Alisa manages a team of roughly 15 people who work on Salesforce CPQ (~ 5), Zuora Billing (~4), and Netsuite ERP (~2) Had a homegrown billing system and migrated off of that during IPO prep GTM is self-serve, direct sales and partners Partners do not quote directly but are sent information by the PagerDuty team Roughly 35 SKUs, selling in USD only No usage-based billing for now The average lines on the quote are 1-5 Challenges.
Hi. Welcome to the 1st episode of the Monetization podcast. And this is your host, Sandeep Jain. In this podcast, we invite thought leaders from B2B enterprise monetization space that is CPQ, billing, revenue operations, etc. so that you can learn about challenges, opportunities, and best practices in setting up an enterprise monetization systems. Today, our guest is Alisa Liebowitz. Alisa is currently Director of Business Applications at PagerDuty. Now Alyssa has been there for over nine years. And she started when PagerDuty was a private company, I guess less than 20 employees and no systems in place, to the point where it is right now is a public company with of course, a very set Quote-to-Cash systems. So Alisa, it's a great pleasure to have you as the first guest on my show.
I'm very excited. Thanks for having me.
Awesome. So hey, before we start, can you give us a quick summary of your background and your journey to PagerDuty?
For sure, yeah. So as you already mentioned, I've been at PagerDuty for quite a long time, very, very long when you think about startup world and help people bounce around. So I've seen the transformation of the company as well as our systems. And regarding our Quote-to-Cash systems, I actually started on the support team. So I was actually support for our PagerDuty product. And we were selling everything basically online through credit card. And we didn't really have a sales team, no Salesforce, no. We had an internal billing system that I think was built with an accounting for dummies book kind of thing. So it was very interesting. But as we matured, as a company, as we hired our first salespeople, I really began to explore other options in the company and where I could grow my skills and what really suited me. And I actually transition to sales operations, which, at the time when you're a smaller company that houses a lot of the systems configuration and implementation. So although I was sitting under sales ops, I had a lot of those responsibilities, and I learned the tools, and I learned Salesforce. And then as the company continued to grow, those functions became separated. And that's pretty common. And we actually developed a Business Systems team. And I was lucky enough to be kind of one of the founders of that team and really build it up. So yeah, and that's kind of where I am today, I have a team of about 15 people that manage our Salesforce, our Zuora, which is our billing system, our ERP, and those systems that support the Quote-to-Cash function.
Awesome. Awesome. And I think all of my guests would know what PagerDuty does, but could you just describe quickly what PagerDuty is doing?
Yeah, so PagerDuty is an incident management platform. We integrate with monitoring tools that are monitoring your website or your online platforms or presence to determine if there's issues and then we actually notify the correct people to quickly and efficiently resolve those issues, we have on call schedules and escalation policies. So that the right people are alerted at the right time, we also have advanced reporting and analytics, and we're moving towards a model where we want to be proactive about not only responding to incidents, but preventing those as well.
Awesome. Understood. And Alisa, you mentioned that you have a team of 15 people. Can you describe roughly like, what people are working on? Like, is it CPQ, billing, was it all across Quote-to-Cash stack?
Yeah, so I would say the three main tools are Salesforce, which houses are we leverage, we use Salesforce CPQ, as well. Zuora billing, which is our billing platform, and then our ERP is NetSuite. And we have I would say, five or so developers and admin supporting the Salesforce and Salesforce CPQ tools. We have four engineers supporting the billing service and Zuora billing, and then two folks supporting the NetSuite product.
Got it. And you mentioned earlier that you had a homegrown billing system. Is that still being used today?
No. So we luckily migrated off of that many years ago before we became a public company. So and that transformation was really interesting, and I definitely learned a lot but we were scrappy in the beginning and started with a homegrown system.
Got it, got it. And do you also have a self-serve and a partner channel utilizing a Quote-to-Cash stack today?
We do. So we have a self-serve portal. We partner with the growth team who manages more of like the front end and we manage the backend, so ensuring that anyone that actually goes to purchase on our self-serve portal, we actually collect the money, the invoicing is correct and all that stuff. We also have partner channel, they can also purchase through our self-serve. And today, our direct sales team quotes on behalf of our partners and actually send the quotes to them directly. And then they interface with the end user.
Understood. Got it. So shifting gears a little bit, one of the biggest challenges in this system today, as you see right now?
Biggest challenge, it’s definitely like a loaded question. I probably could pick from a number of different things. I think right now, there's a lot of like process and prioritization challenges like we're getting asked from the business, I think we want to continually change pricing and products and how we sell or be able to customize for a specific enterprise customer and do something maybe that's not within our current use cases and being able to do that quickly. And it's a little bit difficult, right to be able to get all the requirements, make sure your ducks in a row get you 80 done and be able to keep up with how fast we're moving and changing with that.
Understood. And is this is this partly is this process and tools combined, or is this like more process than tools or more tools than process?
Yeah. I mean, I think honestly, it's a little bit more processing in my experience, just because we do have like a scalable and a good foundation with our systems. And there's a lot of business decisions that change frequently and often and keeping up with that is a challenge. So getting the requirements dialed in at the front and not changing them is definitely something we're working with all the time.
Got it. And Alisa, what are the priorities for you and your team in the next few quarters, as you see?
Yeah, for sure. So you mentioned we have Salesforce CPQ. So this past year in 2020, we actually completed the implementation of Salesforce CPQ, and integration with the Zuora Billing. So that was kind of the huge milestone of last year and set the foundation for really what we're going to do going forward. As we look into next year, we're really going to prioritize a lot of our self-serve business. So we've scaled up CPQ. And we can do a lot of things. Whether it's early renewing, doing quarterly billing, all these permutations, tiered pricing, everything like that, and we have more limited set on the self-service side. And we're going to try to mirror the two and get that more quotes out so that customers can go and an auto renew early renew in the platform directly, easily and seamlessly. So I think that's one of the biggest initiatives. Secondly, we PagerDuty actually acquired our first company since our first acquisition, I guess it was in Q4 of last year. So we're learning how to integrate this run deck this company into our systems and processes, and ultimately be able to cross sell, sell both PagerDuty and RunDeck products on the same order form or in the same quote. And then the last piece is automatic bookings. So now that we've had, we've set up CPQ, and we think it's scalable, and it's proven itself, and it's a proven model. We want to be able to auto book, those simple deals. So hey, I have this cookie cutter, 10 licenses, 10% off, like why does someone need to manually touch this? Once the customer is agreed and signed, it should just seamlessly get lumped into our billing system, and the licenses should get automatically provisioned for our customers.
Understood, understood. And a couple of follow ups here, Alisa. So you talked about the acquisition of a company and integrating doing cross sales there. Do you see any challenges in doing that, or is it mostly like a work that needs to be done?
Yeah, I think we're very early on right now. So I think, luckily, it seems fairly straightforward from the front end. And I think we have a good plan in place. I think what we're most concerned about is what the architecture will look like and how having customers from another company will work within our systems and anything we need to be aware of. Right now, I think we have a good plan, but of course, the devils in the details and I'll probably learn more and be able to refer back and at a later date, what challenges we really faced there.
Understood. And the second one is LSL. What I've heard from most people is that if they have like two separate product catalogs, one, which is in the CPQ system. And another is in a separate billing system that causes a lot of friction in. Is that your experience as well?
Yeah, I mean, I don't know, friction, but it's definitely time consuming. And there's a lot of things that need to happen to map the two products together. Luckily, it's a one-time setup, and then you're done. So once you've gotten the right plans and SKU’s set up in your, in your billing platform, then you can create them in CPQ and set and forget type of thing. But it is time consuming, a little bit more time consuming than I would like. We've toyed around with the idea of an internal tool for our team to do this in a more automated way. But unfortunately, we haven't gotten there yet. There's just been too many more like end user facing priorities. But it's actually bubbled up again, just because we will have to create way more SKU’s than we ever had to integrate RunDeck into our systems, we'll have to build out their entire product catalog. So it might be the right time for us to build something to better enable that mapping.
Understood. And Alisa, you have been in all of these systems from literally the day one, do you have any observations on like you see, when you look at your colleagues, or peers that these are mistakes that people are continuously making, while setting up their Quote-to-Cash systems? Any sort of recommendations on like this is to avoid or keep this in mind, or do it this way? Anything along those lines?
Yeah. I mean, I think something I've seen over and over. Both we went we use or is quoting solution before we move to CPQ. And I found true in both situations is trying to deploy all at once and not breaking out into smaller chunks, it's always a challenge. When you have two different systems running at once and ultimately are doing the same thing. But doing the Big Bang deploy is always a recipe for disaster. And we did much better when we broke it down into smaller use cases. And you have to be creative and figure out ways that the end user is not going to be impacted, it's going to be intuitive for them to understand when they need to use System ‘A’ versus System ‘B’. But it's critical to continue keep your velocity and minimize the risk. Another thing I can think of is when we moved from our homegrown billing system to, to Zuora. We the data migration was definitely the most challenging we had a system before that, that we didn't really have clear start and end dates and figuring that out. And mapping that was super challenging. And at the right time, we were focused on that. And we put a lot of effort into that exercise, and it paid off because that definitely was the most challenging thing. Your business is always easy. But moving your legacy customers as not always.
Interesting. Got a couple of follow ups here Alisa, again. I was thinking let's, if these PagerDuty was starting today, instead of 10 years ago, all the knowledge that you've gained 10 years earlier. So would you start like, what would you do different right now? Would you still write your own billing system? Would you advise against it? Like, what's your thoughts on that?
Yeah, for sure. So when I got there, even though we were under 20 employees, the homegrown billing system was actually already in place. I think it actually at the time did serve our purpose. I have less knowledge on how long it actually took to get up and running. But I think it was actually minimal in terms of level of effort, not minimal, but not too large. I think now 10 years later, what was looking at what's in the market and what's available, I definitely look to buy maybe overbilled I think that I wasn't part of that initial evaluation. But I think going through the pros and cons of that, and if there's something in the market, I am normally preferring to buy, then you can leverage they're consistent, they're focused on that product. And they're going to continue and continuously enhance and improve it and, and support you, especially if they have a good like support and community team and then something that's flexible that you can customize, but have that good base for, so I probably evaluate what's out there, but I don't know if I can say what I would do for certain.
Got it. Got it. So Alisa, when you shifted from sell serve, I believe that's what you started with initially and then you got the direct sales element into your selling. Was there any sort of experience from that transition, were that smooth? Like, what are the problems to watch out for during that transition?
Yeah. I mean, I think it came mostly with understanding customer’s subscription terms and customizing that right. When you're self-serving, when you're accepting a credit card, it's very easy month to month or one year and they just swipe their card and everything happens seamlessly. But when customers start getting specific, oh, it needs to start on this day because of this budget. And that needs to do that. It just adds a lot of complexity to everything right off the back, I remember we actually were using standard quotes in Salesforce and Salesforce, the standard quotes are not built for SaaS, they are built for singular, I guess, one time products. So being able to do a SaaS model in with that, it was really challenging, and you kind of got to work through the pains and get through some hacks there.
Yeah, that's interesting. You mentioned this, because a lot of people have spoken where they do the same thing. You know, once they're growing, they try to use or some people call abuse, the Salesforce CRM, is there CPQ by creating a product catalog there, which does not scale eventually.
I remember we used to have like Product ‘A’ three months Product ‘B’ four months. It was like by the, by the time we were on, or close it was, we had been able to get down from like, many 100 to under 30 products, and it was a huge come up.
On that note, Alisa, are there any metrics that you would suggest to measure the health of this Quote-to-Cash pipeline, if you will?
Yeah, for sure. So I think that there's a lot of things I think, measuring time it takes to quote. So there's a couple ways you can do that. Like how long our sales taking to actually generate a quote. So we captured like number of clicks, pre CPQ, number of clicks, post CPQ metric. A lot of the metrics are also dependent on business. If you're measuring how long approvals take, but leveraging simultaneous approvals to show that also, we had a lot of manual processes, what we call like a manual order form if the system did not support a specific use case. So measuring how long those took, and then once we were able to automate and CPQ, like bringing it down. So we, we saw some use cases where we were doing about 40 or so deals a month with this, and it was taking upwards of two days to get the quote out to the customer. And once we released the functionality, we were seeing it out in under 10 minutes. So it was just a huge, huge win across the board. So those are really key metrics. I think also just seeing just capturing bugs and questions like over time, and making sure those are trending downwards are critical. And then also just measuring the velocity and the capacity. How many quotes am I able to do, or how many how many are the system running and how does that compare to previously
Understood. Typically, how many lines of quotes are there in your case? Like, is it 10s, 100s? I don't think it'll be 1000s.
But oh, like do you mean products on like, a single Quote-to-Cash?
Yeah, just roughly your quote sizes. So that…
We have pretty low numbers. I would say probably one to five is like average. So I know a lot. A lot of companies have hundreds of lines. That's probably a little bit different. But we have I think our whole product catalog we have about 35 SKU’s or something like that.
Well, maybe I should have started with that so that people have a context. Because I some of the folks have spoken with you know, they had their public companies like few years they've been public and their skews are like 1000s At this stage 1000s and their biggest struggle is around training and how to do coating because a salesperson goes there and it's like, Oh my God, what should I even quote right now so different scale of challenges for them?
Yeah, and we've honestly done a really good job of keeping the product catalog clean because we you know, we overhaul or release updated pricing and then you have all these legacy customers that are still on the old skews or plans and we do a lot of work to transition our map then to the new plan so that everyone has our like, greatest and latest and it's a more scalable process because then we only have to maintain the most active current SKU’s.
Got it. And I should have asked you this earlier, do you support multiple currencies at PagerDuty? I know you guys have you sell globally, I think?
Right now only USD.
Okay. But do you sell globally as well with USD or is it USD in US only?
We sell globally in USD right now.
Understood. Is that by the way, have been asked like multiple currency support in your Quote-to-Cash systems, has that been an ask?
It has been an ask just continues to be a lower priority than some of the other things coming up but I'm sure we'll get to it. It might be in this year.
Okay. And any recommendation either quarter caster steps, the present some challenges are when CEOs think about this audit, is there any guidance that you can give to the leaders when they are thinking about these systems? Like, in terms of the budget or timelines, any anything to think about? Like, this is not an easy thing, or any recommendations that you have?
Yeah, for sure. I mean, I think I'll just speak to the CPQ project, because it's the most recent in my mind. But I think there were a couple things that I underestimated when I predicted like, the level of effort and how long it would really take us to deliver this work, we use our internal resources, which was awesome, because now we have subject matter experts, they got trained in CPQ, and they built it from the ground up. The problem, the flip side of that is they also had their day jobs, right, we had to keep Salesforce operational and, and all of this while we were building this, this brand new system and tool. So as much as I would have loved that they would be heads down, like working on net new functionality in this huge project. The reality was their time was not fully dedicated and, and stuff like that. So I think that that was something I should have called out earlier and figured out how to resource appropriately. And then the other thing was we actually, IPO while we were undergoing this change. So that actually increased a lot of like our requirements for change management and compliance. So we were held to a more stringent process. And, and as much as I think that that was a great thing for us to deliver a product that was really great by the end, and then that the velocity had to give a little bit and slow. So it ultimately ended up taking a little bit longer than I would have anticipated. That answer your question?
Yeah, it does.
Okay.
By the way, as part of this process, do you recommend having an external help, like system integrators to help with this thing or do you think people can, if they're tight on budget, they can do it by themselves?
Yeah. I mean, I think a combination is probably what I would recommend, we had external resources, but we really only ramped up our velocity when we got internal in house developer, probably a third of the way through the project. And then we just started to accelerate our velocity. I think having those expertise and benchmarking against other organizations and, and consultants that have maybe gone through this transformation before is super helpful, but leaving it all to them and not having your internal resources involved. It's just going to leave you in a bad situation when they move on to their next project, and you have to support this. This is not a project that is necessarily done, right. Like I've delivered it, but we're continuing to enhance it and change it and develop it. And it's super, super helpful to have the expertise in house.
Got it. And a related question there, Alisa. Now, since monetization spans across different functions, like it does an engineering, it has roots in finance, sales, and even marketing and support. Do you have any recommendations on how to set up the team, monetization teams given that it is a multifunction domain right now?
Yeah, I don't know if I have a great answer for this one. I mean, I think our teams have are set up really well but not perfect. Like I said, there's their shared responsibility, and you kind of need to involve three, if not four teams to really hit every single piece of the entire puzzle, which sometimes slows down the whole process. Like I need to engage our growth team to be able to change the front end, I need to engage our Salesforce team if I want to just make a CPQ and our monetization team if we want to do something like in the backend. So it I think there's benefits to it is that we have subject matter like expertise in certain areas. But we definitely toyed with the idea of moving it all into one like global monetization team at the company. So I think Stay tuned on the answer on that one, I don't know. I'd love to hear other people's opinions because I think that there's things that are working for us and things that are that are not and we're definitely open to hear that stuff.
Interesting. So Alisa, I probably didn't catch this earlier. So are you part of the IT team or finance team? And I've seen business applications in kind of both areas?
Yes, I report directly to the VP of IT. But IT actually the VP of IT reports to the CFO. So we are I'm in IT and finance, I guess you could say.
I see. And you talked earlier about a monetization team, backend team, which function is that sort of under?
So that's under myself. There they manage like the Zuora and our internal billing service.
So that's with you then, right?
Yep, that's me, correct. Got it.
So the growth team that you talked about for the front end changes that that's probably a separate team under marketing, I guess?
Correct. So they're more focused on like, hey, like, where should we put this? How should we optimize the account setting so that customers have a seamless experience can easily check out and purchase and then we're there on the back end to make sure that purchase goes through that we're sending the right preview numbers over to the front end so that they can display almost like a PDF quote, within the account settings and stuff like that. So we partner really closely with them on a lot of our key initiatives.
Interesting. And I've heard all sorts of different ways that companies are dealing with this right now. For example, a certain company moved this entire function under engineering, because the kind of changes that they had to make, it required more engineers on the team. So they decided to do that another company, they created a separate engineering function completely to handle this. Another one, they had engineers and product managers sitting in the IT team to deal with more of these issues. So it's kind of all over the place, as I'm seeing it right now. So I was curious as to what you guys are doing yourself?
Yeah, for sure. I've heard those same things too, and honestly, are the monetization team that is under me, and IT now has in the past been under engineering, specifically, when we did the huge transformation of our homegrown billing system to Zuora. So it sat under engineering during that implementation?
Got it. And changing gears a little bit, Alisa. Do you guys do usage based billing? Or are you thinking about this, or any thoughts on that?
Yeah, we’ve used it in the past very lightly. I think it's mostly deprecated. Now, but yeah, I have less experience with usage based billing. We did it I think, at one time for international alerts, because they were more costly for the business, where we basically at the end of each month would run would run a job and determine, Okay, how many international alerts were sent on this customer's account? And those were billed a certain way? But that was that's a legacy product. So we don't do any usage based billing now.
Got it. Got it. And a related question, or maybe a partially related question. I think, since you were in support earlier, would you be able to share like the percentage of questions that come up in support because of billing things? I don't know, quotes not being right?
Oh man, I don't. I was in the support in 2012, 2013. So I think those metrics have changed pretty drastically. So I don't really, I don't have those up to date numbers. And I don't really remember it that I've heard.
The number I’ve heard by the way, it's 40%. And this is for a company that's not heavily direct sales based. But this is like more self-serve getting into direct selling. So they deal with more with self-serve flows and customer service issues. So yeah,
I mean, we luckily we have pretty good knowledge base and like tech and documentation for the customer to access and I think it's pretty intuitive and self-explanatory. Customers can view their invoices through the portal and kind of see all the information they need to, so I believe it's not super high, but I can't speak to the actual percentage.
Got it. Any recommendations or advice to vendors in this space? Like, folks, you need to be focusing more on this and not that, this is what your customers are feeling the pain, customer says to you. So any recommendations or advice on what things should be in your Quote-to-Cash that are not currently?
Yeah, for sure. And I think most people would probably agree but we're using tools that are you know, owned by different platforms owned by different companies that are being worked on in in like no silos. And we've done our own internal integrations, to link them to make them work together as seamlessly as we possibly can. But I think it would really benefit these vendors to work closely to each other. And I know, sometimes they are in direct competition, but you know, so and so is best in class in billing, but another is best in class and CPQ. Like, how do they make it easy for our customers, or do we have one product that makes it the most easy for everyone? Because that's where we spend most of the time. And it's where a lot of the technical challenges and thinking time really comes into play.
Got it. Any advice or maybe actually predicting where this industry is headed? In the next few years in the Quote-to-Cash, and maybe I think it relates to what you said earlier bout, you know, best in class CPQ and best in class billing, maybe if there's a unification?
Yeah, for sure. And I think I don't know if this is, it might be a little bit unique to PagerDuty. But we, like you said, we have a direct and we also have a self-serve business. Another thing we allow our customers to do is buy through both channels, seamlessly. So I can go and buy through a sales rep. And then day to the next day, go on online and purchase five more users if I want and having those two processes work seamlessly. So then when I go back to re-quote the customer on my third transaction, I'm able to see that they bought five users through the platform and only modify their most current subscription version. Maybe think about, I think a lot of the vendors today have really focused on one channel or the other, and really thinking about it more holistically. And making sure you can support both and in a real way.
Got it. Got it. Alisa, brings us to the end of the podcast, but before we let you go, can you share with the audience? Any sort of business related resource, like a book or a podcast that you come across that you'd like to share with the listeners?
Yeah, for sure. So we recently had our company leadership kickoff for fiscal year 22. And we had a bunch of guests. And one person really inspired me, his name is Adam Grant, he has a lot of books and podcasts. And he talks about how teams should work together. And he gave a lot of like, really cool recommendations that I took back that were super actionable, and maybe not intuitive at first, but thought would really benefit the way my team works. So I really appreciated that. And then we all got the book, think again, that I'm about to written by him, and I'm about to get started on it. So I would check him out.
Interesting. It's interesting that you mentioned Adam Grant. Frankly, I'm not a big book reader. I don't have that much patience. I’m mostly a bite consumer, like shortstop, but I did end up reading his book “Originals”.
Really?
Yeah. And it was one of the videos refreshing reads that I've ever had. And the interesting thing about that book was, at least for me, was it was not pedantic. It's not like somebody standing on a pedestal and saying, Thou shalt do things this way. And this is the only way of things. Adam was giving examples of how things can happen. And I believe that's a good way of at least how I learn things better when people share examples with what they're saying, and I think that book was really great.
So yeah, for sure. He gave a lot of great ideas he even talked about, like how technical teams should be brainstorming and that a lot of times when you're getting together as a group, people are just more inclined to agree with it. I think he called it the highest paid person in the room and giving time, people time to go off on their own and really think about the problem and then come together after they've had that time. Get some really creative and different ideas that you may have probably would have not gotten before. So that was one thing I took from the talk.
Awesome. Hey, Alisa, thank you so much again for your time and great to have you on the show.
Awesome. Thanks so much.
