Subscription Services Make You Reconsider ERP
By Alvina Antar, CIO, Zuora
"The challenge for the most CIOs is to leverage existing technologies, but not be limited by them
When you want mountaineering shoes, you won’t settle for sneakers. They might still offer some protection for your feet, but definitely not the kind you need high up on a mountaintop Similarly, use products for what they are primarily built for and not extend their capabilities to areas outside of the its core competency.As your business transforms, so should your technology. You should take a hard look at your existing end-to-end architecture to determine if you are positioned to meet your business strategy. As your company pivots and transforms, so should you. You need to realize the capability gaps that prevent you from supporting your business’s growth. When the existing quote to cash architecture is not able to support a new product (or service) launches, it is time to supplement your investments to align with your go-to-market strategy.
"The challenge for the most CIOs is to leverage existing technologies, but not be limited by them"
High-tech, Media and Telecom and IoT industries are shifting from traditional pay-per-product (or service) to subscription-based recurring revenue models. This shift is not designed or supported by Oracle and SAP. With most ERP systems, the transaction ends with the sale–there is no relationship beyond the sale. Legacy ERP systems lack the ability to monetize ongoing customer relationships. Rigid ERPs are unable to manage complex use-cases like cross-sells, up-sells, timed promotions and constant price adjustments. The hard reality is that you need to design a new quote-to-cash architecture to join the ‘Subscription Economy’.
You may receive pushback from your tenured architects and engineers who have built a career on deep expertise in Oracle and SAP and business processes-none of which are documented. These are the people who are averse to change and unwilling to challenge the status quo. It is called job protection and the only job at risk is yours.
The challenge for most CIOs is to leverage existing technologies, but not be limited by them. Flexibility is critical to survival. I have seen enterprise businesses spend years and millions of dollars attempting to implement a solution using the wrong technology as they were unwilling to let go off existing investments. As an IT leader, you have to stay tuned to evolving technology trends, have confidence to take calculated risks and embrace change.
It is all about knowing your business to proactively anticipate needs. Do not allow your three to five year roadmap weigh you down and force your business to go around IT and identify alternative solutions to meet their time to market needs. You must be nimble and provide the agility your business requires to stay competitive in the marketplace. Your business will not wait for IT to catch up or better yet, wake up.
Power of Investing In Your Own Technology
As technology becomes more entrenched in every aspect of our lives, the role of the CIO continues to expand, especially at software companies. Forward looking companies have realized that IT must play a key role in strategic acceleration and constant reinvention. CIOs have a dual mandate to balance business enablement with the traditional role of IT operational excellence–table stakes for any IT leader. Too little change will generate missed opportunities. Too much change too fast could wreck a company’s momentum, brand, and bottom line.
Last year, I committed to advancing the use of our own technology, “Zuora on Zuora”—a strategic program designed to become our best reference account. As an ideal SaaS customer of our product, the IT team initiated an internal sales cycle, defined the value assessment with executive sponsors, developed a design blueprint and deployed successfully. The business objectives enable speed, scale and customer success by fully utilizing Zuora’s software for recurring billing, payment, and analytics. This has served as an unbiased eye of a customer, providing feedback with priorities to product and engineering and becoming a trusted CIO-to-CIO reference.
“Zuora on Zuora” has created significant business value by internalizing our customer’s experience. Seeing how the product is used in real-time has benefitted the entire company. We have a direct, unfiltered view of usage patterns, requirements and performance and our own testbed for alpha releases. What better place to learn from than ourselves?
As CIO, you are the primary decision maker on technology purchases. The first question you should ask a company when assessing their technology is “how do you use your product internally?” This is a question any technology company’s CIO should have a clear answer to. However, they may dread having to answer this because they do not effectively use their own product. If you are lucky, the awkward moments pass quickly. If not, you have raised more questions than answers.
Be positioned to share your own implementation with pride-the power of transparency. Build IT expertise in your product and have a profound impact on your business transformation. Gain immediate credibility by providing best practices, design principles, and implementation strategy.
I am betting on the power of investing in our own technology. Are you?