Unraveling the Top Reasons Behind Failed Subscription Billing Implementations

Vijay Raghavan Kumar, Regional Delivery Head, Americas, North America at Synthesis Systems Inc

Implementing subscription billing is a pivotal moment that transforms a business. It profoundly affects the entire Quote-to-Revenue cycle, altering how companies sell and position their offerings in the marketplace. Additionally, it revolutionizes the customer acquisition experience, the trustworthiness and transparency of invoices charged to consumers, and the innovation behind the subscription model, which is crucial for acquiring and retaining customers.

Understanding the primary reasons behind subscription billing implementation failures is crucial. Recognizing these reasons as key success factors, rather than mere failures, can guide us toward successful execution. Therefore, in line with the key success factors, the principal causes for unsuccessful subscription billing implementations are organized into various categories. 

Scope Management

Clear scope definition, precise requirements, and prioritizing these requirements significantly influence the proposal, cost, and timeline of a project. They also play a crucial role in choosing the billing product and shaping the overall architecture. Conducting a thorough assessment and discovery before embarking on a transformation ensures that business requirements align with system capabilities and technology. Moreover, developing a future-proof roadmap concerning the scope and the intended architecture is essential.

Migration and Transformation

Baselining migrated data is a critical step. Without the correct data set related to all use cases for analysis, migration development, and appropriate scenarios, reconciliation can be negatively impacted. For instance, inaccuracies in deferred revenue balance data during the cutover period can lead to reconciliation issues. Therefore, the accuracy of the data to be migrated is paramount.

It’s essential to analyze the data model between the legacy and target systems early in the program to ensure a smooth migration development and reconciliation process. In a Brownfield implementation, comprehensive bill testing, comparative bill testing, load testing, and functional testing are crucial. The new system must provide seamless business continuity for existing subscribers, covering both functional and operational aspects of the billing solution.

After going live, post-live reporting and checks are vital. The stabilization period, usually the first 4-8 weeks, must be well-designed, planned, and managed. This period is when major production-grade defects and data issues are resolved through fine-tuning. Thus, implementing a robust auditing process during and after the stabilization period is imperative for success.

Integration with Third Party

Billing implementations encompass the comprehensive Quote to Revenue processes, making them critical missions with significant revenue implications. These implementations require essential integrations with CRM, payment systems, fulfillment systems, financial systems, and intelligence reporting applications. The success of the overall program greatly depends on the integration with, and reliance upon, third-party systems from both technical and program management perspectives. A key challenge is the lack of a thorough understanding of third-party system readiness, where the stability of these third-party systems can have a substantial impact on the overall program’s success.

Billing Product Selection

Selecting the appropriate subscription billing product is a topic of great interest due to its significant impact on the success of a billing implementation, and there is no straightforward rollback or post-selection mitigation possible.

The process begins with a Functional Product Fit Gap Analysis, assessing the product’s fit against regulatory and compliance requirements, and selecting the right subscription billing product for the supported use cases/scenarios. Opting for a SaaS billing product that lacks necessary features results in additional customization and changes to the business process. The maturity of the subscription billing platform is critical.

For the SaaS billing solution’s scalability, it is crucial to understand the ability to handle the customer base, including the number of subscribers, bill cycle window, usage processing, and order cycle time, especially for migration/cutover and functional parity for use cases.

Additional product selection parameters include the product roadmap, investment in the product, and the long-term view of the product, which are essential for selection. Support structures for the subscription product, product stability, patch schedule, and the financial stability of the product company are also important factors to consider.

Program Management

Understanding a practical timeline and adopting a multi-phase approach significantly affect the success of any program. It is critical for the project manager of the System Integrator (SI) to establish a realistic and mutually agreed-upon project plan and timeline. This requires strict discipline, a spirit of unity within the team, and a willingness to accommodate various interests and resolve conflicts.

Defining RASCI (Responsible, Accountable, Supporting, Consulted, Informed) roles and accountability among the teams from the customer, partner, and product company is among the most challenging tasks for a project manager. Setting clear expectations and ensuring that all parties involved from different companies work in unison demands extra collaboration from individuals across various cultures, companies, and backgrounds. The stronger the collaboration and the more unified the team attitude, the greater the likelihood of success.

Change Management  

Effective change management is recognized as one of the most significant factors for the success of billing implementation projects due to its enduring impact on the return on investment of the solution implemented. The failure of a billing solution is not only about missing live launch dates, poor migration, or overrun costs. True failure occurs when there is a complete lack of adoption within the organization.

Change management encompasses numerous dimensions and considerations. It extends beyond mere training to encompass the entire organization’s adaptation to new workflows in sales, engineering, finance, and support. It involves acquiring new types of talent, configuring products differently, and accessing novel systems for root cause analysis. Experts in change management should be involved throughout the implementation, and change champions should be appointed within each department of the customer’s organization.

In conclusion, the same factors that can lead to the failure of a subscription billing project are also the key to ensuring a successful transformation. Managing the reasons for failure, understanding their underlying causes, and defining strategies and plans to address them is the secret to successfully digitally transforming Quote to Revenue projects.