Navigating The Revenue Tech Universe

Navigating The Revenue Tech Universe

Samuel Rosenberg, Varun Ratta, Chris McMillan, and Sarah Roesener

at Oliver Wyman

Views 412

Navigating The Revenue Tech Universe

06.12.2019 03:45 am

Boards Expect Near-Term Disruption From Emerging Technologies

“Revenue Tech” refers to the plethora of technology application providers of analytics, insights, and decision-making support software aimed at fueling top-line and margin growth. At its core, Revenue Tech focuses on three areas that drive revenues (hence the name): pricing, sales effectiveness, and marketing. All three areas are underpinned by applications in data analytics and data resources.

Revenue Tech is a highly dynamic area and is growing rapidly. In 2012, there were ~2,600 such companies, globally. By 2018, there were ~8,000. Revenue Tech’s dynamism is reflected in its significant level of funding, which has been growing by 25% CAGR since 2010. Investment reached ~$10 billion p.a. in 2018, an increase of 33% over the previous year.Today’s hottest segments, in terms of the investment spend over the past three years, are mobile marketing, alternative data aggregation, and social media listening and reputation management. The largest share of funding comes from venture capital, just 10% coming from private equity.

The largest Revenue Tech players are benefiting from the present wave of investment, their market capitalisation quintupling between 2011 and 2018. One of the most prominent,, now has a market value of $120 billion. This success has attracted attention. More established tech giants are also moving into this area and are willing to pay hefty premiums for innovative players. The acquisition of Qualtrics by SAP for $8 billion and of Marketo by Adobe for $4.75 billion made the financial news in 2018.

As yet, however, there is little sign of consolidation. Even in the area of customer relationship management (CRM), where Salesforce is a clear market leader, the top five vendors command just 35 percent of the total market, according to IDC. By way of comparison, in a number of the more basic SaaS areas, such as cloud services, there is already significant consolidation. Canalys reports that the top five cloud services companies control 65 percent of the market. We expect significantly more consolidation to come as the large B2B tech players seek to enhance their offerings in this space.

While Revenue Tech is high growth and top of agendas, we find that businesses find it hard to navigate through the complex maze of products and vendors. The key is to approach implementation in a rigorous manner. We outline some common pitfalls below and ways of avoiding them.

Common Pitfalls In Implementation

Revenue Tech beguiles. It lures the customer into thinking that it is a ‘plug in and go’ solution to all their needs. Nothing is further from the truth. The right way to approach Revenue Tech is with the same implementation mindset that any new technology demands. Here we list some of the most common rules of thumb for implementing Revenue Tech that help avoid the common pitfalls:

Define the need: What do you want it to do? Failure often starts here. It is essential to get the basics right. What are the unique requirements of the business? What is the Revenue Tech solution expected to achieve and what role it will play within the organization?  How and where is it expected to improve efficiency and effectiveness and add value?

Understand end-users’ decision-making processes: How will the different end users interact with the software and how should this shape implementation? It is critical to understand these user dimensions. Without this understanding, it will be almost impossible to develop shared agreement of its role. This, in turn, is likely to undermine reporting and goal-setting.

Ensure good data quality: How good is your data? Do you have the right data? Missing data and low quality data are common hazards. Poor data quality commonly undermines Revenue Tech implementation. The definition of what defines good data quality, however, will depend on the specific goals of the individual implementation, and we frequently see companies that wait for perfect data when ‘good enough’ would suffice.

Give sufficient forethought to implementation: What shapes your process for implementation? Resources and timing are critical. The implementation team needs to work with potential first users from early on in the process. Timing is key: plan to go live during slack periods, not during promotions or a new product launch.

Demonstrate early wins: How do you intend to ensure buy-in? Software implementation is almost always challenging. It is easy for users to become discouraged. Use pilots to create commercial results early on and seek out quick-wins to showcase the benefits of the new software.

Implementation is not the end of the story: What comes next? It is tempting to think that once the Revenue Tech software has been implemented the job is over. In fact, the initial implementation is just the start of a continuous process. Algorithms will need to be adapted to changing conditions; pricing rules will need to be reviewed regularly; competitor positions and customer needs will necessarily reshape product portfolios; stakeholder interactions will further refine business responses. Ongoing monitoring and user feedback are key to effective governance.

Three Strategies For Engaging With Revenue Tech

The Revenue Tech landscape is one of great variety. Today’s 8,000+ companies engage with a wide variety of tasks. While Revenue Tech offers effective tools for optimizing pricing and promotions, managing the salesforce, and getting more out of marketing, the great variety of products and providers can be confusing. Nor does this great variety promise an off-the-shelf solution for each and every commercial problem.

To get the best out of Revenue Tech, therefore, it is necessary to decide which of three generic scenarios the business is in and hence the right approach, which may vary depending on which part of your commercial organization you are dealing with:

One-stop solutions: This is most often successful in industries where most companies have similar business processes and where there is only limited scope for differentiation. A number of Revenue Tech companies currently provide solutions that offer prepackaged commercial processes, complete with workflow management and external data resources.

Smart integration: Often no single Revenue Tech partner can meet all of a company’s needs. In these circumstances, companies resort to assembling a range of ‘best-of-breed’ solutions in each specific niche or functional area. The task is then to develop in-house data analytics capabilities to fill the gaps.

Customized platforms: For many companies, commercial processes are an important source of competitive differentiation. Such companies typically look to develop in-house analytics and decision-making platforms tailored to their unique commercial processes and business needs, only turning to off- the-shelf Revenue Tech for the most standard of processes.

Hard Lessons Learned 

The hard lesson is that everything hangs on choosing the right strategy and then ensuring that this is backed by effective implementation. Done poorly, and even the best Revenue Tech tool can be yet another implementation sink hole. Done well, and Revenue Tech can add real, lasting value, driving significant improvement in revenue.




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