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New Recurring Revenue Benchmark Research from Ventana Research Reveals Business and Technology Best Practices

Independent market research examines best practices, benefits and trends of a business model that enables organizations to maximize the value of customers.

Bend, OR / Jan 22, 2015 6:00:00 AM / by Ventana Research

SAN RAMON, CA, January 22, 2015 - Ventana Research, which provides research-based best practices and business insights on the strategic and operational uses of technology across business and IT functions, today released its latest market research into recurring revenue. Pioneered by telecommunications service providers, the recurring revenue business model involves periodic sales and billing transactions based on a prior agreement; it has now been adopted across an array of industries including software, entertainment and the delivery of other digital services.

This new research, the first independent, rigorous primary research to be undertaken in this area, makes clear that organizations increasingly are choosing to adopt the recurring revenue model to increase revenue and improve their customers' experience. Moreover, the findings make clear that it works: Those companies that use it successfully report that they perform above their targets in revenue and customer growth metrics.

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Among those that use a dedicated system for recurring revenue, 86 percent report some degree of satisfaction with it, compared to lower percentages for those using a custom system built in-house (73%) or an ERP system (70%). That greater satisfaction includes having invoices available in various forms (69%), billing requiring less effort than previously (65%), being able to produce accurate and complete analysis (63%) and having end-to-end support for the recurring revenue process (58%).

However, the research makes clear that organizations need to adopt effective technology to support recurring revenue. The most significant technology challenge organizations reported facing is the integration of systems - most critically with sales force automation, ERP, and contracting, billing and accounting systems. In addition, the research shows that more than four of five organizations view advancements in analytics as the most important innovative technology category for improving their recurring revenue business.

An organization's finance function plays a key role in recurring revenue, with Finance responsible for identifying (41%) and evaluating (54%) new systems. The research quantifies the roles other functions play in ensuring that the process and application requirements are adequately addressed.

The research examined levels of performance and satisfaction with recurring revenue processes and the systems used to support them. "Only a third of organizations are satisfied with the systems they use to support recurring revenue," said Mark Smith, CEO and chief research officer, "and for most their lack of satisfaction is due to functionality, flexibility and lack of integration issues. With only 18 percent of organizations operating at the peak level of performance that we call Innovative, there is much to address - from the skills and operational efficiency of people to the information from the analytics and data used in systems to support recurring revenue processes.

"This research, Smith added, "for the first time provides the indicators for successful application of best practices and the technology bottlenecks that must be addressed for a company to be efficient in the life cycle of customer interactions related to purchasing, onboarding and paying for services."

Those interested in learning more about the benchmark research results can do so at www.ventanaresearch.com/recurringrevenue. The research was sponsored by Aria Systems. As a leading business technology research and advisory services firm, Ventana Research provides access to a free copy of the executive summary of the research report.

About Ventana Research

Ventana Research is the most authoritative and respected benchmark business technology research and advisory services firm. We provide insight and expert guidance on mainstream and disruptive technologies through a unique set of research-based offerings including benchmark research and technology evaluation assessments, education workshops and our research and advisory services, Ventana On-Demand. Our unparalleled understanding of the role of technology in optimizing business processes and performance and our best practices guidance are rooted in our rigorous research-based benchmarking of people, processes, information and technology across business and IT functions in every industry. This benchmark research plus our market coverage and in-depth knowledge of hundreds of technology providers means we can deliver education and expertise to our clients to increase the value they derive from technology investments while reducing time, cost and risk.

Ventana Research provides the most comprehensive analyst and research coverage in the industry; business and IT professionals worldwide are members of our community and benefit from Ventana Research's insights, as do highly regarded media and association partners around the globe. Our views and analyses are distributed daily through blogs and social media channels including Twitter, Facebook, LinkedIn and Google+. To learn how Ventana Research advances the maturity of organizations' use of information and technology through benchmark research, education and advisory services, visit www.ventanaresearch.com.

Media: Copies of the Benchmark Research report and analyst interviews are available upon request.

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