5 tips to make goods-as-a-service a success

Despite the promising signs of an upturn in the economy, nobody expects a reverse of the ‘subscription revolution’.

The transition from selling products to providing a service has helped many businesses during recent leaner years, by providing much-needed predictable revenue streams and more valuable long-term customer relationships.

Now the benefits of providing goods-as-a-service are clear, it looks likely that more traditional organisations will change their business model – and more start-ups will adopt this approach from the outset.

After all, its adoption enables the agility needed to address fast-evolving market conditions, changing pricing and service packages in response to customer demand.

As economic growth accelerates, competition is bound to become more intense. To remain successful, businesses need to develop and monetise new services – and take them to market quickly.

However, although many recognise the potential of doing this, there are some barriers to change, not least traditional on-premise accounting systems, which tend to inhibit fast and decisive action in response to evolving demands.

>See also: Does the future of outsourcing lie in a purely electronic marketplace?

Many retailers with stock, inventory and financial systems set up for one-off payments need to make significant changes before they can introduce and administer a scalable subscription service.

So how can these barriers be overcome?

1. Introduce cloud billing

Legacy on-premise systems just don’t provide the flexibility needed. They are also expensive and can take years to implement, configure and integrate with other applications. This all means that too much capital is spent before any business benefits are achieved. On the other hand the implementation of cloud billing is typically a matter of days or weeks, and can be done in-house without expensive consultants.

2. But be aware – there’s cloud billing and there’s cloud-based billing

Cloud-based billing is typically a standard, on-premise billing product hosted somewhere in the cloud. It would be better described as ‘cloud hosted’ and is unlikely to support the core principles of software-as-a-service (SaaS). If a vendor can’t offer you a free trial, it’s probably only cloud-hosted. Also look for how easy it is to import and export data, as well as regular automatic software updates rather than major system upgrades.

3. Have a long-term strategy

You may only be charging £10 for a straightforward subscription today, but who knows what you will need in the future? If your services take off, you could soon be looking for sophisticated, granular, event-based pricing. So first seek out solutions that cater for a mix of subscription and consumption models and can manage both B2C and B2B services. Then ask about scalability, checking that your preferred solution can grow with you and support performance demands as they evolve.

4. Be comfortable about security

Key questions should be asked about where data will be stored, how it will be protected and contingency plans. Look for providers that offer flexibility about where data will be hosted.

>See also: Half of businesses are plagued by regular IT issues

5. Think about mobility

Cloud applications should be accessible from anywhere and on any device. So whether it’s for executive management access to KPIs or being able to take new sales orders in the field, make sure that your cloud billing system works natively on iPad and other tablet computers, supporting fast and informed decision making.

In the new service-based environment, billing shouldn’t be a barrier – but rather an enabler. For every innovative idea, there’s often some back office reason why it doesn’t happen. Don’t let inflexible billing be the reason to let the subscription revolution pass you by before you have a chance to profit.


Sourced from Louis Hall, CEO, Cerillion Technologies

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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