build vs. buy: a new look at the classic it dilemma
DESCRIPTION
See how CIOs can deliver the agile pricing, customer acquisition and revenue forecasting capabilities your enterprise needs to test new business models and successfully compete in a world of continuous disruption.TRANSCRIPT
Slide 1 − Zuora Confidential, not for distribution beyond intended recipientSlide 1 − Zuora Confidential, not for distribution beyond intended recipient
A New Look at the Classic IT
Dilemma
By Travis Huch
Build vs. Buy
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• The Disruption is here
• The CIO is under pressure
• Change is happening – The Five
Kinds
• The business case for agility in
pricing
• Solution components & the cloud
stack
• Summary and recommendations
Agenda / Let’s Make this Interactive
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Disruption is Here
3
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CIOs Are Under Pressure
“We spend 80% of our budget maintaining the old legacy stuff we need to keep. We can’t just unplug it.”
AND
“Our only competitive advantage today is speed”
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The Five Kinds of Change
Launch Pivot Scale
B2Any or Usage BasedM&A
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It Looks Easy to the Business
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Billing
Gateways
Fulfillment
Provisioning
Immediate or delayed payment
Connect to CRM
Notification
Connect to accounting
Self service vs assisted flows
But it’s Harder Than It Seems
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The New Pricing Lifecycle
The pricing lifecycle is shorter than ever before
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And you are layering in more services
• Personalization / Customization
• Remote monitoring and updates
• Compute and storage
• Monitoring and contextual services
• Collaboration and sharing
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All These Changes Are Too Much
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THE Textbook Case for Pricing Agility
11
• MCI announced The Friends and Family Plan
• AT&T was unable to respond for 18 months
• MCI’s revenues went up 11% while AT&T lost 8+% market share
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The Modern Example
12
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When was the last time you changed your
pricing?
13
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Now You Know You Need to Change
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But What Kind of CIO Are You?
15
“We build things that are part of our core competence”
“It’s a simple ROI calculation to figure build vs buy”
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The Emergence of The Business Innovator
16
“We extend and future-proof our architecture by using best of breed components”
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“As-Is” Solution at First Contact
43% of companies who elect to build commerce billing and payments come back within 2 years
49%
31%
18%
2%
Commercial accounting systems
Built home grown system
Replacing a commercial billing system
Completely mannual
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How Do I leverage what I have?
18
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The New Cloud Stack
19
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There Are Really 3 Parts of the Problem
Product Catalog Pricing
Web OrderSales-Assisted Order
Upsell / Cross-sell
Invoices Reciepts
Credit Card PaymentRefunds
Partial PaymentsBalances
Service Rating & Billing
Secure PCI Payments
Commerce Billing & Payments Finance
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Plugs into your ecosystem
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It all starts with the right data model
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Companies that Built then Bought
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Common Themes Post Go-Live from our Enterprises
We’re more agile in our approach to pricing and onboarding customers
Our engineers have been deployed to things that are higher value things that are closer to our wheel house
We were able to meet the deadline for launching the new SaaS product
We maintain the onboarding and provisioning flows, and Zuora manages everything else
“
”
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Infinite pricing options
Things you need to Consider before Building1. What is the risk of building (accuracy,
leakage issues)
2. Will you need to support the numbers in an audit?
3. Opportunity Cost = $600K per year in additional rev
4. What is the timeline goal that this is tied to?
5. How will this functionality need to change over time?
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Summary
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• Most companies don’t have unique requirements when it comes to core billing and payments
• Deploy dev resources on things that give you a competitive advantage and differentiation
• Agility = Revenue. Ability to change pricing quickly is a requirement in today’s market
• Let us provide you an assessment of what it would take to meet your use cases based our experience
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Thank You! [email protected]
@travishuch
Let me know if you are interested in participating in
our “What is the Ideal Enterprise Architecture?”
panel discussion at Subscribed 2014!