New Study from Model N Examines How Top-Tier Organizations Approach Revenue Management
SAN MATEO, Calif. – March 19, 2019 – Model N, Inc. (NYSE: MODN), the leader in cloud revenue management solutions, today announced the 2019 State of Revenue Report. The research study, commissioned by Model N, polled 300 life sciences and high tech executives in North America. The study shows the macro trends impacting revenue, the top challenges life sciences and high tech companies face regarding revenue management, and what best-in-class organizations look like.
In summary, the report shows there are three macro trends impacting these organizations: artificial intelligence (AI), digital transformation, and a proliferation of channels. Most of the respondents (78 percent) report AI is changing the way revenue management operates and another 69 percent identified digital transformation as a key factor reshaping the industry. Additionally, the survey shows that life sciences and high tech companies depend upon a broad and deep set of partners for their revenue. 90 percent of respondents work with 20 or more partners and 70 percent work with 40 or more.
To further understand what is hindering organizations from achieving their goals, Model N then asked the respondents about their major challenges. The top three include:
- Controlling revenue leakage (48 percent)
- Managing global pricing (47 percent)
- Regulatory compliance (47 percent)
Model N also examined the results from an industry-specific perspective. Life sciences organizations, particularly pharmaceutical organizations, also prioritize predicting revenue (45 percent) as a major challenge as it becomes more difficult to manage the complex go-to-market process governed by multiple stakeholders and regulatory bodies.
High tech organizations are facing unique challenges to accurately predict revenue and ensure that discounts granted to customers are appropriate (43 percent) as poor discount management can lead to additional revenue leakage and lower profit margins.
Finally, the study shows that companies that overcome these challenges and meet their goals are best in class across several dimensions. These companies tend to:
- Manage their sales processes and contracts via systems
- Manage their channels and third parties using systems and data
- Proactively set strategies and systems to manage regulatory requirements and gain visibility into revenue at all stages.
Across the board, organizations that were more likely to be doing well are seeing fantastic results:
- 63 percent were more likely to be doing well with improving profit margins – the companies’ #1 goal.
- 57 percent were more likely to be doing well with reducing revenue leakage – the companies’ #1 challenge.
- 85 percent of top organizations were more likely to be doing well with the ability to cross-sell products to increase their share of wallet.
- 79 percent were more likely to be doing well with stock price growth.
“The 2019 State of Revenue Report shows that revenue management is a strategic imperative for life sciences and high tech companies,” said Jason Blessing, chief executive officer, Model N. “The fact that top-tier companies significantly outperform their peers in meeting their revenue goals demonstrates the impact systematic, end-to-end revenue management can have on top line growth.”
For more information or to download the full report, visit https://www.modeln.com/resources/modelns-2019-state-of-revenue-survey-report
About Model N: Model N (NYSE: MODN) is the leader in revenue management solutions. Driving mission-critical business processes such as configure, price and quote (CPQ), contract and rebate management, business intelligence, and regulatory compliance, Model N solutions transform the revenue lifecycle from a series of disjointed operations into a strategic end-to-end process. With deep industry expertise, Model N supports the complex business needs of the world’s leading brands in pharmaceutical, medical device, high-tech manufacturing, and semiconductor across more than 100 countries, including Johnson & Johnson, AstraZeneca, Novartis, Microchip Technology and ON Semiconductor. For more information, visit www.modeln.com. Model N® is the registered trademark of Model N, Inc. Any other company names mentioned are the property of their respective owners and are mentioned for identification purposes only.