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As business models in the tech industry continue to evolve, PricewaterhouseCoopers (PwC), a well-known consulting company, is urging players at all levels to take a hard look at the full scope of their operational processes.
PwC's report, "Technology Industry at the Crossroads: Transforming Quote-to-Cash Operations," points out a number of salient issues that range from the initial lead discovery to the concluding aspects of paid invoices and satisfied customers.
"Quote-to-cash is not a sexy subject, but it is critical to the survival of the company," said Joe Lo, a partner at PwC who leads the customer competency practice for the technology sector operation. "It basically covers the sales cycle, the fulfillment process, billing and revenue recognition -- all the key pieces to doing business.
Typical elements of quote-to-cash begin with the procedures around the initial sales quote, just as the term would suggest. They then extend to the activities that lead to configuration, optimization, final pricing and quote acceptance. The transaction then moves into the order management process, including credit check, trade compliance check, etc., at which point it moves to the fulfillment phase. Next steps often include invoicing, collection and recognition of revenue. All of these things need to be done in a way that best matches the business model of the company while the same time meets the needs of the customer and the partner, whether that partner is a channel player or a vendor.
Lo points to three reasons why quote-to-cash processes have emerged as a fundamental C-suite discussion. The first is a higher level of customer expectation around buying what they want, where they want and when they want. While these demands are nothing new in the business world, the evolution of online transactions, combined with the always-on aspect of the Internet, has raised both the game and customer expectations.
"The number two change is the new business models," he said. "Cloud, software as a service, managed services, and the melding of hardware and software are good examples. Companies need to revamp their quote-to-cash processes because their original processes just don't support the new business models. The third reason to examine quote-to-cash [processes] is about mergers and acquisitions. Very often, the quote-to-cash practices of the acquired company are different from the company that is making the purchase. It can be very difficult to integrate these processes because the technology platforms are frequently incompatible. So, they end up either running multiple quote-to-cash processes within the same company, or they are sinking a lot of time and money into getting everything integrated."