Day 1 RAINMAKER 2014 Recap
It was a fantastic Day 1 at RAINMAKER 2014 in Savannah.
Model N CEO Zack Rinat set the tone for the day with his opening remarks, highlighting some key stats about the challenges that life sciences and high tech companies face in revenue management today. He noted that pharmaceutical companies alone leave $11 billion of revenue on the table just by mismanaging rebates and incentives.
This is a telling statistic, but there is a great deal more to the story. AfterBurner, Inc. founder and CEO James “Murph” Murphy was the perfect speaker to keynote and kick off this conversation.
Murph opened his session with a video of a real F15 dog fight – watching it was a rush. Beyond the dizzying display of G-forces, what really struck me was the wisdom Murph shared with attendees from his air combat experience. He said that pilots know that if you lose sight of the fight, you’ll lose the fight. For those of us in revenue management, this definitely rings true. Too many organizations lack visibility into their revenue management processes. In fact, 90 percent of life sciences companies have no contract visibility or forecasting tools.
Murph also emphasized the importance of what he calls a nameless, rankless debriefing process. Irrespective of rank, it’s critical to discuss what’s gone wrong so that things can be fixed. Too often teams focus elsewhere. Murph highlighted that it’s not who is right, it’s what is right.
Of course, I’d be remiss to not mention the buzz around Model N’s news during Day 1 of RAINMAKER 2014. Model N announced a new sales solution built on the Salesforce1 Platform for the semiconductor and component manufacturing industry. As a Cloud Alliance partner of salesforce.com, Model N will deliver REVVY Sales Application Suite, a vertically designed cloud solution that will allow semiconductor and electronic component manufacturers to strategically manage their entire direct opportunities pipeline and channel design registrations with out-of-the-box functionality, designed to address their very specific vertical requirements. You can read more about this news here.
What resonated from the sessions and the chatter in the hall was that the current revenue management process that most companies take is broken.
As Zack Rinat said in his general session, there are two reasons that revenue management is broken. First, companies have been strategically focused on the lower part of the income statement on the cost side for a a couple decades now. They’ve had a single mission to become lean and to cut cost by conducting business process reengineering and automating the back office by installing packaged software (ERP, Human Resources Management, SCM and CRM). Companies, however, had little focus on revenues management and because of this the top-line is still manage in spreadsheets, homegrown systems and pieces of paper.
The second reason Revenue Management is broken is that unlike automation of the single functions mentioned above, Revenue Management is cross-functional business process that cuts across marketing, sales, finance and legal. It extends beyond the boundaries of the enterprise into the channels. Someone in marketing will create a rebate, which is a customer incentive to generate demand, in a spreadsheet and then throw it over the wall to finance and hope someone is there to catch it to pay the customers. This spreadsheet is completely isolated from the ordering system and the financial backbone of the company. This is exactly where the aforementioned $11 billion in revenues are lost when the spreadsheet is thrown over the wall.
Model N has been working with our customers to leverage revenue management as your next source of competitive advantage.
Over the next day at RAINMAKER 2014, attendees will hear from many of these customers about what challenges they face, what’s working and what’s not. And, we’ll keep bringing you their insights.
You can stay tuned to RAINMAKER 2014 by following #Rainmaker14 on Twitter and followingModel N on LinkedIn.