Mind the Gap – The Leakage Happens in the Gap!


Prasanna Deshmukh, Chief Product Officer

xfactrs Mind The Gap Blog

As I start my journey as a Chief Product Officer with xfactrs, I am starting to talk with our customers about the value of xfactrs products and how it can identify the revenue leakage in the quote to cash processes. Analysts estimate that the revenue leakage could be anywhere from 4-25% depending on the stage of the company.

This statement is met with disbelief as it seems improbable. The leakage is always in the gaps between the systems, processes, and organizations.

There are broadly speaking two classes of issues in any best-of-breed business systems responsible for all lead-to-cash or issue-to-resolution processes. Either the fault is within one of the core applications (such as CRM, CPQ, OMS, ERP, etc.) or the fault is within the integration across the applications. There is always a loss of fidelity as data flows across the system. A fault that is within an application will have an impact on the overall business but typically there’s a clear owner and enough diagnostic information to resolve it. When the fault is due to integration with potentially the origin of the issue north of the impacted application, it may not be diagnosed and resolved promptly. This will impact either the revenue or spending. Xfactrs product focuses on this gap across applications where either systems, processes, or policies lead to leakages impacting the subscription business systems.

Let’s take the example of a product-led growth business model. A product is available for a user to download and use for a trial period. At the end of the trial period, the user either gets a free version or the trial subscription ends. All very simple and shouldn’t be a cause for any leakages. Internally, this could be implemented as a lead into the marketing application and integrated with the SaaS product and billing system to control activating, terminating, or converting to a free version. This is where one needs to mind the gap. The entire process may work minimally through three organizations Marketing, IT, and Cloud/SaaS Engineering and their respective systems and processes. If the trigger event for conversion/termination doesn’t happen for whatever reason, then the disconnect between the billing platform and the SaaS product creates an incongruent state for that free subscription. The user may continue to use the product beyond the trial period causing revenue leakage.

But wait, there’s a best-of-breed BI analytics platform that is deployed. A typical scenario in the BI systems implementation is to highlight the marketing funnel. It will provide you with the total number of leads, trials, and converted customers. If the conversion rate meets business objectives, all parties will be satisfied. The information that has not surfaced is the number of customers in the trial with expired subscriptions. Xfactrs focuses on these types of issues where we examine the state of subscription across systems to identify the gaps and their impact on the revenue.

The best-of-breed systems deliver value to each of the functions but can lead to integration challenges. The speed for delivering SaaS products and sustaining lofty growth targets can deepen the gaps. Xfactrs will mind the gaps for your business and provide the visibility to resolve revenue leakage caused by the gaps.

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