Recently, there’s been a flurry of interest and calls to revive the U.S. manufacturing industry. Yet many research studies all suggest CFOs have already moved beyond manufacturing and selling goods.
Today’s CFOs are not looking to expand their manufacturing portfolio, but are redirecting their companies to deliver products as-a-service. Software and infrastructure, grooming products, news, music and movies, and even food and wine are all being delivered as services with customer subscriptions creating new recurring revenue streams. Where are you in the mix and are you ready for it?
Take Amazon for instance. It sells physical goods on behalf of companies (most of the products are not manufactured in the United States), yet much of its revenue comes from Prime memberships, and the delivery of food, video, music, and books – all products as-a-service.
In adding services into the mix, product-based companies can work to keep their customers from falling into a rival’s clutches, extending what used to be a single transaction into an ongoing relationship. And if you maintain that relationship properly you have set up a recurring revenue stream and a potential customer for life. If you are CFO of a product-based company without services, this is your opportunity to add a new business model to the fold. But there are many factors to consider before taking the leap. And a big one is your IT infrastructure.
Is your infrastructure set up to support this new paradigm?
The services business models have fundamentally changed how we sell, implement, monetize, account for, and serve our customers. Finding the right tools will be a huge driver for new services model success. Yet as of now, many companies have yet to make the necessary changes in their infrastructure to manage it.
Lacking the proper systems and ERP strategy could ultimately cost you. These days it’s never been more important to have your systems sync, grow, and work together to drive business value. Finance leaders need comprehensive views into the “whole account”, across multiple departments to answer real-time questions, know the context of those questions, and make smarter decisions across the customer-journey. You will want solutions that connect your ERP and CRM, allow you to maintain one customer database and be able to manage every revenue stream from a single source. Your solution should do all that while automating your revenue management and billing functions so that ultimately you can execute profitably, recognize revenue sooner, and earn customers for life.
The good thing is there are great, modern front and back office systems built for digital and service centric businesses. You can find one right here.