Not All SaaS Billing Systems Are Created Equal

I got called into my boss’ office not that long ago for a meeting. You know that meeting, the one where your boss says, “I have a great opportunity for you, “ but something about the way he says it leads you to believe that this is not going to end well. This felt like one of those meetings.

Our business was expanding, opening a new bureau in Australia, which would become the template for future expansion in other markets. I wound up responsible for a cross-functional team that would select and then deploy a billing solution to roll out with the new fulfillment platform.  

Timelines were tight and business requirements were sketchy at best, evolving over the course of the project. We had to make several ‘educated guesses’ to get baseline requirements for the ‘right’ billing solution to support this business opportunity.  That was not a comfortable place to start from, but it’s also not that uncommon for new businesses or product lines.

So how do you evaluate vendor solutions?  Everyone has their own criteria based on their own unique requirements, but there are some items that are common to most businesses; things like cost, ROI, flexibility, scalability and risk/security. We created a scorecard for our needs, and learned a few things along the way.

Start with cost and ROI, which our business was very sensitive to.  Every solution has a deployment cost, a maintenance cost, and ongoing operational costs. What surprised us was how vulnerable our ROI model was to soft costs. Factors like time to market and platform risk could dramatically impact the model. In evaluating vendors, we paid a lot of attention to those potential soft costs.

Time to market was critical. While there are many aspects to this, a key factor for us was the level and availability of back office and IT support required to get the system up and running as well as the impact of that on our timeline. Reducing time to market would reduce our total cost and business risk. Extending time to market would add opportunity costs for lost sales and potential loss of competitive advantage.

We had a limited knowledge of SaaS billing going into this project. We were already using a SaaS CRM solution, so we knew the benefits of SaaS in terms of cost and time to market. What we didn’t know was if the suppliers in this space could provide the level of configurability, flexibility, responsiveness and scalability to support our enterprise application. We were pleasantly surprised to find that we weren’t necessarily locked into a traditional software deployment.

One of the things we had struggled with in our homegrown billing applications was an inability to adapt to new ways of packaging and selling products. Going forward, we would need the ability to support a wide variety of product offerings, monetization models, and pricing schemes. We knew those requirements would change over the course of the project right up to go-live, so flexibility was critical.  In our evaluation, we asked vendors for everything we could think of, knowing that if we could think of it, our sales people eventually would too. What we learned is that capabilities vary greatly from vendor to vendor, and that it takes a deep dive with business specific use cases to determine what a system can and cannot do.

On the technical side, we learned that not all API’s are created equal. Integration requirements for our front end CRM system and backend financial system evolved during our selection process and over the life of the project. We found wide disparities in the capabilities of vendors to provide a seamless end-to-end prospect-to-cash process and to integrate with our product fulfillment platform.

In the end we chose a solution that we felt provided a balance of cost, time to market, functionality, integration, and risk management that best suited our business.  I’m happy to say that my early sense that things might not end well did not come to pass.  The project went live on time and on budget.  I’ve since moved on to other endeavors, but this solution is still running strong.

Bob Harden


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