Digital transformation remained a dominant business theme in 2022, with enterprises of all kinds continuing to pursue digital business strategies. In doing so, they seek not only greater flexibility and capability from modern technology solutions, but also a lower total cost of ownership (TCO) than the legacy solutions being replaced. As we conclude one year and look ahead to the next, we identify five key trends and developments that are likely to impact how buyers procure all back-office technology – billing and beyond – in 2023:
1. Adopting standards and a common language in a best-of-breed world
As enterprises continue to move toward a best-of-breed solutions approach, the ability to understand and differentiate between individual software providers and their unique offerings is critical. To enable enterprises to build a complete solution using components from a range of different vendors, it is essential that all parties adhere to common standards so that everyone is speaking the same language. A prime example is in the telecommunications industry, where the TM Forum has successfully accomplished this through its Open Digital Architecture (ODA), which enables enterprises to make more clearly defined “apples-to-apples” functional comparisons among solutions providers. In the coming year, expect TM Forum-style standards to be defined and deployed in other industries where companies are moving toward best-of-breed point solutions.
2. Finding a balance between industry-specific solutions and the promise of SaaS
For a long time, enterprises were accustomed to buying and deploying proprietary back-office software built exclusively for their industry. Then SaaS came along with its industry-agnostic, horizontal approach that promised greater convenience, cost efficiency, and the ability to expand businesses beyond their traditional limits. Today, buyers are seeking balance: They still want all the benefits of SaaS, but they want them to be combined with the custom solutions and tools that their industry demands. To accommodate these requirements, expect the horizontal SaaS providers, like Salesforce and ServiceNow, to accelerate the introduction of industry-specific modules and configurations, essentially meeting the buyer in the middle.
3. Pulling back the curtain on private cloud
While the adoption of cloud technologies continues to accelerate, too many buyers still fail to understand the critical and significant distinction between public cloud and private cloud. To be clear, “private” is little more than a variation of the inflexible, on-premises systems enterprises have been installing for years. Instead of racks and physical storage closets, legacy vendors are simply deploying software in a virtual environment and calling it “cloud.” “Public,” on the other hand, is a fundamentally different model that delivers the real benefits savvy buyers seek: It includes not only the flexibility and elasticity provided by all cloud solutions, but also the quantum-leap gains provided by features like permanent access to all application upgrades and the wholesale elimination of entire categories of system administration expenditures, to name a few. Buyer sophistication will continue to evolve over the next 12 months. As it does, expect private cloud buyers – who are still absorbing operational, employment, and system administration costs – to migrate to multi-tenant, public cloud solution providers with increased velocity.
4. Protecting happy customer revenue amid economic uncertainty
Continued economic pessimism and uncertainty related to inflation will continue to pressure all businesses and revenues, particularly those in the subscription arena, as consumers and businesses look to manage costs. Amid the prospect of revenue losses from cancellations, this is no time to lose happy and satisfied customers to involuntary churn. This means investing in enhanced and sophisticated payment recovery solutions that guard against missed and failed credit card payments and dynamically engage customers the moment a problem arises.
5. “Getting serious” with Artificial Intelligence
Recent months have delivered some important movement related to the broad adoption and implementation of data lake technologies. Providers like Snowflake and DataBricks have established critical mass for the deep and wide data sandboxes many AI and ML applications require to be truly effective. Additionally, the unveiling of the OpenAI projects, ChatGPT and InstructGPT, have catapulted AI from the lab to the forefront of public imagination. This “double trigger” will spur many enterprises to truly and finally “walk-the-walk” when it comes to AI.
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