FALL 2018 BUSINESS TRANSFORMATION AND THE ROLE OF CULTURE IN THE SUBSCRIPTION ECONOMY. presented by Zuora

Transcription

1 FALL 2018 BUSINESS TRANSFORMATION AND THE ROLE OF CULTURE IN THE SUBSCRIPTION ECONOMY presented by Zuora

2 What roles does an organization s culture play in determining success in the Subscription Economy? This was the question tackled at the Subscribed Institute s premier Executive Summits held in London, Paris, and New York in Fall Success in the Subscription Economy is front and center for the nearly one hundred companies that participated in the Fall Executive Summits. The events brought together Subscription Economy CXOs from industry leaders including Sage, Philips, RCI, Salesforce. com, Schneider Electric, Unity, CA (Broadcom), Unity Technologies, CA Technologies, and consultants from Deloitte, Accenture, Roland Berger, Bay Bridge Digital, Rumeur Publique, and Simon & Kucher. 2

3 Agenda Highlights from the fall events include: Marc Diouane, President of Zuora set the context for the event by underlining the importance of community in aiding learning and best practice sharing. Tien Tzou, Zuora CEO spoke on the process of determining company culture and instilling it across the organization Amy Konary, Chairperson of the Subscribed Institute introduced Zuora s Subscription Maturity Model, a framework developed by the Subscribed Institute to focus executives on the most important levers that contribute to subscription economy success. Hugo Pinto, Managing Director at Accenture Digital delivered an insightful talk on the key tenets of business transformation strategy. Karen Gaydon, SVP of HR at Zuora led a session on Building a Subscription Culture From Inside Out which focused on the most essential components of business culture behavior, systems, and processes. Daljit Bamford, Chief Customer Officer, UKI at Salesforce.com explained how values drive everyday culture at Salesforce. Tyler Sloat, CFO of Zuora shared a fireside chat with Steve Hare, CEO of Sage where Hare shared Sage s transformation story Zuora CIO Alvina Antar together with Jun Yang Chief Architect & VP of IT at CA and Unity CIO Brian Hoyt explored the dynamics of how a CFO and a CIO work together to envision the process framework, the business model, and then work to implement and align the organization. Dennis Kozak, SVP, Global Sales & Services at CA Technologies shared the company s transformation story. Read on to find out the highlights from our Fall Executive Summits.

4 } A COMMUNITY OF TRANSFORMATIVE LEADERS In London, Marc Diouane, President of Zuora set the context for the event by underlining the importance of community in aiding learning and best practice sharing. We are investing in this community because we can learn from each other, and in return, share our experience with customers that are about to start this journey, said Diouane. As Zuora works with large corporations that are transforming their business model and internal organization to be able either to launch, pivot, or scale a subscription-based business, the company sees first hand that technology can enable subscription best practices, but that subscription business success requires more than a platform. The transformation required is much more profound, said Diouane. We are investing in this community because we can learn from each other, and in return, share our experience with customers that are about to start this journey. 4

5 A MODEL FOR SUBSCRIPTION SUCCESS 5

6 Amy Konary, Chairperson of the Subscribed Institute introduced Zuora s Subscription Maturity Model at the fall events, a framework developed by the Subscribed Institute to focus executives and their teams on the most important levers that contribute to subscription economy success. These levers fall into one of four categories subscription strategy, culture, process, and systems. The agenda for the Executives Summits was focused on these categories. While most Subscribed Institute members indicated that Subscription Culture was the least mature in their organizations, process change management, systems, and aspects of subscription strategy including pricing/packaging were also areas of focus for members in attendance. Which of the following would you say is the least mature in your company? Strategy 8% System 23% Culture 36% Process 33% 6

7 THE ROLE OF SUBSCRIPTION CULTURE Karen Gaydon, SVP of HR at Zuora led a session on Building a Subscription Culture From Inside Out which focused on the most essential components of business culture behavior, systems, and processes. Panelist Daljit Bamford, Chief Customer Officer, UKI at Salesforce.com explained how values drive everyday culture at Salesforce. We ve got four tenants to our values trust, growth, innovation, and equality. Those four values underpin our behavior, our investments into our systems, the acquisitions that we make, and the practices that we live day-in and day-out. It s that simple. As a subscription native from the start, Salesforce.com has built a culture based on trust and customer success. Speaking on the process of determining company culture and instilling it across the organization, Zuora CEO Tien Tzuo felt strongly that a top-down approach doesn t work. I think that if you try to dictate culture from the top, it doesn t work because culture is behavior, it s what people opt to do on a dayto-day basis. The more you have a sense of ownership at the individual contributor level, then the more pervasive the culture is, he said. Tzuo also stressed the importance of customer success winning in a subscription culture. In many transformation companies, teams are functionally siloed because of what we call a hit product culture which is in stark contrast with subscription culture. The goal in the former is to come up with the hit product. And so the structure follows that mandate engineering or manufacturing spends all its effort to come up with a hit product, and sales try to sell as many of these hit products as they can, etc. So they re functional siloed organizations and then you are faced with this different model where you re trying to innovate starting with the customer, and thinking of the outcome for the customer. The only way to do that is to bring a crossfunctional set of people together. You need to re-arrange the systems that encourage large, functional silos. What do I mean by a system? It s how you talk about the company the operating cadence, the metrics, etc. *7

8 KEY TENETS OF BUSINESS TRANSFORMATION STRATEGY Hugo Pinto, Managing Director at Accenture Digital delivered an insightful talk on the key tenets of business transformation strategy. You typically hired consultants to give you answers to your questions. Nowadays, we get hired to help figure out which questions to ask, which is a totally different journey, said Pinto. 8

9 He discussed the challenges of the new world of business customers with ever-changing expectations whether it s B2C or B2B businesses, the rise of cross-industry competition, and the shift from having good products to providing value to your customers. They expect you to know what they need, when they need, where they need it, and how they expect it to be delivered. This is affecting everything. This is not just consumer businesses, this is B2B businesses down into the manufacturing level. Pinto made a poignant observation for digital native businesses We all know that business models have been threatened, but what we re seeing now is the second wave. The same set of expectations that some of these businesses established are starting to come back and disrupt their own business models. The challengers are now being challenged back. Pinto agreed that culture was a critical component of business transformation. The key question to make this happen: is your culture ready? Is your culture ready to actually face this space of challenge? Many of them already having been through horrendous transformation journeys that probably didn t work. So it s a really important question. The challengers are now being challenged back. 9

10 BREAKING DOWN SILOS TO ENABLE BUSINESS TRANSFORMATION After a fireside chat where Sage CEO Steve Hare shared the company s transformation story with the audience, Zuora CIO Alvina Antar took the stage with Sage s CIO to explore the dynamics of how a CFO and a CIO work together to envision the process framework, the business model, and then work to implement and align the organization. Sage, Britain s biggest software group providing accounting and payroll software for clients in more than 20 countries, is executing on an ambitious plan shift their conventional, product-centric business to a subscription business model. The discussion touched on the challenges of streamlining systems and operations for global businesses which involve multiple systems that do the same thing, myriad ways of doing things, and diverse strategies. Antar and Sage s CIO spoke about how the company s transition to a subscription-based business model was driving change. The way the product is put together is now as a service rather than a product. It s a whole ecosystem, salespeople are incentivized differently, finance does their accounting differently. It s a complete mindset change. Dennis Kozak, Chief Architect & VP of IT at CA Technologies shared the company s ongoing transformation journey. We started to observe that our IT systems that serve our Enterprise sale were mostly designed for perpetual license sales very manual, very laborious, relying heavily on the sales team building relationships. What we found was a very linear approach which matched our sales model. From lead, to quote, to order, billing, and so on. From our customer s perspective, they see received a linear, siloed experience. They were not dealing with one CA, they were dealing with multiple CAs. He went on to add that change requires not only IT to change, but also other teams to change. We really need a strong partnership, especially at the senior leadership level to make sure that the solution IT proposes really gets executed seamlessly. Whether it s program management or development, we work really closely with multiple teams and facilitate cross-functional collaboration. This is what we call the little secret sauce. $ 10

11 JUST THE BEGINNING The inaugural Subscription Institute Executive Summits brought together over 200 executives from more than 100 companies. While the industries, roles, and perspectives of the audience varied, all the executives at these summits agreed on one thing success in the subscription economy is imperative to their company s future viability. We at the Subscribed Institute are committed to helping executives make valuable connections to people and ideas that will help them lead their organizations to success in the subscription economy. 11

12 About Zuora Zuora provides the leading cloud-based subscription management platform that functions as a system of record for subscription businesses across all industries. Powering the Subscription Economy, the Zuora platform was architected specifically for dynamic, recurring subscription business models and acts as an intelligent subscription management hub that automates and orchestrates the entire subscription order-to-revenue process. Zuora serves more than 900 companies around the world, including Box, Komatsu, Rogers, Schneider Electric, Xplornet, and Zendesk. More at About the Subscribed Institute The Subscribed Institute is a dedicated think tank focused on the most critical business problems of the Subscription Economy. It serves as a unique source of ideas, data, and connections for business leaders and their organizations. More at 12