Business growth strategies rely on new revenue streams, which necessitate new and agile pricing models that can adapt to changing market needs. Thanks to the web, consumers are demanding more pay-as-you-go and fee-based products and services, and businesses are necessarily adapting internal business processes to accommodate agile pricing strategies. Without the ability to pivot pricing strategies rapidly, companies will not be able to optimize or will miss out on new revenue opportunities.
To illustrate, consider how market leaders have seen pronounced growth with the help of granular and a la carte pricing. Subscriber preference will continue to drive disparate pricing models. For example, online communications and over-the-top (OTT) media have been seeing market growth by adopting a la carte and granular pricing. In the case of Amazon, they are now offering additional fee-based channels, which will undoubtedly put further pressure on other entertainment providers to match Amazon’s content and pricing strategy.
At my company, an intelligent billing platform, I am seeing how billing services are affected as more and more companies embark on digital transformations. One way that these companies can continue to grow is by leveraging cloud-based tech to create a hybrid approach that can accommodate new products, pricing and partnerships without breaking the operations infrastructure.
Legacy Technology Becomes An Albatross
As organizations become increasingly reliant on technology, legacy systems become a roadblock to adaptability and growth. Business operations are built on a combination of enterprise and cloud technologies that are scaled to meet immediate needs but are often poor at accommodating pivot pricing. It’s difficult or impossible to predict future business needs but investing in closed systems that only yield immediate returns is a dead end.
Modifying your business platform to accommodate growth and new pricing models can be time-consuming and expensive. Still, without an agile platform that can change with business needs, you have limited options if you want to keep pace with the market.
Most organizations have carefully tuned existing business systems, so adopting a rip-and-replace strategy can be too costly. These complex legacy billing systems typically interface with multiple supporting vendors to handle sales tracking, fulfillment, billing, analytics and other business-critical systems, and significant changes to existing systems would necessitate changing these back-end connections.
Instead of rip and replace, many organizations work to extend existing systems by adopting a legacy development strategy to make as few changes as possible. However, as more connections and integrations are cobbled together, the result is often a Rube Goldberg configuration, where any single failure will affect the entire infrastructure.
Many companies tend to make business decisions based on the limitations of their legacy mindset or technology rather than customer needs. This legacy mentality is perhaps more of an obstacle than the legacy systems themselves. To compete, organizations need to rethink their infrastructure approach, including strategic partners and deployments, to create a more agile infrastructure that can support new revenue models.
Restructuring For Pricing Agility
To promote business agility, including ways to support agile pricing, companies should consider restructuring systems to support growth. This means being able to launch new products and services quickly, painlessly and cost-effectively, and that relies on automating business systems so they can adjust to changing business needs.
By automating business systems, you can add new products, modify pricing, test new pricing models and ensure accurate revenue tracking, including accurate invoicing. It also means having extensible and integrated back-office systems and adopting cloud services that can accommodate fast deployment with easy integration.
One of the real advantages of cloud computing is that it eliminates the need for legacy software while reducing costs and required resources. For example, choosing to add more cloud services rather than expanding enterprise resources to create a hybrid approach can maximize pricing flexibility. Providing access to cloud-based billing and rating engines, a revenue recognition solution and configure, price and quote (CPQ) systems can extend the useful life of legacy systems. Cloud systems are agile and scalable, and they can integrate with other cloud and enterprise solutions.
Best Practices For Agile Growth
As you plan for the future, take a hard look at your legacy systems, and identify those dead-end solutions that could hold you back. What parts of your workflow and billing infrastructure will prevent you from adding a new product or a new pricing model? It’s likely you already have a good idea which legacy systems will present problems. Assess their specific functionality and their role in the value chain, and then look for cloud-based alternatives that can perform the same functions, but without limiting business growth.
The secret to cloud success is finding the right software and creating integrated systems. Cloud migration doesn’t require you to unplug legacy systems, but you will want to ensure you have access to legacy data. You also will want to choose extensible platforms that you can build on as your operation grows.
Agile business processes help power the pivot, but legacy enterprise systems are often difficult to adapt, limit agility and inhibit a company’s ability to create new revenue streams. Much of today’s business agility is a product of the cloud, and companies should embrace new technology so they don’t miss new revenue or partnering opportunities and become obsolete.
