How does the next generation of quote to cash solutions improve upon the customer experience and what impact does it make?
We sat down to talk to Sandeep about the ongoing transition of business models and the Medium article he wrote on “ Why Quote-to-Cash (Q2C) has become so Hard”. Below is an excerpt from what Sandeep has to say about CPQ.
What inspired you to write the Medium piece around why quote to cash processes have become so hard?
Serendipity. Someone told me that their billing system was broken while I was examining the state of customer support. This piqued my curiosity and I started to look into some of the leading players in the space.
I learned that billing systems don’t work in isolation; they tie back into the CPQ system for the quote, CRM for the business relationship and an ERP to record the transaction. It’s like peeling different layers of an onion one by one. I met with people designing these systems, as well as the vendors that provide the tools and technologies as well as system integrators that bring everything together.
You referenced a company that claimed to spend over 300 million dollars to fix their quote to cash process but ended up being disappointed with the results. Why do you think this still happens?
80% of the problem would be solved by simply having the two teams work with one another to bring Billing and CPQ together.
The problem still happens because of structural inefficiencies in IT organizations. Sales wants to speed up quotes while finance wants to improve billing. These solutions are often scoped and implemented in isolation of one another, with different IT teams responsible for their implementation.
Selling has changed. It’s not a one-time job anymore. We have subscription selling and dynamic sales bundles. As new bundles evolve, those subscriptions change, and the system that was put together by two different vendors and systems integrators falls apart because the two parties were not aligned.
A Customer’s QTC success is everything. Statistics published earlier this year show customer churn for some vendors in excess of 30%. What questions should customers be asking of their vendor to avoid these failures?
Questions about retention came up frequently in my research. Most of the companies that I talked to were trying to standardize on a single platform, and the pain point with these solutions was often very high.
I think the answer to your question is simple, and I don’t know why everybody isn’t doing it. Maybe it’s because there are different structural teams who deal with the problem. Customers and vendors need to realize that your CPQ and Billing are two sides of the same coin. There needs to be one entity that understands the end-to-end way that you sell today. What are the sales and accounting processes? How does the company make money? Your requirements will flow from there.
The lines between B2C and B2B have blurred with the consumerization of enterprise software.
Customers now expect ease of experience across the board, it should be easy and intuitive just like my B2C apps. At the same time, there’s the “cycle of innovation”. After a period of time, pundits call a space “dead” until someone takes a new crack at reinventing it. Case in point: web and video conferencing. Critics were proven wrong when Zoom entered the scene.
Quote to cash is a key part of delivering on that customer experience, yet a lot of businesses’ hands are tied as they need to go back to IT to create new solutions because the solutions are hardcoded and can’t be configured by the business user.
Products and experiences are changing and evolving faster than ever. Hardcoded CPQ solutions can’t keep up with the rate of change. The business is not in control of their own destiny and hostage to the IT organization. What insights do you have to take back the driver’s seat?
Talking to different people there’s the story about an elephant and six blind people trying to touch different parts of the elephant and trying to figure out what the heck it is. I see a similar situation within Quote to Cash. If you go to the companies and ask them what’s your quote to cash process? Nobody truly knows all the key ideas of how all of the systems work together in the process.
Quote to cash allows a business to exist and make money.
But vendors and the tools haven’t done a good job of creating a swiss army knife to take any process and do that work efficiently.
It’s a combination of customers not knowing what they need and how things are being done today and tools’ that don’t scale well that lack flexibility.
Businesses need to optimize for simplicity in their workflow and processes – but I was surprised to learn that it’s anything but with everyone that I interviewed and talked to.
You talked about designing a scalable enterprise architecture of a solution from day one around the needs of an enterprise versus a start-up designing for the mid-market and then trying to go upstream.
I found that interesting as servicePath took the path around first designing for the needs of the enterprise. Can you expand on that?
‘Start-ups need to make revenue quickly, so they tend to solve easy problems first’.
‘The problem is the product that they come up with solves the “small to medium” needs and doesn’t translate well to the needs of an enterprise.
The enterprise requires a completely different set of design principles, and it’s not easy to do from day one.
Retention rates are high in software, but less than the industry average within Quote to Cash.
What would you say about a company that has 100% retention in its customer base over the past 2 years as a result of their domain expertise and best practices around implementation?
And one that is willing to guarantee their customer’s success should they be a good fit to work together?
I did not come across anyone who has had that kind of retention along with “customer happiness” at the same time in my research.
It could be a refreshing pitch for customers or buyers who are used to evaluating solutions only to realize that they don’t work.
It’s a tall claim to make, but a bold one too – especially if they can guarantee success in CPQ and billing.
You talk about the opportunity to bring domain expertise and specialization into a vendor approach rather than going broad, horizontally, across all verticals.
A tool may not be able to serve all needs across different industries, and specialized tools that to do both billing and configuration for a given industry vertical have a big opportunity in the market.
We just announced a partnership along that very line with a leading billing platform to provide a best of breed quote to cash solution
LogiSense and servicePath form Strategic Alliance to address the needs of technology companies for agile Billing and best of breed Quote to Cash solutions https://markets.businessinsider.com/news/stocks/logisense-and-servicepath-form-strategic-alliance-to-address-the-needs-of-technology-companies-for-agile-billing-and-best-of-breed-quote-to-cash-solutions-1028669648
Last but not least, what are you working on in customer support?
I started my own podcast on customer support where I talk to leaders in support and ask them what is and isn’t working. There is a lot of focus from CEOs to the board of directors; they’re looking at how you’re running your support. The rise of terms like CX (customer experience), NPS (net promoters score), and Gartner’s CES (customer efforts score). The expectation now is that the vendor should know what problems the users could have before having to call for support.
About Sandeep Jain
Sandeep Jain is the Founder & CEO of Leela Labs, a podcast search platform. Sandeep launched his own podcast this year called “The Customer Support Podcast”. Prior to launching Leela Labs, Sandeep worked in Product Management, Engineering, and Business Development with companies like Juniper Networks, Cisco, Palo Alto Networks, and Microsoft.