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.
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.
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