The FINANCIAL — Addressing a long-standing industry challenge, Accenture and ServiceSource have formed a global alliance to make it easier and faster for companies, such as manufacturers of computer software and equipment and medical technology devices, to generate and retain more recurring revenues from their customers, according to Accenture.
These revenue streams flow from various types of agreements such as hardware and software maintenance and support contracts, subscriptions offered by software-as-a-service providers, and warranties for health and life science equipment.
These types of agreements are sold initially by the original sales teams, but then must be renewed periodically to ensure that companies continue to deliver the service and collect the revenue. For the past two decades, however, renewal processes and related data have become overly complex, disaggregated, and time-consuming to navigate. As a result, companies often have not invested the time needed to pursue these ongoing revenue opportunities with existing customers, and when they have, the results have generally been poor.
“Accenture and ServiceSource recognize the challenges associated with the recurring revenue sales process and see a big opportunity for technology companies to drive more recurring revenue – potentially $30 billion per year according to ServiceSource analysis – if they can transform this increasingly strategic piece of their business,” said Mike Smerklo, chairman and CEO of ServiceSource. “Most companies incorporate a significant recurring revenue component for much of what they sell including renewals for hardware, software, Software as a Service and other subscription services. In fact, these renewals often account for 30-40 percent of a technology company’s revenues and as much as 50 percent of its profits,” he added.
Working together, the two companies will combine leading technology, services and best practices to drive clients’ top-line results around existing and emerging recurring revenue streams. Accenture will deliver capabilities in systems integration, consulting, business transformation, and predictive analytics, according to Accenture.
ServiceSource will deploy Renew OnDemand™, its cloud-based application that provides the data management, sales automation and sales analytics capabilities needed to maximize recurring revenue. Together, Accenture and ServiceSource will create a comprehensive “Recurring Revenue Blueprint” to help technology companies capitalize on these opportunities.
“This agreement will deliver a comprehensive and integrated solution for what has long been an unwieldy and neglected renewals process,” said John Walsh, senior managing director in Accenture’s Communications, Media & Technology operating group. “By integrating Renew OnDemand with enterprise platforms and processes, we expect to drive real and lasting results for a variety of clients – notably those using ‘as-a-service’ business models as key enablers of growth and differentiation,” he added.
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