Blog Digital Transformation

Successful Digital Transformation Means Preparing for Increased Levels of Systems and Billing Complexity

Brendan O'Brien

1 March 2022

Like the latest TikTok dance challenge, digital transformations are sweeping the globe. From telecommunications to software to media and publishing to automotive and beyond, companies across a wide swath of industries are expanding beyond what they naturally do and historically have done.

Insurance companies, no longer content to sell just home, life or automotive policies, are bundling identity protection and other nontraditional products. Automotive manufacturers are hawking onboard entertainment and transportation-as-a-service offerings. Telecommunications companies are leveraging 5G technology to sell on-demand “slices” of networks, as well as leveraging partnerships to resell software licenses to businesses and expanded content subscriptions to consumers.

Transformations take different shapes and forms from one industry to the next, but they are driven by the following common themes and realities:

  1. We need to expand the footprint of what we are selling and to whom
  2. We need to streamline processes and increase automation
  3. We need to decrease customer churn (and improve customer retention)
  4. To accomplish 1 and/or 2 and/or 3, we need to modernize our technology infrastructure

This trend was certainly well underway before Covid. The pandemic has only heightened awareness of the need to digitize, underscoring how quickly life can change and the importance of futureproofing from whatever unforeseen challenge might come next.

However, with digital transformation come new layers and levels of complexity for which digitizing enterprises need to be prepared.

First, as service providers begin to explore opportunities to vary their products and services, they quickly realize their old systems are not up to snuff. Existing systems are tailored for the business that was and the old way of doing things. Retrofitting those systems, usually the first attempt made by these enterprises, is a fool’s errand, as companies quickly come to learn the current stack lacks the flexibility or agility needed to accommodate and generate revenue from new and more complex services. Only a modern technology stack that can support both the digitally enabled and legacy businesses will do.

On the customer side of the equation, complexity comes about in the form of new expectations around service consumption and billing.

Not long ago, licenses, maintenance and service contracts were typically delivered via a flat fee. Guesses were made at the outset of the engagement based on the anticipated volume level, and a fixed price was set. If consumption increased, the contract would be reevaluated and the fee adjusted accordingly.

This paradigm has shifted dramatically. Enterprises are no longer content with the old, buffet-style model that typically, if not always, benefited the service provider. Motivated by a renewed, pandemic-driven commitment to fiduciary responsibility, combined with the emergence of pay-per-use delivery models, enterprises today demand more sophisticated, variable billing models that ensure they pay only for what they use. These models have created new market opportunities, but satisfying the usage-based and pay-per-use is inherently more complex, requiring a deeper level of systems sophistication.

In the world of consumer subscription services, the flat monthly fee structure continues to thrive. Consumers seek cost certainty and have little appetite for variability. In the enterprise environment, however, the opposite is true. Digital transformation is not simply about dreaming up new services or buying a new CRM platform. Companies need to anticipate and prepare for a range of new complexities to ensure their digitization investments ultimately deliver the revenue and market growth they crave.

Brendan O'Brien

Chief Innovation Officer & Co-Founder at Aria Systems. Brendan leads the product direction and drives the launch of new products. He introduced the world to cloud billing, and innovated database-driven, enterprise-grade web applications – before the concept of “cloud” was even on the horizon. Brendan is at the forefront of the recurring revenue revolution that is empowering enterprises — and specifically enabling information systems and new business models to secure predictive revenue streams while improving business processes.

1 March 2022