Senior Director of Product Management
May 14, 2021
8x8 is a leading provider of SaaS solutions around voice, video, chat, and contact center, all in one global cloud communications platform. Sandeep Jain is joined by Arvind Sathyamoorthy who is their Sr Director of product management. In this episode they discuss how 8x8 is able to handle subscription based revenue on such a global scale.
Hi. Welcome to the 5th episode of “The Enterprise Monetization” podcast. And this is your host, Sandeep Jain. In this podcast, we invite thought leaders from enterprise monetization space like CPQ, billing, revenue operations, so that you can learn about challenges, opportunities, and best practices in enterprise monetization. Today, I'm pleased to welcome our guest, Arvind Sathyamoorthy. Arvind is currently Senior Director of Product Management, commerce and integrations at 8x8. Before that, Arvind served in both engineering and product roles at companies such as Malwarebytes, Symantec, M Technologies, HP, Thoughtworks, etc. It's kind of interesting that Arvind us today here on the podcast because our window and I spoke a couple of years ago, when I was researching into Quote-to-Cash space, so it's a pleasure to speak with you again, Arvind, and welcome to the show.
Likewise, thank you for having me on, Sandeep.
Awesome. So Arvind, before we start and get into the depths of Quote-to-Cash, could you talk about just share a fun fact for the audience to begin with?
Well, this is mostly an unknown fact for most people give you and beyond my family. But I get to all the candy levels every week, and what 9000 plus levels right now, I think I've got this week left to go. Because there's a reason why they haven't had a chance to get on it this weekend.
Did you say Candy Crush?
Oh my God.
You know, a lot of people commit to it as well. Man, it's not that hard.
I have a lot of friends who are in Pokémon. But I guess you're the first one I've heard who's on Candy Crush. So that's certainly a fact.
Since you can actually see me while we're recording this podcast, take a look. Basically with four digit, 8000, whatever.
So why specifically Candy Crush? Why not anything else? Like did you not find anything new or was it just, you just got to?
No, it isn't. Actually the reason I got started paying Candy Crush, I think my wife was the one who introduced me to her. And then she got bored of playing. And there's actually a good two years in between where I did not play, actually took a break. So no specific reason, man. It's just something that's easy. That's accessible on the phone, you know. It's just mobile accessible, right. Here before I used to play things like Age of Empire and stuff of that sort many years ago. But obviously don't play much of that anymore. Unless I get a chance. Plus, it takes a lot longer. And a Candy Crush level takes maybe two minutes.
Interesting, Arvind. So when I was looking at your profile, you were not in Quote-to-Cash when you started. I mean, you did a bunch of different things before you jumped into Quote-to-Cash. Okay, can you tell our audience about your journey to this vertical or this?
Sure. I'll kind of start with my journey getting out of college. I did my MBA, got out of college and spent about my first three and a half years working at a company named Thoughtworks, which was a boutique consulting firm. And one of the primary industries that they were focused was in equipment leasing. And from there, I spent 3 odd years at Thoughtworks, then spent a year at HP when they had their merger with Compaq, having kept those switching systems aligned with each other. And after that, I moved on to Symantec and spent about nine years at Symantec. Right from the time and Symantec was starting to launch when he was, so free subscription based products, helpful to first when you're centered Symantec. And to my journey at Symantec then went on to help build auto billing as that became a rage in the early to mid-2000s. From there, Symantec, as we bought those things in house because we primarily done a lot of the Ecommerce to an auto-billing to third party vendors. And we bought all of that in house both that in house. So and then at the end of that journey, not just on the B2C side at Symantec, we've also started moving into the B2B side, more on the SMB end of the world and starting to scratch on mid-market. From Symantec, I went on to M Technologies with startup in a span a couple of years there, primarily focused on BI type, cloud based software for the commercial real estate industry, but still a lot of pleasing related items, and then move over to Malwarebytes where my primary focus was B2B with oversight on B2C. Essentially pouring ordering subscriptions, billing. And after Malwarebytes, I got to 8x8 where for the last two and a half years, I've pretty much been focused. I started out with my first year 8x8 focus on Ecommerce and then move on to taking all commerce integration scoring and everything QTC at the end of the day.
Awesome, Arvind. Hey, can you tell us more about what 8x8 does? I'm pretty sure most of us know that, but it'd be good to hear from you again?
Sure. I’ll share a little bit about 8x8. So 8x8 essentially in the communication space, essentially is a SaaS company focused on Business Communications, provide essential voice, video, chat and contact center applications. NSF enterprise class API solution is right globally. At the core, we look to be the one single communications platform for any company.
Understood. And you guys are a public company, and I believe your revenues are around 350 million to 400.
Yes, it's a little bit over 400 million at this point in time. We are a public company. Well, we are the public company for many years.
And since we're going to talk about Quote-to-Cash, but it's a reflection of who the customers are. So can you talk about the customers of 8x8? Like, are they big enterprises, specific verticals? Are the individual users, small businesses?
Very great question. So 8x8 pretty much caters across all segments. I'll tell you a funny story. So like I said, we cater in the SMB space, mid-market, the enterprise space, we also work with a lot of partners. And when I got hired on to 8x8 you know, we want to start getting into Ecommerce and that's where I spent my first year. And as we launched our Ecommerce, one of the key thoughts that we had was whether Ecommerce would end up cannibalizing some of our SP revenue and our SP business. And what we surprisingly found out was that there's actually a micro segment in there, which doesn't really do like the SP sector. These are people who want to go online sign up, and just keep get things up and running, or come and try things without wanting to get on the phone with somebody. So what we found out, we never cannibalized any of our SP market. When we rolled out ecommerce, and we just found a new segment.
That's interesting. But is one segment more predominant than others in your case? Like is direct sales more predominant is Ecommerce or small business?
Well, Telco itself is a regulated industry. So the channel in Telco is a little different or a little harder, and also channels a little different, a little harder to do than your standard also channel. So the dominance of the wholesale channel is not necessarily as large as the direct channel. But Telco also operates a lot to the partner based channel model where you've got partners bringing in revenue as opposed to them being wholesale partners, so the more like affiliates or referrals and things of that sort.
Got it. And I'm pretty sure this information may be public as well. But if it is not, then then you can choose not to answer this. But how many customers do you have and across which countries? And what currencies do you deal in?
Though, so we deal with customers globally. And I'll try to keep it to publicly available information, we do deal with customers globally, we operate in multiple currencies across the globe. We do have some subsidiaries that offer many, many currencies in Asia, because that's very prevalent in Asia. In North America and Europe, it's very limited in terms of currency, for obvious reasons. And of course, we operate in Australia, New Zealand also.
So it's very global in nature.
Understood. And since we on the same topic, roughly how many SKU’s we're talking about across all channels?
I don't know off the top my head, I would say.
Like 100s or 1000s?
100s, yeah. Now keep in mind, Symantec, who's in the 1000s.
Got it. And this is all subscription based, or is there a one time? Would they buy it?
Though, if I doing that, we're in Telco, we've got subscription base, you got one time charges. And then you also end up selling a lot of hardware. Classic phones and things of that sort.
Understood? And how about usage?
Usage of the sounds on beast. You definitely got to use its complement in there, especially when you're a Telco.
Got it. We'll talk more about that in a second. But that's good. Arvind, now can you talk a little bit about your team, like what your team does? How many people are there? And what are they work on?
Like you said earlier, my role at 8x8 is focused on product management, with a complete view of commerce and associated integrations to commerce. So what my team works on, if you look at the QTC framework, it has everything that starts at the end of the opportunity, and goes all the way to cash. So essentially start if you were just looking at individual silos you obviously starting with the catalog CPQ, which is configured price quote, you get into order management next, after that you're starting to get into billing, invoicing and payments and then you start getting into the whole process of RevRec, GL, bookings. And then adjacent to it of course, is all of the fulfillment functions which take integrations. And given that we've got both hardware and software. So there's integration for provisioning within our licensing systems. And then there's integrations with third party vendors for hardware. And then, if we ever sell any kind of third party products, there's integration to those systems. So that's kind of the spectrum of everything that's within my team. And my team drives product management, meaning which we got, we got a bunch of folks on product managers, business analysts, but then we ended up driving in engineering and QA, crazy.
Arvind, tell me this thing. This is something unique that I've not seen before. I talk to people who do, who are in IT, who do business applications, enterprise architecture, but I've not heard of product team and looking at Quote-to-Cash. Is it something to 8x8?
No, I don't think so. I've seen it in other places. But it's definitely not the norm. Because you know, as I've chatted with some of my peers across industries, or even other folks across the industry, they do ask the same question. Why are they PMs and RPAs? And here's, here's what you're looking. I mean, if you look at what we do from a PM perspective, maybe a little bit of a nuance in there. Because what you're really looking to do is as you put these solutions out, you're looking to productize them. You want to build a solution that works for everybody. I don't want to build a quoting system that works for say, the wholesale channel, but does not work for direct. Why do you want to maintain two flavors of it? I don't want to build a pricing engine that works one way for wholesale, a different way for direct, a third way for channel partners. Now you just started to create a lot more complexity within your ecosystem. But if you look at it and say, can we productize it? For example, you know, I think about six months ago, we were looking to add started selling our Ecommerce offerings with channel partners. We were talking to one channel partner that time, it would be very easy to say, let's go build a thing for one channel partner, which is what most places would do. But we basically built it in a way where it would work agnostic of channel partner, because what's a partner a partner within your system, at the end of the day is an ID. And the ID that's basically got to flow to the systems from multiple places. And so if I can productize it and do it one way, why would I do a different way?
No one explained. It does make sense. But tell me this thing. Are you part of the IT organization, or are you part of the product organization at 8x8?
And so when I came to 8x8, I was a part of what you would maybe look at as a CIO organization. Right now I am part of the product organization, but all of our product and engineering, including IT is all contained in one org. It is all technology sits together.
I see. And in the reason I was asking this is because traditionally the Salesforce systems or your CRM, or ERP, they are never part of the product org, they are always part of the separate IT org. And that's where that dichotomy of two different things come along.
But look, look at SaaS, look at any SaaS company out there when it starts out. But how does it start out? Where do the business applications sit? They sit in the product.
And then when the company grows and becomes bigger, that's when they start thinking about how do we transform to have the separate business applications organization. And then you get into a lot of models about how do you separate these things? And then you say, I can do it this way in Java, why do I have to do it the other way in Salesforce?
Fair, fair. I think this traditional separation became was I believe, I think an artifact of traditional enterprise, where these pricing and go to market was very different or separate from your product, because of their business model, which was one and done. But subscription, everything kind of comes together as you're talking about. And probably that sort of makes your business applications team which is running in a silo not any more relevant because your product and pricing are now sitting on top of each other.
Let me see if I can throw some food for thought there. This might sound like a disagreement to some extent, but all sorts of food for thought. IT organization itself only been around for about for 20 years, for 30 years, sorry. Yeah, maybe 40 If I were pushing it, and at God born out of the need to have a separate skill set, which did not exist before. How long do you think subscriptions have existed?
Well, subscriptions and they have, as far as I understand the subscriptions have existed in the support. I don't know if you'd call again, if you can call them subscriptions. But the idea that you're not paying for something one and done but there is a term to what you're selling. That has existed for as long as I don't know if 20 years or whatever.
That's what most people will tell you, 15 or 20 years by the early 2000s. I want to change that paradigm for you, about 4000 years.
I mean, let me tell you why I say that. When you look at an equipment lease, what is it? It's a subscription. At the heart of the whole thing, it's a subscription. You're basically paying a recurring charge every month or every year you use something. That's what an equipment leases and equipment and leasing has been around since 2000 BC. That's a good 4000 years if you come to think about it. Subscriptions as, the word subscriptions, and as an industry is maybe existed for 15, 20 years, like you say, but at the heart of that whole thing around doing business that way that's been long for a long time. And that whole formation of an ITR started out and saying, didn't start out with building online products or electronic products. It literally started with saying, how can I automate the business? And that eventually, it asks for the same. How can I build products in the technology space? And that's when you started a lot acceptation from IT.
So let me ask you this, Arvind, would you recommend companies of the size of 8x8 or similar companies to structure their Quote-to-Cash themes, like the way the structures are structured at 8x8?
Well, let's put it this way. I can't really answer that question. Every company is on its own. And a lot of it boils down to intricacies of what they have to deal with. But does closer alignment of product health? Absolutely. Because what you see in most companies is this, this wall that stands between Sales and IT all the time.
And I'm not going to say, how do you structure it for them to be one team? But it's the only a question of how you structure that wall is actually now. And I recall was when we did a transformation project at Symantec, we bought that wall down. Same thing at 8x8 now, I'm seeing us being in the field that we bought that wall down as we put the teams together. Because that's where a lot of the friction happens. Because you got one team that's charging one way or another team that's got to charge another way. But now you can align direction that helps a lot. Structure structuring it, different story, but alignment of directions, what else?
Sounds good. And how many people in your team, Arvind?
Right now my team, I think I've got about six people.
And what are they focused on? Are they focusing on CPQ billing ERP, as you said earlier?
So we focus them a little interestingly. Yes, we've got somebody who's focused on product launches. So essentially, you take it, you launch the product, you make sure it runs into it. Then we've got somebody who's focused on billing and payments. I've got somebody else who's focused on integrations. And then I've got a fourth person who's focused essentially on the subscriptions. And then I've got a third party team, actually, that's more focused on the building to GL building the NetSuite side of things.
And then I've just gotten a new member on my team. And we've got an idea of what he's going to focus on. But we're still working that out.
Awesome, awesome. And you described earlier Arvind, you have multiple channels like ecommerce, direct sales and your partners, can you talk about what systems these channels sort of touch in terms of your Quote-to-Cash stack?
So we've got Salesforce, which is the heart of our CRM. And sitting inside Salesforce is a CPQ system. And then beyond that we've got a billing system. We've got a homegrown billing system, we've got another billing system also in the works. And then lastly, at the end of the stack, we've got NetSuite which is our ERP.
For billing, you said you have two billing systems.
We got a homegrown one, and we're working on a SaaS one.
Okay. So this is a third party or this something that you're building on your own as well?
Okay. And then you have NetSuite as an ERP.
Okay. And can you share the name of the third party thing, or is that something that you guys are still launching? So you want to be a little quiet about this?
Well, I think there has been a public announcement about it already. But we are working with a third party company called Gotransverse.
Got it. And all these ecommerce goes through the same channel directs and partners like how does that work?
Yep, everybody goes to the same. Well, let's put it this way. QTC is QTC, right. We did not want to go build a separate QTC for Ecommerce, with a separate QTC for channel. But we wanted to make sure that all our customers go through the same flow for QTC. How they get there could be different avenues.
Got it. So everybody entered into an app to CPQ whether it's coming from the web, ecommerce or your partners?
Our partners, or wherever it's coming from.
Because that then gives you the ability to access other features that are indirect. For example, if an Ecommerce customer wants to upgrade into one of the higher level products, now they can get on the phone itself and say, upgrade me.
Understood. We'll talk a little bit more about that in a second. But can you tell me this, the two billing systems story here? Like, are you going to have this for long, or are you gonna phase something out?
Oh, no, no, we're in the process of facing one thing on bringing a new billing system. And that's what we're doing. We have a homegrown billing system that's been around for many, many years, working on phasing it out bringing something else in.
Okay, can you give us the backstory there, like, what made you change that equation, and go to look for third party?
Sure. I think there's a few things that are happening in the market. Let's put it this way, business is evolving. But I'll tell you what I mean by that. 15 years ago, everybody was talking subscriptions. In the last five to seven years, everybody started talking usage. And the next evolution of that market, I think is more on consumption. Because see, with subscriptions, you had this flat amount of money that somebody had to pay every single month, every single year, whatever the case may be. And you said, let's break some pieces off, and we won't charge you that much. But we'll basically charge you for usage of certain components, and you'll have to pay less way of subscription. And then the next evolution of the market is now saying, hey, maybe we'll charge you a really small amount for subscriptions, and everything is consumption based. Because what are customers pushing for robust. What are customers putting forward, they don't want to have to have that high a capital expenditure on the business. They'd rather take some more operating expenses sometimes. And now you've got the option to say, hey, I want to buy this full blown product, or I want to buy the small product, but then I want to add consumption on top of it. So that's the market evolution that's happening. The second market evolution that's kind of happened over time is, you know, we call subscriptions. So 15 years ago, it was always going to be yearly billing once a year. It moved to monthly and then over time, it's moved to month to month and things of that sort. You had contracted, now you've got un-contracted, which are perpetual in nature. And so with that evolution in the market, there's a lot of billing changes that are happening. And the third evolution that's happening in the market is you know, 15 years ago, a lot of companies are focused on saying, I want to build a subscription system or a billing system, and those things are starting to now come together. And so if you want to keep up with the rate of change that's happening in the market, you've got to build all this stuff yourself, or go buy somebody who's good at doing just that piece. And so that evolution is now I mean, is where we've gone from saying, hey, you had a billing system that's been in place for a long, long time. But we're at a point where we'd rather get to some industry standards, and people will keep their systems up and running and up to date, so that we don't have to build all those features. But we can start leveraging those features, and adapt as the market changes.
Because we're not experts at billing, somebody else's. So why not have them do it?
Fair, fair point, Arvind. So now let's talk about the challenges or pain points of friction, as you might call it in this Quote-to-Cash stack from your viewpoint.
There's some interesting challenges there in Quote-to-Cash stack. Here is one that I'll give you. A CPQ usually doesn't do order management well. And when you go start looking for order management, the first place you look for order management is in is more solidly, ERP or CRM. And so when you look at CPQ, is most of them are focused on CPQ and maybe get into billing, a lot of them are not focused on getting to order management. And the reason they're not is because when you look at the subscription industry, there's not really a large need for order management. You buy, you provision, you're done, you get built. But when you're talking to somebody, like you know, somebody in the Telco space, like an 8x8, we're offering telephony services on SaaS. There's an effective need for order management. Because you've got people ordering hardware, you've got people ordering lines, you know, it takes some time to get those lines deployed. Even though you can turn it on the cloud immediately. I can't get, you know, 500 of my users to switch phone systems tomorrow. Maybe I have voice prompts that need to be configured. Maybe I've got to get call queues in place, which routes the phone lines when the call comes into contact center based off of the phone quantity, and so takes time to configure all those things. So there's a whole concept perform management. And then there's a second concept that order management has to play with the telephony company is the need for serialization, which doesn't exist, SCP, cannot tell you what I mean by that. Today, if I were to buy an antivirus license for 100 users, I get one license who works for 100 users. Done, I don't need to know who the 100 users are none of that stuff. But when I'm buying a phone line for 100 people in the company, I can't now take Sandeep Jain's phone line, and give it to Jeff. But Sandeep Jain's phone line is Sandeep Jain's phone line. He has got his voicemails in there, it's got his recordings in there. And simply if I pick it up and hand it off to Jeff, guess what? Now Jeff has access to all that which may not be good from a privacy perspective and many other reasons. So now you've got the whole concept of feeding serialization, which doesn't exist in the CPQ. I haven't come across a CPQ in the market that deals with taking one license and blowing it up. Because all of them deal with them as an asset, and an asset which has 100 seats of antivirus and that's it. But now I need to know what each of those 100 seats are? What's the serial number for each of those 100 seats, or what's the license for each of those 100 seats? How are they assigned to people? How do I upgrade Sandeep Jain's phone line for an upgrade, or how do I cancel Sandeep Jain's phone line if I want to do a cancellation because a cancellation and the CPQ is taking a license count down from 100 to 99. But it doesn't mean that it takes down Sandeep Jain’s license just mean this takes down a license. So now you got to start looking at the next evolution in my world, pleased to say how do I cater the CPQ to a specific industry?
Got it. So the first challenge you talked about as order management, we're just going to interesting, which I think is probably an artifact of the vertical like telephony that you're in and be the fact that you have hardware associated with what you sell. Okay, anything else?
So order management was the one, serialization was the second. Now if I just look across the CPQ stack, is another interesting one that comes to mind. Why do people see errors in billing?
It's a rhetorical question, or you want me to answer?
Think about it. It's a very good question. Because if you see errors in billing, let's put it this way. Billing does nothing, it's a pretty dumb system. It does what you tell it to do.
You send it garbage, it's going to spit out garbage. And most people who say that they've got a billing problem, are usually trying to battle the symptom and not the disease. Because they go look at billing as a place to solve the problem. And many times, what you will see is the problems, you'll realize, I've seen the CPQ stack or the order management stack, or on the serialization stack. So that's another interesting thing that happens. And then the last thing that you kind of got to see is you know, as the system start to separate out, we've been CPQ, and billing, and ERP, which is where you're doing your actual booking and RevRack, and all of that stuff, the stuff that happens over here and CPQ, that doesn't necessarily get seen in the ERP. There's a lot of customization you've got to build to make that happen. So if I sell something as one time SKU and my CPQ, but as the only way to monetize the revenue over two years for that SKU, because that's the life of the contract. What the heck do I make it happen? Because the way accounting does, accounting is vastly different from the way you do selling. And so some of the challenges are the ones bridging those gaps across the needs of multiple teams.
Understood. Arvind, a few follow ups here. So how are you doing order management today?
Very carefully. You know, so we essentially built some custom solutions on top of our CPQ to do our management. That's what we had to do. And then there's not just custom solutions, but there's also a lot of manual processes and manual interventions that have to happen to it. So it's kind of multi fold.
Got it, and you talked earlier about ecommerce channel and I didn't hear you say that as a pain point. How can you, was it straightforward to take your CPQ and billing stack and expose it to the ecommerce or where?
Great question. So the short answer is no. But here's why it's not a pain point. The way we chose to build ecommerce was this, a couple of guiding principles. One, what the customer sees, and what the customer has to do, has to be easy, simple, and painless? And so the first thing we did was we separated our ecommerce stack from our CPQ stack, there was no direct integration between the two. So we made sure that the customer could buy what they wanted to get, their lines will be provisioned, and they will be able to use them, separate from us having to make sure that all of the order processing happened. So through the ecommerce flow, they purchased the phone line they wanted, they gave us their credit cards, we did what was needed. And then we essentially went back and back filled our CRM, CPQ and billing systems using API's to seek the data in the right places so that the future of billing will continue to work seamlessly.
So if I understand you correctly, what you're saying is, you copied your product catalog from app to CPQ into something else, and where that ecommerce transaction takes place. And once the thing is finalized, then you do an asynchronous kind of thing with this now Quote-to-Cash System. So they kept independent.
Exactly. They kept independent, because here's what happens. So a couple of things. See, there's nothing wrong with these infrastructures. But these infrastructures are purpose built for certain things. Like when I look at a Salesforce infrastructure, I mean, Salesforce is evolving. They have started to make some of these changes. But when you historically look at a Salesforce infrastructure, it's very processing heavy, it's not expected to respond in sub one at one second API calls and things of that sort, which is what you need in the ecommerce world, you want something that goes fast. And you don't want to wait for all the processing to happen behind the scenes. Again, not a knock on Salesforce. It's what it's built for. And they are evolving that infrastructure with other things that we've been adding over time. But when you look at ecommerce site, you're looking for something that's up and running all the time, that's reliable, that responsive, that's scalable. And so we basically, instead of trying to pull Salesforce every time, we basically print that catalog, and this is the thing what I did at Malwarebytes too.
And Arvind, we talked a little earlier about build versus buy. But in this particular case, it seems that you chose to go with the build approach.
Yep. We did. We chose to go with the build approach, because one ecommerce was new 8x8. We were trying to figure out what and how much we put for into ecommerce and the beginning of was going to be small, footprint wasn't going to be very large. And for purposes of testing the market, we did not want to go invest millions of dollars and you know, going and buy a custom package doing an implementation of the custom package, because it was new. We still wanted to test the waters, we wanted to see what we could and could not do.
Any, Arvind, side effects of separating that? I know you get efficiencies, because now these two systems are separate in some way. But does the separation cause some undesired side effects as well?
Well, it does not cause undesired side effects directly. But one thing you've got to keep in mind is if the underlying Salesforce CPQ system changes, the ecommerce input to that has to change hand in hand. So if I decided that one more field became a required field, if I change, the validation on a field, on the support system, I had to make sure that the ecommerce system could meet the same validation needs for instance. So if that's true, not just from a Salesforce perspective, but that's also true from a licensing system perspective. Any underlying system that could change we had to accommodate it.
In your ecommerce, I think I forgot to ask earlier. Is it like a credit card transaction, or is there quoting and invoicing happening on ecommerce as well?
It's a SaaS like transaction, we're going through an onboarding flow. And to that onboarding flow, we collect a credit card along the way.
But if I want to get a quote, and I don't want to pay through a credit card, because my company does not want to put that charge, can I get a quote on your ecommerce?
Not right now. Right now you got to get, you can request a quote through our website. And you know, one of our sales team will pick it up and give you the quote.
Understood. Is this a requirement that you see? Like, how big of that thing is, or is it even a thing?
Getting a quote online?
I think it's still a nice to have. I don't think it's a must have yet.
That will change in the next many years likely.
Yeah. I'll tell you that when I talk to people, I've heard this thing though I don't know how true that is. But I've heard that any deal, which is sub $50,000. You don't want to involve a salesperson. And if your deal is like less than $1,000, it's a clear credit card. But that boundary between $1,000 to this 30,000 or $50,000, that's the space where you don't want a salesperson to be involved. And you want online self-service, zero touch, no touch or whatever phrase goes?
Let me tell you, that's where the industry specialists and I'll use an example for you. Would you buy a car online?
A 100% online?
Some people do.
No, would you?
I did, actually.
Okay, how many people would?
I don't know about that. But it's done today.
I know it's done today. But how many people would have? What's the market penetration for that pretty small? Light at all. Good question, but it's pretty small. And so the reason I asked you, I asked you that question, like you said, sub $50,000. There's a lot of sub $50,000 cars out there. Most of them do not get bought online.
Yeah, that may be an artifact of the auto industry, which has…
Exactly, it’s very industry specific, and products specifically depends on what how complex your product is, and what your industry does?
And so yes, somebody might tell you a sub $50,000 is okay to buy online. Other folks will say no, because the complexity of the product or the artifact of the industry, or how business is done in that world impacts it.
Well, absolutely, absolutely. And you're absolutely right in the sense that if your product is self-serve, like the experience itself or self-serve, then you can sell it and do whatever it like, you don't need a person to usher you through that experience.
And but for certain kinds of products, you may need, like configuration to be done before you can make use of it. So you of course, want the person to be more there.
Exactly. Let me give you another example. What would sales really like to do a $10,000 deal online? I don't know. And the reason I say I don't know is this, is the customer picking the right product that they want, or is there an opportunity to upsell them which would not be there if you just do it online?
Yeah, I think it goes back to this complexity element. Like if the product is easy to understand, the customer says, Look, why do you want me to talk to a person? I just don't want to talk to anybody and I know what I'm buying. But if the product is complex, then of course, you have to talk to a person. So I think it's a function.
That’s exactly what we did on our ecommerce space. Simple product, put it online, complex product, get on the phone.
Yeah, make sense. Hey Arvind, shifting gears a little bit. If there are product managers for these vendors, in the Quote-to-Cash listening to this podcast, what would be your advice or recommendation to them and how to rethink you know, the things that you're facing problems in your Quote-to-Cash or the things that you're thinking about?
Great question, so here's the thing. The whole CPQ ecosystem is built for subscriptions. And not built for serialization. So every industry has its own specific needs, and the Telco space, there's only so many companies out there, so it's obvious that, you know, they will not necessarily build for Telco, or build for leasing or build for a specific industry, because you're looking at mass market every time you bring a product out the door. Right. But then when you start looking at evolution, the question is, where do you evolve? Then you've gotta evolve to a space, which is mass market for you, otherwise, there's no dollars behind it. They completely understand that from an ecosystem perspective. So you're not going to build a product, which five companies they gonna use, you're gonna build a product that 500 companies they may use, or 500 companies they may use. So if I were to talk to product managers in the space, the real question I would have for them is not necessarily built for this. But it's really a question of, how do you keep things like CPQ at pace with the industry, or with the technology industry and so on? And for example, I hardly see a CPQ out there with too much around rules management or rules engine behind it. Yes, there's some they're scratching the surface. But in reality, how can I help? And those engines have been around for over 20 years at this point in time. But how can I start incorporating technologies like that into my CPQ, which makes life easier, which makes life a lot more robust for us to use. Again, like I said, there's some out there which are already doing it, but they don't necessarily give you all the flexibility you want.
Understood. Arvind, on a related note, what about this problem that I hear consistently? What's your take on this about product catalog being different from the CPQ to the billing to the ERP?
Well, I wish I could show you a picture I have on my, which I built. And this is something that I built back when I was at Symantec, I'm gonna say, what, 14, 15 years ago, and it's something I've evolved over time. And it's a picture that I check, which I kind of carry because here's the one thing, when people say, hey, I want to set up a SKU in the system, what do they think about? It think about an eight digit number. There are a fair statement, Sandeep?
Think about launching an eight digit number. But here's an example of what a SKU was. It's not an eight digit number because you've got catalog elements there from a selling perspective, which have things to do with bundling, packaging, pricing, discounts, merchandising features, then you've got ordering elements to it or on coating, putting it in the cart. What rules do you have in a cart? How do you present it for example? Do I want to present a bundle as a bundle, or do I want to throw its elements broken down? Then you've got the whole subscription management often allotted. I'm sorry, that's a long winded answer. You've got to deal with renewals, you got to deal with cancellations, you got to deal with add-ons, upgrades, and you got to deal with fulfillment, provisioning, tax, accounting, billing metrics. That's your eight digit SKU.
And it's different for each one of those folks. So when you're looking at building a catalog, you got to find a way to pull the catalog that's going to accommodate all those needs. All you build separate catalogs for each one and then build an engine that translates it as it goes through the various systems.
So in your case, Arvind, this was interesting. But in your case, you're using three separate systems for billing, ERP and your CPQ. So does the difference in product catalogs affect you in some way, or is that a…?
So we're using three different systems but we've aligned our catalogs to good extent, that doesn't mean we don't have problems, it's just that it works for the way we build things. Can it be done better? Absolutely. For instance, tax actually has its own catalog which is different from the rest of the world. And we do maintain these three catalogs at least in alignment between our ERP, our CPQ, and billing Union. But there are actually things which have different catalogs on their own. For example, our provisioning engine has its own catalog where I sell a SKU, but it breaks down to nine different things in provisioning.
You already mentioned that ecommerce has its own catalog as well. And you said there's a person in your team who works on product launches. So is that a huge pain when you're launching new offerings that you have to look at these different catalogs and see what you can do, or is this like a check mark thing or checklist thing that you have to just take care of it?
Here's what we did. Nine months ago, we actually put out a template, which brings all of these things together into a single place. Yes, it's a huge pain to get the template filled out. But what that did for that as well, we made sure that everything that was needed to launch a new SKU came in together in one place, and any dependencies can be identified together. Before that, what would happen is, you know, the product manager would say, hey, I want to launch this new product. Great. Thank you. What's it? Tell me what it's about? What's the packaging? Great. Now, let me take this go to Marketing, what are marketing needs, or he tells me this is all I want to go to market. Other sales want to sell it? Oh, I want to sell it differently. How do you want to tax word? I don't want to tax it that way, I need to SKU broken up into five things to tax it. And now you got somebody in business applications, who's running around all over trying to find a way to connect these together. Our goal is to basically bring everybody together upfront to knock these things out. Because then you can easily get into saying, here's how I can build it. As opposed to saying, I'm going to cater to everybody's needs. And each one does not match the other ones needs.
Got it. And, hey Arvind, on a semi-related note. Assuming, based on what you know right now, and you have a clean start in setting up a Quote-to-Cash stack, are there any things that you would do differently? And I'm not talking in just in terms of you know, I'm not talking in terms of like picking vendors, but conceptually, would you do anything differently if you were to start a fresh in the Quote-to-Cash, and assuming there are separate channels?
Yeah, absolutely right. Let me put a little differently. And I know this podcast is monetization podcast but here's the thing. When you're looking at Quote-to-Cash, you're not looking at Quote-to-Cash, what you're really looking for is a monetization ecosystem. A monetization ecosystems goes like, just goes a little bit beyond Quote-to-Cash. It goes into things like commissions, it goes into things like partner payments, it goes into things like affiliates. There's a lot of other things that come into a monetization ecosystem when you kind of zoom out and say, is this just Quote-to-Cash because everything that happens in Quote-to-Cash affects all of these other things around it. So you need to first make sure you're building an ecosystem. So would I do anything differently? Absolutely. And this is a principle we applied, I applied when I was back at Symantec, where we were building a transformation where we're building, we're bringing in all of our ecommerce and auto renew, auto billing and everything else. We spent hours on end, laying out use cases, laying out every example and taking it from beginning to end. It wasn't that we spent time just with sales working on a piece that sales wanted or just with finance, looking at a piece of finance wanted, because this thing needs to tie across the world. And so if you've got a problem here with taxes, now you gotta go revisit your SKU silos catalogs and say, how can I do my catalog differently to make sure I don't have a taxable? Then you get down to revenue account, and your revenue accounting says, Nope, I need RevRec done differently. Okay, that means maybe the auto placement needs to change in how the auto placement happens, or maybe how you do your pricing needs to change. And so laying that down across the board is very hard to do, but it's very essential to do.
And if you can't see that picture end to end, you're going to have something that's broken when you can add to go or many things that are broken out.
Okay, interesting. Arvind, slightly different question. But what are the top priorities for you and your team in the next coming quarters?
Well, I think the top priority for me and my team at this point in time, is to make sure that we get our security systems better structured, scalable, and working end to end, like a well-oiled machine, without people having to touch it along the way, unless they're just looking to place an order.
Okay, so it's like optimization of the stack in some way.
Optimization, scaling, performance, and reliability.
And I'm just trying to imagine what kind of work is in more. Is it like making your connectors efficient, I'm just trying to translate into actual work of what you say?
If you were to translate into actual work is not just getting our systems efficient, but it's also aligning the systems with the processes, the policies that need to go with it, and get everything moving in the same direction.
And, of course, the systems are important because they need to be reliable and perform for scale. But we also need to make sure that people using them are enabled to use them right.
Last question Arvind. I know this has been very interesting in depth conversation. But do you see any intersection of AI, ML, you know, the fancy words in Quote-to-Cash? What do you think about that?
There are some key areas where you could. See, if you kind of look at where I'll take my Quote-to-Cash data for a second, put on my ecommerce site and see where does, AI, ML play a nice value on there even in the ecommerce flow? See, a lot of us around pricing offers AV testing, and you could absolutely do that in a Quote-to-Cash ecosystem. But obviously, published pricing is something that's very important in the B2B world. To play with pricing is less of an issue, but maybe playing with offers or even in terms of saying, how can I surface a better information to the salesperson when they're working with the end customer? Be it in terms of offers, be it in terms of questions that they might ask, be it in terms of anything around the conversations they're having with the customer? Upsell opportunities, things of that nature all come into play.
Interesting. Is it something that you see happening already, or is this something that you think would or should happen?
Well, product recommendation engines have been around for the longest amount of time. So other CPQs have tried to do it, but I don't think anybody does it very well yet.
Our product recommender is definitely something that would be useful, because now we can ask the customer 10 questions and say, here's what I would offer you. It will be much easier than saying how many people are sitting in your company, okay, wherever they said, how many phone lines you need, how many call, or you know how many servers you have, see them saying? Maybe some other key questions might help in terms of building a product recommend.
nteresting, Arvind. That brings us to the end of this podcast. Arvind, this was a really a fascinating conversation with you, especially going in depth into some of the topics we discussed earlier. But before we go, could you share any resource like a book, a blog or a podcast that you would recommend to the audience?
Well, there's multiple books have read. Being a product manager, there's two things that come to mind. There's an interesting book I read last year. It's called “Principles”. It's by written by Ray Dalio who's who started out Bridgewater associates. And he talks a lot about putting systems in place. And it's something I use not just at work, but also in life. Right about putting systems in place allowing me to make things continue to run. That's one interesting that comes to mind. But the second interesting thing that comes to mind is a book called “Boundaries”. And I'll tell you why it's important for product management perspective and product management perspective, you need to learn to say no, a lot of times, and this book called Boundary is all about setting boundaries, but it's about setting boundaries in life, but it's also a great way to think about how you go about setting boundaries at work and how you learn to say no to things and stuff like that. So I think those are two that come to mind right off the top of my head.
Okay. Hey Arvind, once again, thank you for your time today. This was a great conversation.
Absolutely, thank you for having me on Sandeep.