How do customers place an order for your products and services? Do they
- shop online through your ecommerce store?
- call your customer service line?
- call your sales team?
- buy from a reseller?
- go to the store?
The process after a customer places an order is classically known as Order Management, or “order-to-cash.” After customers place an order, now it’s your turn to fulfill that order, invoice the customer, process the payment, and recognize the revenue from that purchase.
Here’s the thing – the role of order management has changed. The technology that powers order management hasn’t.
Ten years ago, companies like Adobe, Apple, and Microsoft only let customers make one-time purchases. That means, a customer would place an order for a certain Quantity of a Product. 10 songs for $0.99 per song on iTunes meant you placed a single order for $9.90 (plus tax).
With the rise of SaaS and subscriptions in many industries, companies today think differently about order management. If you’re signed up with Amazon Prime, Zendesk, Pandora, Adobe Creative Suite, and other subscription offerings – you don’t just make one-time purchases. Instead, you have the option to constantly subscribe, upgrade, downgrade, pause, and change your subscription over time to suit your needs.
For example – an order form for software 10 years ago probably looked like the left-hand image. However, an order form for software today looks more like the right-hand image. Customers can now take multiple actions on their subscription over different periods of time.
Each of these different order actions has implications on billing, provisioning, revenue recognition, metrics, and accounting. Net, net – it gets extremely complex.
Companies that have figured this out have thrived. By figuring out how to automate these order management dependencies, successful companies are able to offer their customers more flexibility and a seamless customer experience.
That’s the problem we’re solving at Zuora.
We’ve designed a modern order management solution for subscription companies so that you can offer customers the flexibility to sign-up, upgrade, downgrade, pause, resume, and more whenever they want.
Over the years, we’ve refined our approach. We didn’t copy existing ERP solutions or other order management systems out there. We’ve architected our platform completely differently because order management is completely different in this new world. ERPs don’t solve for this.
Introducing Zuora’s new Subscription Orders Engine.
There are 5 key things you need to know about the new Subscription Orders Engine:
Your customers can submit orders from multiple channels and capture them in Zuora.
- Submit quotes and orders through Salesforce
- Submit orders from ecommerce webstores, partner portals, and other channels
- Submit orders through our completely new user interface in the Zuora UI (see above!)
Your customers can make changes to their subscriptions for past, present, and future time periods. Whatever the change is, Zuora automates the order management impact.
- Customers can “ramp up” on your products over time with built-in, multi-year ramp contracts.
- Customers can Add, Update, or Remove Products for existing subscriptions without worrying about proration, billing, and revenue recognition impacts.
- Customers can Renew or Cancel subscriptions anytime.
- Customers can Transfer Ownership of their subscription without losing the history of that existing subscription.
Your customers can now make multiple changes to multiple subscriptions in a single order.
- No need to waste time creating multiple orders in your system. Every customer interaction is captured in a single Order, no matter how many changes the customer requested.
You’ll get very granular metrics out of Zuora. More importantly, you will need those granular metrics for ASC 606 and the new revenue standards.
- Metrics like Monthly Recurring Revenue (MRR), Total Contracted Value (TCV), Total Contracted Billings (TCB), and others are calculated for every order action.
- You’ll have an aggregate view of the business – you can slice-and-dice your bookings, billings, collections, and revenue by day, month, quarter, business unit, and more.
- These metrics are extremely important for ASC 606 and IFRS 15. Zuora’s data structure gives you those metrics out-of-the-box – no excel spreadsheets necessary.
You won’t need to worry about manually updating billing, collections, revenue recognition, or reporting.
Order management has changed. You simply can’t offer subscriptions unless you are able to find your way around this new role of order management. That’s why we’re extremely excited to introduce the new Subscription Order Engine in Spring ‘18.
If you’re a customer and want more information, reach out to your Customer Account Manager.
Not a customer yet? See how you could be running your dynamic order-to-cash process on Zuora Central.