Tectonic shifts in the landscape of B2B sales have been thrown into stark relief in the wake of this year's pandemic. The shift to e-commerce, the rise of subscriptions, the need for information to follow customers as they switch channels — all of these trends were already in place, but suddenly they've become top priority. Enter Salesforce Revenue Cloud, a new package unveiled today that brings together B2B commerce, quote-to-cash and partner relationship management to give businesses a single view of revenue and customer transactions.
There's very little that's new about Revenue Cloud apart from its bundling of existing components under a new name. A new connector from the existing configure-price-quote (CPQ) engine into the B2B commerce platform allows for self-service online configuration of complex orders, with the ability to then contact a sales rep to get help or a discount on that online order. A new 'multi-cloud' option makes it easier to consolidate billing of disparate products and services, while new technology from the acquisition of Vlocity earlier this year adds certain industry-specific workflows.
On the whole though, today's announcement is really just bringing together existing components to "tell a seamless story" says Pascal Yammine, SVP and GM of CPQ and Billing at Salesforce, who briefed diginomica yesterday about the news. Although Revenue Cloud has been in the works for some years, beginning with the acquisitions of Steelbrick in 2015 and CloudCraze two years later, it launches at a time when demand is surging for the kind of integration it embodies, as Yammine explains:
This is no longer us trying to convince customers that the changes are happening. This is now about them realizing it's happening at such a fast pace, because of the pandemic, that they're coming to us and saying, 'What do we do? How do we get through this?'
Connecting processes and data end-to-end
The pandemic has broken down artificial internal barriers between functions, with field sales, internal sales and their counterparts at partners all reduced to working from home, e-commerce suddenly becoming the primary channel for sales rather than a sideline, and every bit of paperwork needed to sign a deal going online. All the disconnects that used to be papered over because people could just walk down the hall and sort it are suddenly exposed, and businesses realize they've never properly architected the whole end-to-end process. Yammine comments:
Everybody's systems and processes are just siloed. They never really had to put them together, it's never been important enough to put them together. They also may have acquired companies and as a result have different systems ...
It's gotten to the point where, for our customers to survive and to thrive and to start getting back to revenue growth, they need to solve this problem. Their sales channel is not co-ordinated with their partner channel, which is not co-ordinated with their digital experience storefront. Depending on what business unit they're in or what partner channel, they maybe use different catalogs and different order management systems and billing systems and financial systems. It's the convoluted kind of mess, or we call it a spider web, that they're seeing is the reality.
Salesforce cites its customer Podium as a use case to demonstrate the flexibility that comes from bringing different processes and datasets together into a single system. Podium is a Utah-based tech company that provides messaging tools for local businesses. Having implemented CPQ and billing — two of the core components of Revenue Cloud — the company was able to quickly introduce a new service for restaurants earlier this year, at a crucial time for those businesses. It took Podium just six days to introduce a new SKU that allowed restaurants to use SMS text messages to share their menus, take orders and payments, and notify delivery timelines. Yammine comments:
Not only did Podium have amazing success and growth during the pandemic, but also they've enabled their customers to survive, which is really critical.
Bringing finance and RevOps into Customer 360
Another important aspect of Revenue Cloud is that it makes it easier to monitor what's happening. At a time when cash is king, it's crucial to stay on top of revenue. Tracking it across a single system rather than leaving it sitting in separate silos and spreadsheets also helps finance teams ensure that revenue is correctly booked. Yammine explains:
We can give the governance, the controls, the reporting and analytics that the revenue operations functions need to drive automation, to drive intelligence, and to drive the controls that they need to make sure that not only are they growing the business, but they're growing it in a fiscally responsible way.
To this end, there are MuleSoft integrations into ERP and accounting systems. But one interesting aspect of Revenue Cloud is that it brings finance into the customer lifecyle in a way that we haven't seen in previous offerings from Salesforce. As Yammine says:
The revenue lifecycle needs to be part of and aligned to the customer lifecycle. Fundamentally, finance and revenue operations, as functions, need to be part of the customer 360.
To some extent this is Salesforce adapting to the emergence of revenue operations, or RevOps, a new function in fast-growing digital businesses that brings together all the customer-facing processes that generate and collect revenue, across sales, marketing, customer services, order processing and billing. The rise of RevOps is a response to the need for more proactive management of multiple revenue events during the lifecycle of today's digitally connected customers. Yammine says:
The buyer's journey, in today's world, it doesn't end with them making a purchase. They now have to consume those products or services they have [paid] for. They have to go through and make changes to what they ordered. They have to renew what they ordered, especially in a subscription model or a consumption-based model. And hopefully, because they're getting a lot of value, they expand what they're using, they buy more of it.
The entire customer journey really integrates the revenue lifecycle as well, because the components of getting to an agreement, of fulfilling the order as part of the consumption, of taking payment and invoicing them, those are all of the key elements to them in the lifecycle.
But from another perspective, this move into revenue operations also brings Salesforce more directly into competition with financials ISV partners that have added their own billing and revenue management tools. Yammine however argues that the market opportunity is big enough for everyone:
A key differentiator for us is that we can bring the entire lifecycle of revenue along the way with the customer lifecycle. There's going to be opportunities for us to bring in some point solution vendors to help augment that as well. But I think there's a lot of opportunities for both Salesforce and our partners to really grow in this area.
While there's little new functionality in this announcement, it is a big move in how Salesforce positions its existing offerings. A few years ago, there was some talk of the emergence of the 'middle office' as a new force in enterprise applications, where the term encompassed all of the processes between CRM and ERP that were needed to fulfil an order. At the time, Salesforce was not seen as a player in that space but it has since expanded its functional footprint to fully occupy it. Today you might even argue that it has gone even further, seizing ground in billing and subscription management that many financials vendors see as rightfully theirs. Several Salesforce partners will be reviewing their go-to-market plans as a result of today's announcement.
All the same, it was probably inevitable Salesforce would take this step sooner or later. It simply reflects longstanding trends that have been accelerated by the sudden adoption of digital processes in the absence of in-person contact. We've been writing about the need to break down functional silos and build digital connections for a decade now in arguing for frictionless enterprise and the continuous engagement of the XaaS model. The technology is now ready to enable these goals and it's up to businesses to take the next step.