What is Agile Billing?
Once thought of as a back-office function, Agile Billing is now considered a fundamental ingredient to the Agile Monetization Platform (AMP) and an essential component of modern business.
Billing is one of the most crucial elements of modern finance and business infrastructure. Billing systems calculate customer charges based on contracts, product catalogs, and price lists, as well as other attributes, and deliver invoices to customers on a regular basis. Inadequate billing software can lead to customer disputes, internal inefficiencies, inaccurate reporting and forecasting, and revenue leakage.
MGI Research defines Agile Billing as billing/invoicing solutions that are inherently agile in the way they are designed, implemented, and operated. Usually, that means the user experience (UX) is modern and intuitive and enables a business user to quickly and easily manage price, catalog, and offering elements, schedule changes, and test pricing models – in most cases without any IT involvement. Most, but not all, Agile Billing solutions are cloud-based and are applicable to a wide range of industries and use cases. While most Agile Billing solutions are cloud-based, not every cloud-based billing system is agile.
Agile Billing systems first emerged as businesses began to embrace e-commerce and digital channels, leading B2B buyers to expect a more comprehensive and customizable selection of offerings – such as SaaS billing, usage billing and consumption-based pricing models, multi-year ramp deals, and complex or custom offers – and the ability to introduce these capabilities at scale. As a result, modern finance departments are put under increasing pressure to provide greater support to the business while also responding to increased expectations of configurability, scalability, and ease of use. This comes at a time when many organizations still rely on legacy ERP solutions and billing tools that were designed in an era of batch processing and with expectations of speed and integration that do not match today’s competitive landscape.
Agile Billing tools play a crucial role in shaping brand experience by enabling organizations to deliver seamless and frictionless interactions with customers. By leveraging real-time data and flexible billing models, businesses can create personalized and transparent billing experiences that align with their brand values. This level of agility and customer-centricity fosters trust, enhances satisfaction, and ultimately strengthens brand loyalty. By incorporating Agile Billing into their operations, organizations can ensure that every touchpoint in the customer journey reflects their commitment to exceptional brand experiences.
Agile Billing enables scalability, security, and seamless integration, empowering businesses to meet the evolving demands of niche sectors while delivering superior service to their customers. Each industry has characteristically different interactions with their billing procedure and varying demand for flexibility of pricing models and billing procedures to meet the needs of the customer.
Key Issues (sidebar)
- What is Agile Billing? How does it compare to traditional billing?
- What are the critical and emerging requirements for an Agile Billing solution?
- What is usage billing?
- How do billing strategy and pricing strategy intersect in agile systems?
- What new business models are enabled by Agile Billing solutions?
- How do Agile Billing solutions compare in terms of cost, implementation times, and benefits delivered?
- Which Agile Billing vendors are likely to IPO and/or be M&A candidates?
- How big is the Agile Billing market, and how is it likely to evolve over the years to come?
- Who are the leading Agile Billing suppliers?
Agile vs. Traditional Billing
Agile Billing, with its emphasis on leveraging real-time data, automation, and flexible billing models, stands in stark contrast to traditional billing methods. Traditional billing systems often rely on batch processing and manual data entry, which can lead to delays and errors. In contrast, Agile Billing harnesses real-time data to enable businesses to quickly respond to market demands. By accessing up-to-the-minute insights into customer behavior, market trends, and financial performance, organizations with Agile Billing systems can make informed decisions and adapt their billing and pricing strategies accordingly. This agility allows for the timely introduction of new products and pricing strategies, ensuring that businesses stay competitive and seize growth opportunities as they arise.
Another critical distinction lies in the ability to proactively address customer needs. Traditional billing systems typically lack the flexibility and responsiveness required to cater to the diverse preferences and demands of modern B2B customers – who behave increasingly like B2C buyers. Agile Billing, on the other hand, empowers organizations to proactively engage with customers, promptly resolve billing disputes, and provide transparent and accurate real-time billing information. This customer-centric approach not only enhances customer satisfaction but also builds long-lasting relationships and fosters loyalty.
Operational efficiency is also an area where Agile Billing excels. Traditional billing processes often involve manual tasks, which are time-consuming and prone to errors. With Agile Billing’s automation capabilities, businesses can streamline their billing workflows, eliminate manual data entry, and reduce administrative overhead. This increased efficiency not only saves time and resources but also allows organizations to allocate their workforce to more value-added activities, ultimately driving growth and innovation.
Usage Billing
Usage pricing (sometimes called consumption-based pricing/billing) is built around the concept of metering consumption, where a unit of usage – e.g., storage, minutes, etc. – is used to calculate charges. The customer is typically charged a fee once usage is incurred. Usage billing can be either pre-paid or post-paid, with numerous variations. Consumption-based models have historically been the dominant billing method in telecommunications, cloud services, and utilities, but recently started to reach into media/entertainment, B2B and B2C services, and even industrials. Usage billing’s advantage is an ability to reach potential new markets that typically would find high fixed recurring charges a barrier to entry. With usage pricing, customers can try the service without a fixed, upfront commitment. For scalable usage billing, a capability called mediation is a key indicator of a tool’s maturity. Mediation provides a platform-like ability to process and reorganize massive amounts of data in real time.
Recently, usage-based pricing has been the focus of significant renewed attention. Usage-based approaches are seen as the key to powering the next cycle of growth in recurring billing.
Billing Strategy
As a core capability, monetization and specifically billing require significant complexity, careful self-assessment, forward-looking strategy, and focused execution and benchmarking. Developing a Pricing and Billing Strategy for Durable Competitive Advantage takes a strategic view of pricing and billing, outlining actionable steps as well as proactive, long-term opportunities companies can use to transform a necessary pain point into lasting competitive advantage.
Pricing Strategy
Many companies underutilize pricing as a tool without realizing that they are missing out on the capacity to create a major competitive differentiator for their business. Periods of rapid economic change present an opportunity for organizations to try new, creative approaches to core elements of their business, such as the pricing models they offer and the payment methods they accept. Beyond reacting to market conditions, the ability to deploy Pricing and Payment Flexibility: A Strategic Business Tool – and to do so with speed and agility – equips sellers with a distinct, strategic advantage: the power to adapt.
How Big is the Agile Billing Market?
The market for cloud-based Agile Billing software represents a rapidly expanding five-year (2022-2026) total addressable market (TAM) exceeding $50 billion. MGI Research projects that the Agile Billing market will grow from $8.63 billion in 2022 to $14.27 billion in 2026, representing a CAGR of 13.4%.
For more precise figures, download the Agile Billing Software Global TAM Forecast (2022-2026). This report addresses worldwide annual estimates of potential spending and growth rates, detailed geographical breakdowns, economic sectors, analysis of market size based on company size, the impact of Internet of Things (IoT), Digital Transformation, and company growth and technology spend profiles, among others.
Leading Suppliers
There is renewed demand for modern billing and modernization solutions that can handle today’s requirements for business agility, ease of use, and rapid implementation times. New vendors have emerged to solve the agile billing needs while legacy billing systems are looking to bridge the gaps between their traditional functionality and the new market requirements.
The agile billing landscape is continuously evolving and thus a challenge to navigate when critical decisions that impact the future performance of a business need to be made.
- Amberflo
- Amdocs
- Aptitude Software
- Aria
- Bill.com
- BillingPlatform
- Billwerk+
- BluLogix
- Cerillion
- Chargebee
- CSG International
- Evergent
- FastSpring
- Fusebill
- Good Sign
- Gotransverse
- IDI Billing Solutions
- jBilling
- Juston
- LogiSense Billing
- M3ter
- Matrixx Software
- Maxio
- Metronome
- Monetize360
- MonetizeNow
- Nitrobox
- Octane
- OneBill
- Opencell
- Oracle
- Oracle Netsuite
- Orb
- Ordway
- Piano.io
- Recurly
- Recvue
- Rev.io
- Salesforce
- SAP
- Stripe
- Subskribe
- Vindicia
- Wingback
- Zone & Co.
- Zuora
