things. First, customer setup happens in one place, and that data is then pushed everywhere else it’s needed. There is no data fragmentation, because everyone is working from the same data source and the same data exists across all four platforms. Second, by automating these processes in real-time, we eliminated any potential delay between customer sign-up and provisioning. The customer can now get what they want when they want it. Third, we eliminated a major source of revenue leakage – customers will only receive the products that they have contracted for.

Our local transit authority hasn’t had much luck fixing the traffic jam at The Orange Crush. Thankfully, for my client, we fared a lot better, bringing multiple data sources together and providing a solution that ensures all systems are working together towards the same purpose.

– Bob Harden

Recurring Revenue Success: Five Common Pitfalls to Avoid