What is the connection between the digital economy and flexible billing software? Let’s start by discussing the ‘what’, ‘why’ and ‘how’ of the digital economy – what it is, why it matters to businesses, and its effect on billing.
What is the Digital Economy?
Coined by Don Tapscott in his book titled The Digital Economy: Promise and Peril in the Age of Networked Intelligence, Tapscott described how the Internet and the digitalization of information could change the way business is done. Encompassing the worldwide network of economic activities, commercial transactions, and professional interactions that are enabled by information communications technologies (ICT), the digital economy is based on digital technologies and the interconnectedness of people, organizations, and machines that have been made possible by the Internet, mobile technology, and the Internet of Things (IoT).
The digital economy continues to be the driving force for the transformation of industries, business models, and day-to-day operations. While it has disrupted many businesses and sectors, it has also given rise to new ones.
Think of Uber, a company that provides taxi services without owning any vehicles. Similarly, Airbnb offers rental of vacation homes but does not own any real estate. Lastly, Facebook is the world’s largest social media company, yet does not produce content.
Why the Digital Economy Matters to Businesses
The digital economy removes traditional boundaries and provides the opportunity for new businesses to flourish, as well as giving existing enterprises the ability to re-imagine their offerings and business model. As technology continues to advance at breakneck speed, companies need to re-examine their strategies and processes for the insights needed to harness the power of the digital economy.
Embracing the digital economy means using technology to complete tasks and activities faster and better (or differently all together). As the digital economy continues to weave its way into the day-to-day lives of consumers and businesses, companies need to make changes to the way they interact with customers, the products and services offered, and their business models.
There are more than a dozen digital business models, but we’ll focus on the three that are most frequently used by subscription-based and software-as-a-service (SaaS) companies.
One of the most used digital business models and popular with SaaS organizations, it provides users with free access to a basic version of the product. While it can help businesses quickly acquire customers and build brand awareness, revenue generation depends on customers upgrading to a payable version of the product that provides higher quality, contains more features, etc.
Popular among companies that offer content, software, and membership programs, this digital business model provides customers with access to products, services, updates, etc. for a monthly, quarterly, or annual fee. This business model makes your offerings more affordable to customers and prospects and enables organizations to optimize recurring revenue.
Used by media and content providers, as well as companies that sell their offerings based on a usage or metered basis. This model enables customers to pay for only what they use, providing pricing transparency, while delivering a steady revenue stream to organizations.
Becoming a digital-friendly business requires persistence, change, and flexibility within every department of the organization and nowhere is this more important than your billing processes. This is where flexible billing software can be a game changer for your business growth.
5 Reasons Flexible Billing Software Is A Must In The Digital Economy
Billing, especially flexible, cloud-based billing solutions are the key differentiator for companies who can quickly bring new products to market, accurately bill for their products and services, and deliver the digital experiences customers expect. Let’s explore the top five reasons flexible billing software is essential for businesses to thrive in today’s fast-paced digital economy.
1) Launch new offerings and services faster
The digital market advances at lightning speed, and to remain competitive you need to launch new products, services, and bundles faster than the competition. Flexible billing software enables you to quickly bring to market an unlimited number of offerings. In addition, the system will have the ability to support a variety of billing use cases such as one-time charges, subscription billing, recurring billing, usage-based billing, dynamic billing, hybrid billing, etc. – all on a single platform.
2) Generate new revenue streams
It’s estimated there are 14.4 billion connected IoT devices and that’ll increase to 25.4 billion by 2030. This exceptional growth will provide organizations with the opportunity to offer new products and services. To bill for these new offerings, companies will need the ability to process, normalize, and bill for the data collected from IoT devices and machine-to-machine (M2M) systems.
3) Transform billing into a value-added function
By providing a reduction in operation costs, scalability, less maintenance, flexibility, and being future ready, platform-as-a-service (PaaS) billing systems transform the very nature of billing. What was once a costly back-office, post-hoc process (think capital expenses for hardware and software, operating expenses, and unplanned direct and indirect costs) can be pushed to the front of the customer experience, personalized, and even monetized.
4) Improve security
Customers expect that their data is protected and kept confidential and this is especially important in the digital economy. While on-premise billing solutions may provide more control over data, they are more prone to cyber-attacks and data breaches. The best cloud-based billing platforms provide enhanced security such as:
- Following the PCI security standard for credit card payment processing and offering KDIM protocol for emails sent from the billing system
- Ensuring your revenue recognition aligns with ASC 606 and IFRS 15
- Providing the ability to maintain internal controls over financial reporting and ensuring the privacy of customer data with SOC 1 & 2 compliance
- Securing customers’ payments and personal information with compliance to PCI and GDPR; encrypting sensitive and user-defined data prior to storage by adhering to FIPS 140-2 encryption Level 2 and Level 3 standards
- Providing application-level encryption, role-based permission, advanced approvals, and enabling sharing groups to manage groups and records access
4) Improve the customer experience
Today’s digital customers have high expectations and churn faster than ever before. A single poor experience can send customers to the competition and put your business at risk. Customers expect you to know them, their preferences, and quickly respond to their needs. With cloud-based, flexible billing software you can automate communications and exceed expectations.
The digital economy demands that enterprises have systems and infrastructures that are nimble and flexible to support our ever-changing global and technology paradigms. From a billing perspective, companies need a fast and efficient billing system that is agile enough to not only passively handle digital disruption but embrace and benefit from it.
Transform the Way You do Business with a Flexible Billing Platform
Today’s most successful businesses frequently evaluate and adopt new technology. This includes flexible billing software to help them transform the way they do business. BillingPlatform’s cloud-based platform gives enterprises the power to control how they manage and grow their revenue.
Our end-to-end solution is purpose-built for exceptional agility. It allows you to adapt quickly to the changing digital economy. From product inception to revenue recognition – you’ve got a complete solution.
With us you get tomorrow’s billing platform today, giving you the ability to bring new products and services to market faster. You’ll also reduce operational spend, turn ideas into revenue, and deliver the experiences that drive customer loyalty. Get a free two-week trial of BillingPlatform today and see what makes us different.