Modernizing Order-to-Revenue: Why Businesses Must Evolve Beyond ERP Systems

Traditional OTR systems within ERP frameworks were designed for a linear, step-by-step approach, suited to simpler, one-time sales models. These rigid systems become a barrier as businesses expand into recurring and usage-based offerings, making it difficult to support new revenue models and customer needs.

Imagine a company selling office equipment that once relied solely on physical product sales. As it moves to offer recurring services, such as maintenance and consumables, a linear OTR process becomes a bottleneck, leading to delays and errors in billing and service fulfillment.

“Many non-digitally native organizations are adopting digital selling channels, creating additional complementary digital products and services, acquiring digital products companies, and adopting subscription and usage models for existing product lines, where appropriate. For these organizations, there is a need for technology and processes that will complement existing investments, not replace them. This is where the next generation of major applications will be required.”

– Stephen Hurrell, Director of Research, Office of Revenue, ISG Software Research

Here are some of the common reasons why companies need to modernize:

• Highly customized: Decades old order-to-revenue processes are heavily customized to process new business models
• Slow to market: ERPs cannot keep up with market trends like GenAI, connected services, and usage-based models
• Must move to the cloud: Cloud migration deadlines from ERP vendors are looming and companies are forced to rethink their ERP landscape
• Cost control: Often companies have large IT teams and external contractors to maintain the current ERP processes
• Cannot grow: The product-oriented nature of the ERPs often causes SKU explosions in product catalogs and reduces flexibility to add new business models
• Cannot scale: Companies have no way to scale and grow the business within a rigid and heavily customized ERP

Historically, companies have stored too much within their ERPs, often causing the system to become a catch-all for data storage and management. Reliable, real-time data is crucial for supporting financial processes and business innovation, yet only 42% of CFOs are confident in the integrity and usability of their data.

The complexities of recurring billing cycles, dynamic pricing structures, customer churn, and personalized service offerings can strain legacy ERP systems. 

In fact, 54% of CFOs agree that their legacy ERP systems are not flexible enough to meet the demands of today’s business environment. While ERPs have an important role to play in the business, and will continue to be used for key processes in supply chain, materials management, human resources management, and more, there is growing recognition that ERP systems don’t need to handle everything.

With this growing need to modernize systems by offloading major workflows and transactional data that don’t belong in the ERP, increasing cloud migration mandates make this modernization effort even more urgent. 

To keep up, companies need flexible, non-linear systems to support varied revenue models. ERP systems struggle to keep up, especially when managing complex OTR processes with dynamic pricing, recurring billing, and usage patterns.

“As currently architected, most ERP and CRM systems are static, designed for products and services that infrequently change and prices that are relatively straightforward and predetermined. But the modern business model now includes dynamic pricing that can only be evaluated at either the time of consumption or at the time of billing, as it is linked to the volume and type of transactions. Likewise, for many the products and services offered are themselves frequently changing, as more organizations look to create bundles and, at the extreme, bundles for a customer segment of one.”

– Stephen Hurrell, Director of Research, Office of Revenue, ISG Software Research

Upgrading an ERP system is one of the biggest and most expensive decisions IT leaders will make, and many CIOs are looking for alternative approaches to reduce the risk that comes with an ERP transformation. 

One of the most complex elements of any ERP is the order-to-revenue process. It’s also one of the most customized areas of an ERP and represents a significant piece of the overall expense associated with an ERP transformation. This commercial complexity will only continue to increase as businesses implement new monetization strategies and business models. 

As you consider what’s next for your ERP, it’s essential that you understand exactly what you’ll need from your order-to-revenue over the next 10 years so that you can ensure your system is capable and adaptable to your business. 

Separating major workflows like order-to-revenue from your ERP allows you to modernize a priority process while also massively reducing the cost and complexity of an ERP migration.

But just moving order-to-revenue into a cloud ERP won’t solve the problem. 

Think about all of the order-to-revenue customizations in your current ERP. There are better ways to approach this change than attempting to lift and shift into a cloud ERP that wasn’t built to support what you need. Consider using a flexible, modular solution designed to handle the complexities of order-to-revenue instead.

Decoupling order-to-revenue from your ERP isn’t just a cost-saving measure — it’s a strategic move that can significantly reduce the risks associated with ERP transformation. By isolating this critical process, you gain the agility to innovate and adapt without being held back by the limitations of your ERP system.

To manage the growing business model and process complexity, many organizations are decoupling key business processes from their ERP systems. By isolating processes like OTR, businesses gain the ability to adapt to new monetization models without the constraints of a heavily customized ERP system. Below are some tips to simplify this transition:

1. De-risk and accelerate ERP transformation

Accelerate time-to-value: Take a modular, phased approach to deliver faster value realization for finance and accounting. Incremental go-lives bring value quickly, without waiting years for a full ERP overhaul.

Reduce transformation risk: Lower the risk of ERP transformation by minimizing customizations, supporting gradual go-lives, and reducing the dependency on a single vendor.

Future-proof with flexibility: Pre-built connectors enhance flexibility, allowing easy ERP changes in the future. You’ll have better negotiation leverage and adaptability for evolving needs like revenue recognition adjustments.

2. Focus on business capabilities, not just technology

Align on processes first: Modernizing OTR is as much about business alignment as it is about technology. Prioritize which business processes need improvement—streamlining product catalogs and optimizing data flows can reduce errors, enable rapid go-lives, and minimize redundancy.

Adopt a consumer-first mindset: Even in B2B, consumer-centric approaches from B2C can help pinpoint pain points. Focus on enhancing customer satisfaction by identifying areas where workflows can be streamlined.

“You have to think about how your customer data is being represented and whether it’s accurate. One of the big wins you get out of looking at this in a composable way is that all of a sudden, all of your master data doesn’t have to exist everywhere. It could just exist in the places that matter.”

– Matt Cheung, CEO, Clarasys

3. Identify high-impact entry points for transformation

Start with high-value areas: Begin with critical areas like revenue recognition or order management. Using modular, scalable solutions allows you to meet current needs and easily expand as transformation goals grow.

“Any information systems (IS) project now is not about building like it was 10 years ago. Back then, projects were tracked in long cycles and were very tough. Nowadays, you must take into account that any IS project must be sprint-focused. If I just look at the way things are done now, you need to be focused on simple and quick solutions.”

– Guy Chalmont, Regional Finance Leader, Workday

4. Look for modular, scalable solutions

Embrace composable architecture: A flexible, composable solution enables adaptability for new business models, without the high costs of ERP customizations. Modular architectures also allow seamless integration with existing systems, reducing ERP footprint and enhancing agility.

“If you want to be a first in class player in the upcoming years and months, you must move to a composable and flexible architecture.” 

– Guy Chalmont, Regional Finance Leader, Workday

5. Align with business outcomes for stakeholder buy-in

Focus on tangible KPIs: Frame the benefits of transformation with key metrics like cost reduction, faster order fulfillment, and improved customer satisfaction. Business-outcome alignment ensures clarity and supports buy-in from leadership and decision-makers.

Build a persuasive business case: Collaborate with stakeholders to define the scope, outcomes, and strategic alignment, particularly when seeking executive buy-in—especially from the CFO. A sales-like approach can help, highlighting the key benefits and value a new solution will bring as well as the potential risk of not acting.

To maintain your competitive edge, your business needs the ability to adapt quickly and support new revenue models. Achieving excellence in OTR transformation requires a solution that is:

• Modular – Easily integrated with existing systems for phased deployment.
• Dynamic – Adaptive to changing business models and revenue streams.
• Interoperable – Supporting seamless communication across a complex ecosystem.
• Scalable – Capable of growing with the business to meet future needs.

By decoupling order-to-revenue from ERP, companies can implement modular, scalable solutions that drive growth, enhance customer satisfaction, and reduce operational risk. This transformation isn’t just a technological shift; it’s a strategic necessity that enables businesses to innovate, meet customer demands, and future-proof their revenue operations. 

Adopting a flexible, composable architecture tailored for today’s complex, data-driven environment positions companies to thrive in an era where agility and adaptability are paramount.

Zuora’s ongoing investment in ERP and CRM connectivity is driving change for businesses looking to simplify OTR processes and reduce ERP dependency, enabling a streamlined, agile path to monetization.You don’t need to do this alone. Zuora provides the necessary framework to support current business operations while enabling the potential of future commercial models, making it a critical partner in any ERP modernization journey. 

Zuora’s platform supports the complete order-to-revenue process (order, billing, invoicing, payments, tax, and revenue operations) while integrating with your technology ecosystem. Zuora’s Integration Hub offers over 60 pre-built integration connectors to empower IT and Engineering teams to effortlessly connect and automate workflows across the tech stack.