From product to profit: the essence of Revenue Lifecycle Management

Recently, Salesforce launched a new  Revenue Lifecycle Management (RLM) product suite built on Revenue Cloud. Actually, RLM is more than just a product: it is a concept encompassing multiple business processes around the product-to-cash domain.  These processes are often synonymous with the lead-to-cash cycle and involve terminologies such as Configure, Price, Quote (CPQ), and Contract Lifecycle Management (CLM).

In this overview article, I’ll explain RLM’s importance and benefits from business and technological viewpoints.  I’ll begin by addressing revenue lifecycle management’s key concepts, and examining how they integrate with company processes and contribute to business value creation. I’ll look at the RLM process domains and how to transform those with technology. Lastly, I’ll analyse how enhancing these processes can transform your business operations.

Additionally, while Salesforce continues to offer its existing CPQ solutions, I’ll highlight the differences and advantages of the new RLM suite compared to the predominant technologies. This article is the first in a series that will further explore these domains and technologies. In future articles, I will dig deeper into each product-to-cash domain from a different personas (such as product manager and sales) point of view.

What is Revenue Lifecycle Management?

Revenue Lifecycle Management (RLM) is a continuum of processes and solutions that orchestrate the journey from offering products to customers to securing payment (also referred to as the product-to-cash cycle). Ultimately, RLM enables companies to create and maintain product offerings efficiently, sell through omnichannel, fulfil deliveries, manage customer contracts and asset lifecycles,  create invoices, and track payments. Naturally, you can also set up these processes without investments in additional systems or process development but probably less efficiently.

You don’t need to include every process in an initial RLM implementation at the start. For example, invoicing often is not part of the pilot phase, and fully automating the collection process may not suit every industry, company, or use case. The diagram below illustrates how the RLM connects with a company’s systems, sales channels, and core processes.

As you can see, RLM integrates deeply with core business operations such as product management, sales, delivery, and invoicing. The aim is not to re-create these existing processes but to enhance their efficiency by removing manual steps, providing guidance, and generally automating processes while improving employee and customer experiences. Imagine how your company could improve and automate these processes, and how you could interact with customers via self-service channels and personalised communications.

What are the benefits of Revenue Lifecycle Management? 

You can think about investing in RLM from multiple perspectives.  As every situation is unique, the first question is which are the most important areas of improvement for your business? For example, do you want to improve internal efficiency and reduce costs? Or is providing better, more accurate, and more timely customer service more important? Or do you want to enhance customer experience?

Consider the following examples of business value creation:

Competitive situation & business models: To lead the market and offer novel services readily accessible to customers, processes, and systems must be optimised to support these goals. Through process improvements and automation, you can enable the economically feasible delivery of products and services, such as new subscription-based offerings. Just imagine the alternatives of stagnation and adherence to outdated practices that could be costly.

Increased sales: You can boost win rates by enhancing the accuracy of our quotes, providing customised recommendations, and offering self-service options. On the other hand, with improved targeting and white-space analytics based on, for example, the customer’s asset data, you can reach customers more effectively.

Customer satisfaction & value: Customers today expect immediate service and continual updates on their requests. By managing the entire process within one system, you can keep customers informed at every step, improving customer satisfaction.

Cost efficiency & increased margins: Order management, invoicing, and delivery involve numerous parties and systems. What is the total cost of these processes in your company? Imagine the impact of automating a significant portion of these processes. Furthermore, improving accuracy in the sales-to-order process could substantially increase margins by decreasing errors and changes during the downstream processes.

Regulatory requirements & audit trail: In industries burdened by regulatory demands, running the end-to-end process through an RLM system can streamline compliance and reduce costs.

As you can see, Revenue Lifecycle Management’s end-to-end vision covers business processes extensively. Setting the targets and understanding the required capabilities to achieve business value might seem complex and even scary at first. However, it’s crucial not to attempt everything simultaneously. Start with the most critical aspects by evaluating what would most improve your business outcomes.

Moreover, remember that we at Fluido are here to help. We enjoy a challenge: managing these processes and transformations is the core of our expertise. We help you analyse and enable the required capabilities to reach your vision.

How to build RLM from a technical perspective? 

Many technical solutions exist on the market to address Revenue Lifecycle Management processes. Some solutions focus on specific segments of the product-to-cash continuum, while others cover the whole spectrum. Whether these solutions consist of multiple integrated systems or a single end-to-end system, they typically include the following modules:

Salesforce Revenue Lifecycle Management covers the whole spectrum of product-to-cash processes, starting from managing the products, through sales to order orchestration and collection processes.  It  provides product-to-cash solutions for any customer of any size or industry and includes the following modules:

Since the offering is new, the future roadmap looks very interesting, with, for example, the next generation of invoicing automation (while current Salesforce Billing is still available as a separate offering).

What I find most interesting about Salesforce’s RLM solution is its composability, and headless APIs. It’s possible to quickly build a solution based on predefined templates or fully customise, for example, the pricing flows and user experience, and use RLM as the core platform for configuration and pricing, exposing the logic, for example, to ERP systems.

In the coming articles, I’ll look at each module in more detail, discussing the implementation considerations and industry perspectives. For example, manufacturers could be interested in how product catalogue management aligns with PLM. Other companies might want to learn more about contract-based subscription businesses and think about fully automating amendment and renewal cycles from sales to provisioning and invoicing.

How to get started with RLM? 

Revenue Lifecycle Management and product-to-cash projects are often transformative by nature, typically involving substantial process re-engineering. Unlike straightforward sales process implementations, where the main questions lie in guiding the sales and assuring governance and approvals, domains such as quoting, ordering, and delivery orchestration touch revenue operations. This type of project demands highly structured and stringent processes to enable successful automation.

Many companies yet to automate these key processes often lack the necessary business capabilities to carry out such transformation projects. Therefore, planning should start from a business process perspective, beginning with setting a clear vision and targets, followed by capability mapping to determine the most crucial capabilities to develop and their priority and implementation order. Although realising a comprehensive end-to-end process and achieving a long-term vision can take significant time, breaking down the project into manageable pieces will enable fast value delivery.

Then, how should you implement a product-to-cash system? There are many correct answers to this question. Every customer and every industry is different, but I can provide some guidelines based on the industry and existing landscape. The following picture outlines a few different approaches and when they should be considered:

Let’s consider a couple of the typical scenarios further:

Greenfield implementations: should you go with a big bang approach and implement an end-to-end product-to-cash process in a new system or Salesforce? This has certain advantages: you can plan the processes from the beginning, and build them just for the current business need with fewer technical constraints. In this case, the old and new systems might coexist for a while being a bit complicated to manage.

Gradual improvement projects:  in this instance you might already have an existing system built on top of Salesforce and want to gradually improve this system, for example, replacing it piece by piece. While this approach is typically much easier to start with, on the other hand, it might be difficult or technically challenging to get rid of some constraints of the current processes.

Another strategy might be starting with a proof-of-concept project. This way you could get a better understanding of how to address the business case with technological improvements and validate solution capabilities.

We at Fluido address these business and technology transformation challenges through our Strategic Advisory Services. The service is something to consider in case you’re unsure which capabilities are required to fulfil your business vision.

Regardless of the approach, having a clear vision of the end state is crucial to effectively use limited resources to deliver business value and achieve results. Choosing the right approach is vital for delivering value. If business objectives are unclear and the project jumps straight to technical design, significant time and resources might be spent on developing functionalities that don’t align with the primary business objectives.

Stay tuned for more insight into RLM

Subscribe to our newsletter to stay tuned, as we’ll be soon releasing new articles digging deeper into the RLM solutions and business processes. In the following articles,  I’ll be addressing the design and technical perspectives in more detail, starting from product and price management to revenue lifecycle management, and continuing later to sales and other process domains and use cases. The main focus of the articles is how to deliver the business value together with the technology successfully.

Meanwhile, if you have any questions you can send me a message or contact our sales. Or if you have any specific topics you’d like to hear more about, I’m happy to have some feedback.