Unity has two separate businesses - Create business: traditional Q2C process, and Operate business: very different i.e., ads-tech, usage-based, and as such their sales process is very different Customers are across different verticals — automotive, media, gaming, etc.,
Hi. Welcome to the 2nd episode of “The Enterprise Monetization” podcast. And this is your host, Sandeep Jain. In this podcast, we invite thought leaders from monetization space that is CPQ billing, revenue operations, so that you can learn about challenges, opportunities, and best practices in setting up an enterprise monetization stack. Today, I'm pleased to invite our guest, Justin Wong. Justin is the director of Enterprise Architecture at Unity Technologies. Previously, Justin was at AppDynamics, GoPro, StubHub, Bluecoat, and Siebel. Quite a diverse range of companies if I may say. Justin, I was asking Justin earlier before we started the podcast as to what his fun activity is? And he shared that he likes to do dishes at home, as it gives him some quiet time. And I was telling him that, you know, this is something that I love to do as well at home. So we share something in common besides our passion about Quote-to-Cash. Anyways, Justin, welcome to the show.
Yeah. Thank you, Sandeep. Thank you for having me here.
Great. So Justin, we know what companies you walked out. But can you just provide a quick summary of your professional background? Like, what made you so fascinated about Quote-to-Cash space?
Yeah, definitely. So just a little bit myself. I've been working in IT for the past few years, you know, focusing on CRM, ERP, Enterprise Architecture, Integration and BI. And during this time, now, I have experienced working on premise application, and then the transition to cloud applications. And in doing that, I know have that several Transformation Initiative in defining core business process and technology stack. And then it just got me a lot of experience working with Quote-to-Cash and something there seem to be not a one size fit all solution. Every company has different flavor, different business model and processes. So there are definitely challenges. And I'm very passionate on kind of how we get better in fine tuning the Quote-to-Cash process.
Got it. And Justin, can you tell us more about what Unity does if people don't know? And a little bit more about the team that you work in? How many people what you guys want the charter of the team is?
Sure, definitely. So Unity, especially the world's leading platform for creating an operating library of time 3d content, especially a platform that is a very, has a comprehensive set of solve a solution to let you create random monetize interactive, real time two dimensional and three dimensional content permanently like for mobile, tablets, PC console, and, you know, augmented and virtual reality devices. So at Unity, we have many creatives basically bringing from game developers to artists, to architects, automotive, filmmakers, and there's other various users, that use our Unity platform. So basically, there is a platform is an engine to let you create a lot of content, not just for gaming, but a various different vertical industries. So in terms of how we structure as a team at Unity, there's like two distinct lines of businesses. We call them like operate and create and both of these businesses are very different right in terms of their sales processes, sales motions. Create businesses geared toward a traditional you know, Quote-to-Cash process like using your traditional CPQ process. Whereas operator is completely very different, is based on because operator in Unity, we also have an ads tech business. So it's based on monetization and as well as usage base product, so their sales process is entirely different between create and operate. In terms of one my role here at Unity is that I'm responsible for the overall enterprise architecture, verify business system by supporting the various business units such as finance, sales, marketing, and engineering. So my team provides architecture oversight, customer development, design, and billing integration. So we work closely with our business partner right across the company to understand their gap, their needs. And how do we provide better automations around their processes and key processes such as Quote-to- Cash, procure to pay, financials, online integrations and all that, you know that impact our revenue base, bottom line as a company.
Got it. I have a few follow ups here, Justin, with you. Unity, I suppose does somewhere around 800 to 900 million in revenue, annual revenue. Is that correct?
Yeah, currently, where last year we did, as I remember. I mean, it's public information. I think it's around 70 or 75 million for 2020. So yeah, that's 2020.
And then the reason I'm going over this is just to understand the scale of your operations, and not specifically the number. And you talked about create and operate. I want you to understand who are your specific like customers? Are these like the long tail of mobile app developers? Are these actual companies that you work with? And this has, I'm sure, a bearing on your Quote-to-Cash like, is it a self-serve thing? Is a direct sales lead go to market motion that you guys have?
Yeah, so it's a combination really. There's definitely a smaller company. The smaller developers, I think we call it Indie, which is like 10 developers shops, and it can be as big as the bigger company like Zynga. So that uses our product. So it varies. So from small company, you know, from 5-10 people to bigger company. Our customers also consists of not just like, under gaming industry, but also on as I mentioned, our product is useful by automotive industry, by media, like by Disney. So if the platform itself is geared toward those, not just gaming, but other vertical industry.
Understood, understood, and do use all these different levers in the go to market like self-serve direct sales partners. One is more predominant than other.
Yeah, we do have self-serve but it is a smaller customer base right now. At the Unity site a single user can just subscribe to one license where you have a Unity platform. And then on the manage customer, which is enterprise customer, we go through the traditional Quote-to-Cash process. And that goes into our back office system to go through the sales process, go to sales motion, and walk in the deal, where we have our bigger customers.
Understood. And which is your predominant channel, is it your direct sales is the most dominant or do you have partners also in your go to market?
We do have partners. Most of them, I think are outside of US. But we do have partners in APAC, who have helped us go through their sales motion with that. In terms of the split level, I think it's more, we do just a volume. There's definitely more volume on the self-service channel in a high volume, low dollar. But on the other direct sales, traditional route, we definitely have the high dollar lower value, but the sales cycle is definitely a little bit longer.
Okay, I'm assuming the direct sales is your predominant channel, as the size of the revenue?
Yeah. In terms of sales here. And yes, we talked about dollar value, direct sale is the higher.
Can you talk about the Quote-to-Cash stack for these three different channels, like yourself serve direct sales and partners?
Yeah, sure, definitely. So for the direct sales, we have Salesforce CPQ, which is to go through the sales process of creating an opportunity quote, and contract. And then for the billing side, we have Zuora. And for revenue recognition, we have RevPro and for financial reporting, we have Workday. And through the stack, we are using mule soft to build a custom integration, between the various systems. So how will we create a quote and contract where we need to integrate that to Zuora. How are we going to build a customer, and then from Zuora to RevPro, there's a native integration to how we're going to recognize revenue. And then from the Zuora billing inside, we need to feed that information to WorkDay for that financial reporting. So that's the kind of the Quote-to-Cash stack for the direct sale. In terms of the self-serve online, that is still more on the legacy side right now. So we have a legacy ecommerce system that handles all the billing, the subscription base, the smaller customers. So that is to be determined on how we're going to move that into Zuora. But that's the kind of the next initiative at this year. For online, the plan is to move all those online customers into Zuora to do our billing, and then for the reseller direct is typically just, it will go through the regular direct sale Quote-to-Cash stack.
Got it. And I did not ask you this earlier, but do you do business in multiple currencies, or is just USD?
Yeah, we do business in different currency. So we support Euro, GBP, some are in GBP. Mostly Euro and USD, we have also a big impact in the APAC region. So we support Japanese Yen, Chinese Dollars and offering.
Understood. And also, how would you say it's number of SKU’s? Like are these in 10s, 1000s? I don't think it'd be in 1000s. But could you give us a sense of how many SKUs that you're managing?
I think I mean, we do have legacy stuff. So I will say in the 1000s, I would say it?
Yeah, awesome. Got it. I remember when I was at my one of the previous companies, I manually added roughly 800 SKUs for a product that I was responsible for. So I shouldn't be surprised when companies 1000s of SKU’s.
Yeah, I mean, part of it is something that is legacy, or you still need to continue to support something that legacy building. So you need to create those SKU’s. But as we go through the introducing new products and whatnot, so we can get more SKU’s to our product offering.
Fair, fair. So this is great. Justin, now, if you take a look at the stack, and you zoom out, what are the biggest things that the challenges that you see in the stack today, and you think that could be improved by either better products or by better processes, any view on that?
Yeah. I think, several challenges. First of all, first one thing is the ability to quickly set up the various billing charge models. For example, you just billing and go to market and now we're gonna sell usage product, I mean, that's going to be the future. Is how the ability to set up the charge model? How do we handle the different usage charge model for tiered pricing, dynamic pricing, so somebody who paid and usage discount, I think, that is one of the challenges. And the other one is, once we get into the online, supporting the online customers, because online customer in the census, some of the smaller but they have more diverse right, is supporting the various payment gateways for the international community. Because once you get outside of US, like Europe and APAC, they have various payment gateways, like the Alipay, the WeChat, with a different region. And supporting that is important because they are our customers. Especially if we'll plan to grow the market in those regions where we need to be had the ability, which is the GSF payments, right? And different types of gateways not just like a credit card through WorldPay, but we need to support a different payment method to allocate. The other challenge know for us is because as I mentioned, we have to treat these things business units, create an operator is to streamline and standardize the processes. The sales process, the sales, motion, sales prices can be different, but some of them is how we going to build them with the customer, is going to be somewhat similar. So it's hard to have the same process and standardize it, is kind of some, you know, design work and how we're going to come to that, you know, a standardization.
Got it. A couple of follow ups here, Justin. On the usage side, you mentioned that this is a problem and this is the future as well. This is what I keep on hearing by the way from the industry as well, can you talk about like a couple of challenges, specific challenges that you see implementing those? Is it around setting up the usage? Like what kind of usage you're going to build on, or once you've decided, what usage axes are monetization axes that you guys are gonna follow? Implementing that is a challenge, like, is it the volume of the data that the billing system can consume? Like, what's the specific pain points or Achilles heel, if you will, for this implementing usage?
Yeah, I think it's more so is when you have a stack, credit cash stack like, for example, like Salesforce, Zuora, how we set up products that can be different? So that that needs to kind of mirror each other. So when you set up a product for usage is not going to be same thing as how you're going to set up the same usage product in Azure, because the data model is different for one thing. So part of the challenge is how do we map them correctly? And then at the same time, when you even though you set up the product, then how do you query a quote, in a contract that can also map accordingly to how we're going to do the billing in Zuora. So figure that out because they're not a comparison of apples to apples because they're two distinct, different platforms. So having them talk to each other. Something that you've done this up figured out, it's the mapping between one data models to the other data model. And then, of course, how do we automate the usage back to Zuora is also a challenge. So based on which product. There's a back end on how do you get some of the aggregation of the data pushed back to Zuora for each subscription so that we can build a colony for each customer? So because as we introduce more usage based product, where you need to automate the billing part of it, you cannot just continue to manually upload the usage. It will work probably, as a short term, but you know, long term as the volume is growing, it's not sustainable.
Now, that makes sense. I think the usage model best implemented by the cloud vendors, where you can go to AWS and figure out on GCP, or Azure for that matter, and figure out what your current usage based bill is based on how many compute and memory cycles that you have done, there needs to be, I guess, a self-serve experience around I guess what you're talking about as well. Interesting. And usage, is this like something that you guys are thinking about, or is this like, actively a requirement from you guys?
It's actually a requirement, we have set up quite a few of our usage products already, so that we have run through our Quote-to-Cash stack. So at this is, some of them is online. And some of them is a direct sale, which is run through from Salesforce to Zuora to map out how we're going to map out the contract out of Salesforce and into Zuora Billing. But that's something that those products are pretty straightforward in terms of how we measure, how we aggregate the data and measure the usage data, is when we get into the different parts of offering, you know, once you get into like, what have what you just mentioned around the different supporting the infrastructure base. Like AWS and GCP, those can be challenging because they has so much usage data. And the prices can change, based on how you set up? So you need to account for that. The volume of that usage, they can multiply.
Fair, fair. And with regards to your second point, Justin, about the payment gateways, multiple payment gateways, is the pain point just the ability of the billing system to support different payment gateways, I guess?
Yeah, yeah, exactly right, like Zuora right now in the process of building a general connector that can connect to various payment gateway. The pain points is that especially from online, customer, if you want to take them on the online community, you supporting the different payment gateways in a different region is very important.
Understood, understood. And let's take a take a different sort of step here. Assuming that you are restarting this thing, and you get to design these systems from day one. Would you choose your, would you do any things differently with this Quote-to-Cash system?
I think is to make sure to understand the business operation, The business requirements are very important. Understanding the different scenarios. What kind of products? How do we bill? It's important, because when you choose a stack where you need to take into consideration, the end to end solution, how do you recognize revenue is important. And then by the same time, the stack you choose where they should be flexible. And the thing to consider is, do you want to build integration between the stack? So it really depends on the use cases. Because if your company has different barriers offering, product offering, if it's subscription based and no usage, that that is a very straightforward way to implement a Quote-to-Cash stack, you know, by choosing either, you know, Zuora or Salesforce CPQ, or whatnot. But once you get into some of the complex use case, there may be you know, consideration of what type of customer integration is needed to do this.
Interesting. And this is what has actually consistently come out in my conversation with folks is, when people make decisions, they're making decisions for the requirements of the company at that point in time. But as you talked about just an earlier that, like usage is now a key requirement for you guys. Business Models evolve, channels evolve, so there's always a struggle between what you want to do right now versus what is available versus how much you should provision for what you will need in future. And there's not always a clear answer on how to navigate that conversation?
Yeah, there isn't. I mean, in hindsight, I mean, y'all can look at, you could have done this better. But you're not going to have that luxury. Once you implement a stack because you have invest the time and money to build a stack. So that's also something to consider. I think, before making any decision is to better understand the business use cases, and try to understand the operational side as well. Because you want it to scale for one thing, and when you want to have an ecosystem that's flexible, configurable, and the time to market is critical when you introduce new product as a company, you don't want to take a long time to set up a product to go through a Quote-to-Cash stack.
Got it. And how much is that time roughly for you guys for introducing new products or features? Is it in days or weeks?
I think it's in weeks for us. Because especially when you have a new product you want to go through, it's not just all of us creating a new product. It's not as simple as that you have to make sure that you have go through the testing to make sure you can create quote, you can. And then after you create a quote, and you go to billing, and you want to make sure that building comes out correct too. So that is definitely is a long cycle, every time there's a new product that needs to be set up.
And since you brought up the topic of testing, how easy or difficult the testing part of? I haven't heard many people talking about this, but I think it's it seems like a big pain when I talk to people just want to get your perspective on the testing side of things?
The testing is different, it takes time. Because we need to be able to set up the proper use case. Especially, let's say there's a new part of our usage. Because now our users privacy is going to be the same. It says but especially if there's a tiered pricing. And then you go to the motion of go through the test, you create a quote, you create contract. And then once you get into billing, you need to make sure the billing is correct based on the tier pricing. So you have to validate the outcome of the billing, so that that can take you know, a couple of weeks, if you got it the whole cycle.
Is this automated, by the way, testing? I don't know enough about this. So I'm asking you, is this testing automated, or is this like people involved in manually creating this and manually reviewing the results?
Well, right now it's manual. Well, we can definitely automate the testing, and create go to you know, a Selenium kind of test automation to actually automation to create this, but on our end, it's mostly human tasks right now.
Understood, understood. And shifting gears a bit, Justin. I think you talked about a couple of things, but what are the top priorities for you in the next few quarters? I know you talked about usage is a thing for you multiple payment games ways. I think I heard about self-serve going into Zuora. Is there anything else?
Yeah. The other than the ones you mentioned, I think one thing that's been a little bit challenging is, how do we do consumption forecasting? I think that's one of the goals for us in next few quarters. Because I think in Salesforce where you can have we are forecasting on subscription, based on TCP and ACV Contract values. But consumption is different. Because consumers are small, mostly billing area and you don't have some data points, where you can do, how are you going to forecast six months from now? What that will be like, for existing customer based on the usage? So you got to do some estimates based on the consumption forecasting.
Understood. Anything else that stands out in terms of your top priorities, or I think that list seems to be quite full as it is?
Yeah, that's quite full for the next few quarters. Especially we're planning to do a PR transformation for the operate business, but we have some work for the ads business as well.
Got it. And once again, can you maybe folks in the audience understood this, but I did not. But you said this create and operate, I understood was more ads, or ad tech and usage based. And remind me what creed was again? Is it more direct sales driven?
Yeah. Creed business is basically more selling prescription like the Unity platform. So it's my direct sale.
Okay. Got it. And just in any sort of thoughts on Are there any, should there be any metrics, or are there any metrics to understand or estimate the health of your Quote-to-Cash implementations?
Yeah, I think a couple on top of that, I think is probably the average time I'll receive a payment from sales order. And probably average order entry time. So I think just getting those key metrics, and to measure how effective is your Quote-to-Cash process is? Well, we determine success of the Quote-to-Cash stack.
I see. So the first one was once again, this, how quickly you can get money from your, but isn't this a factor of like net terms that you have with your customers?
Net terms and also like the ability like to also create that sales order an invoice correctly, without going back and making an adjustment and so that plays a part into it?
Got it. So it could be possibly around like percentage of invoices that need correction before they are…?
Yeah, exactly.
Got it. And the other one was the quote time? Is it like the time it takes to generate the quote?
Yeah, the average time to create an order basically.
I see. And are these in like, seconds, minutes? Like, what's the timeframe for these things?
I think is more, so how effectively you can create a quote, and then from the quote to a contract and then sink that into unfulfilling. So that in terms of that cycle time. How long does it take away to for that order to be created?
Got it. And Justin, on a different note, since you have worked on these products for a long time, and is there any vendor sort of listening? Do you have any recommendations on Look, guys, you know, this is how the products need to be redesigned or need to be thought through to solve or make it easier for practitioners like yourself? Any sort of product ideas, or suggestions that you have?
The main thing I think, in my experience is we need the platform to be agile or conflict from vigor and flexible, because selling is very important to the company. I think a platform needs to have that capability. And it's not about writing quote or writing you know, just what a current capability is. The platform that you have that capability that is configurable without much needed customization. I think that's a key in my experience to have a good platform, a Quote-to-Cash platform.
Got it. And on a scale of one to five, where do you think that the existing ecosystem is standing like five being absolutely massively good, and one not being good. What is this industry straight right now on this thing that you just described about agility?
I think three average you know, in my opinion so far.
Understood. And related point, and this is something that comes quite often is, how to structure Quote-to-Cash teams internally? Is that IT sales? Is that IT finance ops? Is it one team sitting in engineering? Should it sit in IT? So any thoughts on how people should structure their Quote-to-Cash teams?
Yeah, I think, you know, from the business side, you gotta have operation team. From sales, there's a sales ops team, and then finance very this collection and operation ready to do to do the collection payments from the customers. And IT will kind of work alongside with finance, and the sales operation team to help facilitate or help build this process along with them. So it's important that we have the finance and sales operation team included, that's what I called a Quote-to-Cash because they are the one that we run into day to day operation and in creating the activities in that process.
Understood. And Justin, I think you mentioned it earlier, but how big is your team at Unity for the entire Quote-to-Cash implementation?
Just my team along me. My team, I mean, responsible for various other stuff as well. But just in general, you know, in terms of my team size by 20-25 people, so
And you're part of the IT team at Unity?
Yeah, that's correct.
Okay. And could you also give an indication of like, how many people are like for Zuora, how many people you need to manage internally for Salesforce CPQ workday? If that comes in under your purview, as well.
Yeah, for Zuora right now is a little bit like, we have three people supporting it. Salesforce is a bigger team right now, because we have two different lines of businesses. So uncertain sigh, we have around 10 to 15 people supporting Salesforce but the kind of supporting the different business units, two different business units.
Understood, understood. And this is for the create and operate, that you mentioned?
Yes, exactly.
And this question also comes up as should people take help from external system integrators to map the systems, or do you believe that this should be done internally, or a combination of both I guess?
I think it's a combination of both. We definitely need a sensitive integrator because they can provide some the industry best practice as, you know, the experience as well, because they have experienced implementing several projects on Quote-to-Cash. I think it's a combination. Having internal working, IT didn't turn out, because then we did there needs to be some subject matter expert from the IT side, and then getting the best practice, from the system integrator side.
Fair. And is this SI help required at the initial implementation time, or do you think it is required on a continued basis?
I think it's a one-time thing. Because what was the initial condition where you need that subject matter expert in house where to continue to feel the process improvements to help the business or operate in an efficient manner?
Got it. And the last question, Justin, since you have been in this industry for a while, do you have any sense on where this industry is going, or where this industry is headed or where it should be headed and it is not?
I think, from what I'm seeing, what I'm getting is that, I think there'll be some consolidation. I see that, you know, some of these vendors are going to build a lot more capability and try to have one ecosystem to support the other various use cases. You can see that now with Salesforce. They are slowly. I think they buy almost there. They have the capability to do revenue recognition side, billing, and then CPQ. So I think in the next two, three years, you see a lot more of a one ecosystem that can have other capabilities. One thing that needs to be considered a, we focus so much on the direct sale, but the online community is also very important. So having an ecosystem to support an online community, as well as a direct sale is where I think, you know, something that this industry has now moved to is just one ecosystem. I mean, I definitely prefer a one ecosystem, because that way, you have less customization and less integration to build. And it's all within the system that you can control, a more closed loop process within that ecosystem.
It's interesting, you mentioned that, Justin. In my conversations with companies you know, there's two kinds of companies. One which are, I call like the traditional enterprises, which is more direct sales lead. But they are fanning out into these different things as you guys are as well, in the usage based billing self-serve. So that's becoming a requirement. And the newer, which is more, what you call bottom up sales motion, where it is more product lead growth, you start selling on the web first, and then you go into the enterprise. So I see that you can either start from this end, either top down sales, or you can start from the bottom up sales. But eventually, you need like one system that combines your both self-serve and direct sales. I've even heard like customers who aren't just to sell their products on AWS or different cloud vendors, and you have customers coming from a marketplace channel as well. So there are these other requirements get being added, as well into the Quote-to-Cash.
Exactly. I don’t know where they are. You know, from finance, I didn't want to one centralized place to record the billing. They don't want multiple billing system, and that would just introduce more complexity on how embedded that integration to them put everything into for financial reporting, is much easier to manage, or were the one that uses but in order to get into one ecosystem or even their needs, you have other others capabilities, like I mentioned. It needs to be flexible and configurable to support the various use cases that?
Absolutely. Do you utter a word in Quote-to-Cash? And I mean, AI, do you see any of that conversation happening AI, ML in Quote-to-Cash?
I haven't heard much. I think it would potentially pay a key part. And because if you can build some machine learning language and how you run your Quote-to-Cash especially if you try to get, or the online community, you can put some intelligence in there to help facilitate some online self-serve customers, as well as from the direct sale. You can build some intelligence on how do you, you know, close a deal faster maybe. So I mean, part of that is playing into that kind of process. And AI is, I think, in the future, and maybe in the near future is going to play a critical part of this process.
It's very interesting Justin. You mentioned this, because I was reminded of this conversation with this person who manages Quote-to-Cash at their company. And his dream was, look, if there is a person in my salesperson is putting up a deal for let's say, a bank in India, right? Could there be a system that goes and looks at the past deals that were done for the banks in a particular region, and can auto create a quote. Like just a starting point? So you don't have to look at like these 15,000 SKU’s or what have 1000s of SKU’s, you're not starting from scratch, but you're starting from something that is already filled out, based on profile, who they are, where they are, what they have bought in the past and maybe some home ports. That's possibly a good use of machine learning is just came to mind while you were talking about this.
Exactly. It's just a matter of understanding the pattern right from your existing customer. So you can drive certain logic or based on pattern and kind of help, you know, create a deal or whatnot. This maybe in you know, a deal that a customer may didn't even aware of but then propose something right that they may be interested in.
Absolutely. Absolutely. They just didn't it was such a fascinating conversation having you on the show. Thank you again for your time today.
No problem, Sandeep. Thank you for having me.
