Global enterprises of all kinds continue to migrate toward digital business models and adopt recurring revenue strategies. These were among the primary conclusions from a recent IDC Market Analysis Perspective* examining worldwide digital business models and monetization trends.
The analyst firm’s survey of CEOs found that the world’s business leaders see digital models as a means to operating with greater efficiency, driving customer satisfaction to higher levels, increasing employee productivity, and generating greater levels of revenue – all of which are among their highest priorities for the management team and their respective boards.
Organizational leaders see digital and recurring business models as a path to generating more predictable revenue streams driven by the selling of higher-margin services delivered via flexible, consumption-based pricing models. Software companies alone are projected to continue moving to subscription models at a clip of 17.9 percent by 2026.*
And while these trends are pervasive, they are particularly pronounced for traditional B2B companies seeking to sell more services via digital channels.
Deploying a successful recurring revenue dynamic is dependent on many high-performing functions across the organization interacting and integrating in a smart and seamless fashion. This includes all components of the monetization life cycle, with the billing system perhaps the most critical of all. And herein lies the challenge faced by enterprises with digital aspirations.
Traditional businesses seeking to digitize service delivery and pricing simply do not have the technology or flexible billing and monetization systems needed to track and analyze usage and find value metrics, according to IDC. They continue to rely on error-prone manual processes or custom solutions that cannot scale. Companies that do have some form of a consumption billing capability have often found their solution to be inadequate for their future needs.
As a result, enterprises that correctly see the billing platform as the linchpin to digital and recurring revenue success are seeking to enhance their billing, subscription management, and price optimization capabilities.
IDC identifies some of the common requirements of a billing platform, both for today and in the coming years. Among them is the ability to easily integrate with and operate alongside existing systems while supporting new and potentially non-traditional partnerships. Billing platforms must offer intelligent and automated workflows as well as price optimization. Finally, vendors must be prepared to provide a hands-on approach to helping customers manage change and implement a strategy and model that will ultimately drive a measurable return on the investment made in an enhanced billing platform.
The IDC report predicts that digital and recurring revenue models will become dominant in more industries, resulting in an increased urgency for enterprises to adopt a best-in-class, modern billing solution.
Watch our on-demand webinar on Monetization trends in Enterprise Businesses to learn more.
*Worldwide Software Business Model (Subscription and License) Forecast, 2022–2026 (IDC #US49344622, July 2022).
