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Are You Ready for Change, Competition and Coopetition?

Part 2: No one can predict who will enter the market & how you will need to react, except that you will need to react & quickly

In the last MetraTech blog I introduced you to the Conferencing and Collaboration (C&C) market and highlighted the way in which C&C players uniquely approach the market. I challenged you to think about what was possible if IT didn't have "no" in their vocabulary; to imagine the possibilities of empowering product management teams to conceive of and roll out new services; providing an enterprise sales team with the ability to negotiate tailored agreements with enterprise customers and partners; eliminating the need to worry about how the billing system could turn a tailored agreement based on usage, volume, product type, service bundle, region and just about any other metric into reality. We also discussed in another blog why service providers in so many verticals are unable to think about what might be possible in the present never mind the future. Many are faced with the very real challenge of a billing system that is not able to support their business needs, but the fear and risk associated with change often causes decision paralysis.

Billing software must facilitate the customer selling and partner compensation process. With old world and "lite" recurring billing systems, the billing system becomes an inhibitor for business. For too long, businesses have been a slave to both the systems and the processes they impose. A solution that is designed to satisfy a specific set of industry and technology conditions for a particular time will not support the creativity required to differentiate service offerings. Even simple changes to business models shake the foundational assumptions that drove the initial design. If a billing system cannot incorporate the potential for change as a business evolves, it has failed to do its job. The flexibility to support change as technology, market conditions and business relationships evolve and organizational processes are transformed is the world of Agreements-Based Billing™.

The concept of Agreements-Based Billing although simple in definition is difficult if not impossible to implement with old world billing or recurring/subscription billing systems. Generally, the more sophisticated the enterprise, the more complex the business agreement between the user and the provider. In a growing number of cases across industries, the agreements between the provider and their enterprise customers requires the type of billing solution flexibility that is unique to MetraTech through its metadata approach.

In the C&C market, because so much of the customer relationship process is billing and customer-interaction oriented, the greatest level of flexibility has always been required within the billing and customer portal functions. The continual push for more advanced interactive services also meant that pure play C&C players were implementing business models directed at dynamic customer interaction, well beyond what was being done by providers of traditional voice and data access service offerings. C&C providers understood that what drove loyalty, service stickiness and increased customer satisfaction was not simply a service being made available at the lowest market price.

Today, if you look around, there are usage-based models emerging everywhere. For example, almost all Infrastructure-as-a-Service (IaaS) solutions are usage-based. In Software-as-a-Service (SaaS), an increasing number of companies are finding it harder and harder to maintain a single flat subscription price. Cloud billing solutions must support usage components around storage, content and other service-level agreements (SLAs). This goes beyond a flat-rate bundle or even multi-service tier-based customer usage plans, to include significantly more sophisticated behind-the-scenes issues with content consumption and supplier/partner compensation. What price drives people to make purchases of your product or service? Which features increase value? How can you steer customer behavior to drive higher margin services? All of this also increases the need to provide clarity to customers on what they've purchased, what they've consumed and what you are asking them to pay for. We all understand the concept of bill shock.

The C&C market provides a foreshadowing of what it takes to drive services that are sticky, differentiated and relevant in a global business-to-business (B2B) environment. The speed and flexibility in pricing, promotions, discounting and business models that have been important factors in C&C are now critical in just about every service industry:

  • Change, competition and coopetition: no one can predict who will enter the market and how you will need to react, except that you will need to react and quickly. Price and rate changes and subscriptions are a starting point. Differentiation will come from where you go from there.
  • Service differentiation comes from internal innovation around core competency and bundling third-party wrap-around services. Getting off the commoditization path and not letting your billing system dictate your model is critical.
  • The Internet is the most disruptive force in the history of business, opening the door for new business models. Now, businesses must adapt to the new wave - one that is virtual, social and mobile.

These trends create an urgent need for flexibility and adaptability never seen before. Are you ready?

More Stories By Esmeralda Swartz

Esmeralda Swartz is VP, Marketing Enterprise and Cloud, BUSS. She has spent 15 years as a marketing, product management, and business development technology executive bringing disruptive technologies and companies to market. Esmeralda was CMO of MetraTech, now part of Ericsson. At MetraTech, Esmeralda was responsible for go-to-market strategy and execution for enterprise and SaaS products, product management, business development and partner programs. Prior to MetraTech, Esmeralda was co-founder, Vice President of Marketing and Business Development at Lightwolf Technologies, a big data management startup. She was previously co-founder and Senior Vice President of Marketing and Business Development of Soapstone Networks, a developer of resource and service control software, now part of Extreme Networks.

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