Art & Science of Revenue Automation: It’s a Journey
As the saying goes, “life is a journey, not a destination”. There are some truths to this that apply to revenue automation. There are many pressures to automate revenue in accelerated timelines. This objective is often translated into “having everything fully automated”, which is a very high-bar that may not be achievable given time, resource and budget constraints. We encourage our clients to view revenue automation as a journey - a journey for which we can make significant strides in the short term, but more work will be necessary to achieve “the goal”. This is also consistent with other process improvement methodologies, which focus on continuous or agile improvement verses a one-off big-bang fix.
How should you view this journey? There are several aspects to revenue automation to consider that can enable significant short- term improvement. You can then improve on your masterpiece over time.
- Manage your scope: trying to automate 100% of the population can be a very sizable goal. We recommend applying the 80:20 rule. With revenue, there are often numerous corner cases; trying to automate every possible scenario could significantly complicate and extend an implementation. Furthermore, garnering early wins can secure engagement and support to tackle more complex challenges that may come.
- Park the uncertain: this is particularly true under the new ASC 606 standard. If you have significant uncertainty around certain transaction types or use-cases, consider automating these later. Don’t delay the entire implementation for the sake of a few uncertain revenue scenarios.
- Some manual work is ok: the desire for “no touch” revenue automation is both a high, and in some cases unachievable, bar. There are some revenue situations that, no matter how sophisticated the automation, will require manual intervention. In other cases, such as when data may not be available, implementing manual steps to capture the data may be the best and fastest approach to automate revenue, especially with short timelines. Therefore, expecting and planning for some manual work allows for more realistic implementation timelines and helps manage user expectations.
In closing, we recommend revenue automation and recognize that it provides significant benefit and value to companies. However, effective automation, especially with the new ASC 606 standard will require your approach to combine the “science” of system implementations with the “art” of managing the unknown and unexpected. Use the lessons and considerations in this series to plan and execute your automation projects and leverage your community of peers to share and learn from their experiences. There are many paths to achieve revenue automation, hopefully the lessons above help you determine the path most suitable for your situation.
Connor Group has assisted 30+ companies with adoption of the ASC 606 standard and delivered 20,000+ hours on ASC 606 projects. Connor Group has helped 100's of companies navigate the complexities of revenue recognition. We are in the forefront of ASC 606 guidance and adoption, participating in the drafting process of the standard through comment letters, roundtables and direct FASB discussions.
Our goal at Connor Group is to be the most respected and highest quality firm across all our service lines. We are hired by finance and accounting executives who understand the importance of leveraging their time as well as having a partner that can successfully execute the implementation of ASC 606 in a practical and cost effective manner.
Interested in reading the full Art & Science of Revenue Automation white paper? Down load here: Art & Science of Revenue Automation
Jason Pikoos
Partner, Financial Operations Practice Leader
Connor Group