Viewpoint: Your Billing Transformation doesn’t have to be a bear.

“We can’t close our books in less than 10 days.”

“Sorry, you need to go back to that customer and renegotiate terms we’re able to bill for.”

“Our back office cannot meet the demands of our growing business.”

Does any of this sound familiar?  These are just a few of the statements leading one to believe it’s time for a back-office modernization.  For many leaders, the thought of overhauling the billing system (or systems) elicits nightmares akin to a charging bear. These aren’t flashy initiatives, can be lengthy and expensive, and have a disproportionate value proposition across the many parties required to make them successful.  This discussion focuses on the organizational planning necessary for such transformations and tees up the technical foundations for future Ravus articles.

Develop the Business Case

Igniting these transformation initiatives should start with a compelling business case that supports the investment required to make it a success.  Discretionary spending is generally tightly managed within the business and as you compete for funding, hard facts and figures tend to win.  Fortunately, the challenges you face in billing are quantifiable and the data required to build a strong case for investment is at your fingertips already. 

At Ravus, we have cataloged 40 KPI’s and Outcome statements that span 10 departments and can help orient you on the areas of your business you want to improve and the corresponding return on that effort. We feel that taking the time to sit with these, assess the areas that stand to have the broadest ROI, and then craft a phased approach as part of business case creation is the best path to successfully gaining traction.

Here are few metrics that span multiple departments to consider.

• Days to close revenue

• Billing inquiries/month as a percentage of invoices sent

• Monthly credit/dispute volume

• % of invoices receiving an adjustment

• Time to activation

• Opex Decrease

• No Touch Invoice rate

• Days Sales Outstanding

Sponsorship and Alignment

Regardless of what corporate initiative you are taking on, from the minor to the major, there is one common make or break element involved - alignment.  Not head nods in the boardroom or Zoom call, but true top/down, cross-department alignment on the business case, outcomes, and work required to deliver.

The decision to transform your Billing processes and technology is one of the largest and most inherently risky initiatives to take on.  Billing is binary. It either works or it does not, and it must work. The stakes are high.  Billing projects have a high rate of failure and often require other teams to behave differently. 

Why is the failure rate so high?

These transformations have other material implications as well:

A billing transformation done right spans the entire Revenue Lifecycle and requires teams from Sales, Product, Finance and every department in between to be in lockstep.  I particularly like the quote by Russell Wilson “the separation is in the preparation”, to draw attention to the importance of having a good plan.

While billing, finance, and operations teams often sponsor a billing redo, teams like sales , data, product engineering typically don’t feel the ROI, despite being on the critical path for a successful launch.

So, what can you do to get this alignment and craft a solid plan?

Ensure sponsorship at every level of the organization – Sit key department leaders down and ensure they understand the “why” and their role in the success of the initiative, even if their department doesn’t stand to see much ROI.  This may require some internal selling and negotiation, but it's paramount to success.                        

Set your north star KPI's and Outcomes – To add teeth to the “why” statements, articulating them in the form of KPI’s and Outcome statements helps to ground the organization in what success will look like and allow for clear articulation of these to your software and service vendors so they can share in the mission.  These should be set at the outset of the initiative and tracked at every key milestone to ensure the effort is remaining grounded in outcomes and the full team is sharing in the accountability.

Now that you have achieved alignment and defined your success criteria, you will need to think about defining the requirements that will drive you towards the outcomes you desire.

Nail your requirements

The business and technical requirements of these programs are as complex as they come, and we recommend a heavy up-front investment in nailing these down in advance of any vendor selection.  This is not an exercise that can be done in the margins and certainly not in one swoop.

We recommend generating a comprehensive cross-departmental list of requirements or user stories that include the critical and nice to have.  Once that is established, it falls on the department leaders to narrow down the list to the business-critical requirements that will eventually set the scope of the transformation.  Plan on a lot of iteration and likely some negotiation…again, not a quick exercise if you have done your job.

This topic has depth well beyond what can be covered in a discussion like this, so we will be sharing detailed considerations for each of the below areas in future discussions.  These are not exhaustive, but areas we feel are often glossed over and need your attention from the outset.

• Customer Hierarchy Requirements

• Product Catalog Requirements

• Migration Requirements

• Integration Requirements

Our team at Ravus has spent decades advising customers at every stage of these transformations.  We understand the nuances of transforming the way you manage your revenue and are here to help you along your journey.  We would appreciate an opportunity to speak with you about what you are facing and how we can help you separate yourself by preparing the right way.

Thanks for reading!