Revenue Recognition Summit was founded with the goal of bringing Finance and IT professionals in one room to provide education on ASC 606 and beyond. Now, in year two of the summit, we’re digging even deeper on the new revenue recognition standards, both during implementation and what happens after adoption.
On the main stage, the conference opened with SVP RevPro at Zuora, Jagan Reddy, joined by Zuora CEO Tien Tzuo; Elle Kuvveti, Sr. Director, Revenue Management at Salesforce; Sergey Zhurbilo, Director of Revenue Management at Salesforce; and Jeff Johnson, Revenue Recognition Automation and Technology Leader at EY to discuss ASC 606 implementation practices, revenue operations beyond adoption, and how these new standards relate to the Subscription Economy.
In breakout sessions throughout the day, partners and customers opened up about the challenges of implementation, the truth about disclosures, aligning pricing and revenue, preparing incentive compensation plans for the new revenue standards and more.
Here are just a few highlights from a great day one of Revenue Recognition Summit 2017:
“We predicted that the era of ERP is coming to an end. This is resonating with people today. CEOs and CIOs are getting tired of spending $20-30M to upgrade their ERP and get no return on their investment. If you believe that we’re shifting away from a business model where we’re selling products to selling services, ERP were built for a product-era: to design, build, and ship products. These things are less important for companies. In new world where you are providing a service, ERPs don’t help you: pricing and packaging, designing a really good customer experience, access subscription metrics, etc. ERPs were built for standardization and scale — that’s all.” – Tien Tzuo, Founder and CEO, Zuora
“There’s a shift in business models, a shift in accounting departments. All this is driving all the finance changes that are going on. The finance function is changing.” – Jagan Reddy, SVP RevPro at Zuora
“Who are the people in the company that can drive the new subscription business model? It’s got to be finance because who owns the business model in the company? The finance function. Finance isn’t about counting the beans and putting them in the right bucket and the right ledger. Finance needs to lead the revolution. Finance is the hero of the subscription economy story.” – Tien Tzuo, Founder and CEO, Zuora
10 years ago, IT was seen as the Dr. No of the Business. Today, with the cloud, IT has become agile and responsive. Now Finance is at risk of becoming Dr. No because you are being held back by monolithic solutions which leads to real risks. It creates chaos when you don’t have the right systems or enough people and you have change heading towards you.” – Jagan Reddy, SVP RevPro at Zuora
“RevPro is business freedom: freedom from spreadsheets, freedom to adopt any monetization model, freedom from human error, freedom from compliance failures, freedom from restatements, freedom from earnings delays.” – Jagan Reddy, SVP RevPro at Zuora
“You can sit there in spreadsheets trying to fix your data all day long, but you have to just start shoving it through the system. You do as much clean up as you can and then you keep shoving it through until you get clean results. You’ll never know your data well enough to think about every scenario that will happen and how that will interact with your integration.” – Sergey Zhurbilo, Director of Revenue Management at Salesforce
“When you talk to IT, the assumption is always that you can add more people. But everyone in rev rec knows that it’s very hard for you to add more people. It’s really technical, a high expertise area. You have to know the company really well. So you want to make sure that you have good people who know the system, and get them involved as early as possible.” – Elle Kuvveti, Sr. Director, Revenue Management at Salesforce
“Data analysis is the most important part of ongoing operations: evaluating consistency, identifying abnormalities, and trapping errors. Adequate skills and tools are needed to perform analysis efficiently and effectively. New or enhanced control, standard operating procedures, and discipline may be necessary to institutionalize data completeness, accuracy, and consistency.” – Jeff Johnson, Revenue Recognition Automation and Technology Leader at EY
“Key takeaways for ensuring controls and disclosures are not an afterthought: Develop a disclosure strategy, create a plan for new data requirements, define new reporting systems/process needs, monitor early adopter disclosures…and most important of all…just get started!” – Jackie Lyons, Senior Consultant – CFO, Controller, Revenue Recognition ASC 606 for RGP
“Think about your 2.0. You don’t have to automate everything on release one. That may be just too much to bite on. If you’re implementing an ERP you wouldn’t try to put every piece of functionality into the first release. Strategy, planning, thoughtfulness — build your plan.” – Bryan Urquhart, Program Leader RGP
“Without connection between teams, revenue recognition can become misaligned with business strategy. In revenue, it’s NOT easier to ask for forgiveness than permission.” – Jennifer Meehan, Manager Technical Accounting, RevPro
“The fact that new standards are coming into play is a great catalyst to adopt new standards, but it’s also a great catalyst to adopt new processes, where teams start working together much earlier on a regular cadence.” – Monika Saha, VP Product RevPro
“A lot of our determination we had to factor into our go-to-market strategy. When we sell to customers, at the end of the day, we’re selling a bundle. It may come up as different lines on an invoice or order, but the items are so related to each other you wouldn’t buy them without one another. The nature of what we’re selling played into our determination.” – Joel Moore, Senior Technical Revenue Manager at FireEye, Inc.
“When do you decide to turn off your first salesperson from compensation and turn on your customer success team? That’s modeling, and then determining what works best for your business.” – Phillip Kaszuba, Vice President Sales and Marketing at Obero SPM
“When you’re feeding data into your system for ASC 606, you’re probably going to do it in bulk – shove a month full of data into the system at once (or two months, or a year). How is the system you’re feeding it to going to consume that data? Converting historical data, will the code consume it in the right way. For 606 the biggest thing you have to think about is contract modifications. If you’re putting all that data into the system at once, the modification and original deal may be going in at the same time, but you need to make it as though they were going in in sequence.” – Kevin Eckhert, Director of Revenue, SFDC
“You have to take into consideration Wall Street, what analysts are looking for. If they’re not expecting a big change and there is, you have to explain it.” – Janette Falls, Vice President, Revenue and Order Operations at Fortinet
‘When we initially planned this project out, we thought we’d start with requirements to simplify what we don’t know and de-risk the project, but along the way we realized there are pieces of the business that we just don’t know yet. So change management turned out to be a very large part of our delivery.” – Ashish Sharma, Senior Manager, Program Management – Finance at Electronic Arts (EA)
“This is more than a revenue standard, it impacts other things in the business. At the end of the day it’s not an IT project, it’s a business transformation program.” – Ashish Sharma, Senior Manager, Program Management – Finance at Electronic Arts (EA)
Learn more about RevPro, the world’s leading revenue recognition and forecasting automation solution.
And stay tuned for more from day 2 of #RevRecSummit17!