Welcome to The Margin, a newsletter designed to keep you on the leading edge of monetization.

In business, the difference between being ahead of the curve or slow to adapt is anything but marginal. The Margin aims to be the most useful, timely, and incisive ping that hits your inbox all week. It includes critical research and analyst insights to inform short and long-term decision-making.

 

Here’s what you need to know:

Research Spotlight | Dirty Data Kills!

Our latest research note, Dirty Data Kills!, spotlights the role bad data hygiene plays in thwarting software implementations, causing billing disputes, sullying financial reporting and forecasting, creating revenue leakage, and more.

  • This note identifies three primary factors that lead to data problems in billing and quote-to-cash, as well as nine key dimensions to help organizations understand the scope of their data hygiene problems.
  • Our advice is to treat data hygiene as a continuous focus area, not a one-time cleanup.

A Story You Can’t Afford To Miss | AI and the Future of CLM

Our conversation with Conga CPO Grant Peterson shed light on the ways Generative AI is poised to transform the Contract Lifecycle Management (CLM) market – as well as the ways it won’t.

You can watch the webinar on-demand here, or read on for a summary of our key takeaways.

On the Horizon | How Are C-suites Approaching the Gen AI Opportunity Today?

MGI Research is conducting a survey to understand what steps execs are already taking, if any, to address AI in their industries.

  • Is it a significant budget item for FY24?
  • Are customers already asking for it when signing new deals?
  • Where is the money going to come from?

We’re planning to publish our more in-depth analysis in an upcoming issue of The Margin, but you can read a sneak preview of our preliminary findings below.

 

Now let’s dive a bit deeper.

Research Spotlight

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Dirty Data Kills!

Bad data is responsible for over 70% of unsuccessful billing software implementations. Erroneous data also has profound implications for crucial processes like CPQ, CRM, revenue recognition, financial reporting, analysis, and forecasting. Our latest research note sheds light on the scope of the data hygiene problem.

MGI estimates that a 0.1% error rate caused by dirty data within financial and CRM systems translates to at least 1% revenue leakage. Without a clear focus on continuous data management, companies with dirty data have perennial problems with information integrity, billing disputes, and revenue leakage – among other issues.

We identify three factors that are primarily responsible for quote-to-cash and billing data problems:

1. Lack of proper scope

2. Rate of change

3. Lack of focus on data

Between the lines | The scope of the billing data challenge goes much deeper than just the volume of data or its cleanliness – that’s why deploying ETL (“Extract-Transform-Load”) or MDM (“Master Data Management”) tools aren’t sufficient answers to the data hygiene problem. Data cleanup should be viewed as a continuous process, not as a one-time phase to be completed.

Why you should care | The full report delves into nine key dimensions that are critical to understanding the scope of the billing data challenge and outlines a roadmap for businesses to navigate the complexities of data hygiene, supply and distribution, and rapidly growing data volumes.

Get the report here.

A Story You Can't Afford to Miss

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AI and the Future of CLM

If you missed our webinar on AI and the Future of CLM, you can watch it on our site here.

MGI analysts sat down with Grant Peterson, CPO of Conga and the former CTO of DocuSign, to discuss his thoughts on AI’s potential to transform the CLM landscape.

Here are a few quotes to summarize the key takeaways from our conversation with Grant:

  • “I don’t think we’re ready to let software practice law.” The correct role for Gen AI (within CLM) is to ideate and help provide perspective for licensed attorneys, not authoring contracts by itself.“
  • Every single vendor in every single industry you’re in, including CLM, is going to have the exact same set of generative capabilities, because none of us are building them. We’re buying them.” With that in mind, is Gen AI truly capable of providing differentiation, as the market has been led to believe?
  • “If the industry’s ready for a pretty significant hike in the floor of the price, this could be table stakes.” But Grant doesn’t think the industry is quite ready for that.
  • Gen AI and more traditional machine learning could go hand in hand. Running data through Gen AI first, then through ML models, yields better results than just using Gen AI, and quicker results than just using ML.
  • It’s likely that AI could allow implementation times to get cut in half within the next 12-36 months.
  • Finally, three key issues Grant has been thinking about are:
    • How do you create real value with Gen AI, rather than great marketing?
    • How can you do that in a way that protects customers’ confidentiality?
    • What does Gen AI make possible that is actually new?

Zoom out | If we had to summarize this entire 45-minute conversation into one piece of advice, it would be this: try everything, trust nothing.

For more insights from this illuminating conversation, watch the webinar on-demand now.

On the Horizon

How Are C-suites Approaching the Gen AI Opportunity Today?

MGI Research is currently conducting a survey to find out how CEOs and other C-suite execs are approaching the Gen AI opportunity. We will publish a more in-depth analysis of our findings in an upcoming issue of The Margin, but in the meantime, here’s a sneak peek at what we’ve learned:

  • So far, all respondents say they view AI as a major opportunity in their industry – but not an existential threat.
  • However, those same respondents are mixed on whether AI actually affects their TAM at present, as well as how they predict it will affect their business margins in the near future.
  • Some respondents report that AI is already a factor for customers in deals, but so far no one believes it is the primary driving factor.

Early insights | Our favorite quote from the survey responses so far:

“[AI] needs to be approached with pragmatism as the framework, along with a recognition that AI is always used in a ‘human centric’ context as an enabler rather than an elixir.”

It’s not too late | This is a reminder to any C-suite execs who have received our invitation to participate in the survey: don’t forget to fill it out this week!

  • It only takes 2 minutes to complete, and participants will receive a free copy of our findings.
  • If you are a C-level executive who wants to contribute your thoughts on the impact of AI in your industry, you can reach us here.

Tune In to MGI

An electric car charging

The Usage Pricing Revolution

MGI analysts Andrew Dailey and Igor Stenmark will join BluLogix CEO Youssef Yaghmour next week to discuss how organizations can achieve success with consumption pricing.

Join the webinar to learn about best practices for implementing a successful, data-dependent usage billing project that fuels continuous, real-time processing, including managing changes in customer accounts, usage patterns, contracts, or purchase history, and ensuring that they are accurately and promptly reflected in up-to-date statements, invoices, and order execution to drive business growth.

The BluLogix webinar will take place on Wednesday, November 15 at 11am PT / 2pm ET. Register now to reserve your spot!

So What Have I Missed?

The Topical 20 | Our most recent and relevant research that will help you keep your finger on the pulse of AMP disciplines.

1. Going Global With E-Commerce

2. Tech Trends: Mapping the Software Industry

3. Configure-Price-Quote (CPQ) TAM Forecast 2022–2026

4. The Future of CLM Is Data-1st

5. Declouding: Will Curiosity Inspire Action?

6. Dirty Data Kills!

7. Q2C Success: What Does It Take To Achieve Excellence?

8. 2024 Tech Budgets Preview — Webinar

9. Here Comes Usage! Adopting & Optimizing Consumption Business Models — Webinar

10. The Agile Billing Top 50 Webinar

11. The Agile Billing Top 50: A Buyer’s Guide

12. MGI Forecasts: Service-as-a-Business (SaaB) Software Global TAM Forecast 2022–2026

13. MGI Forecasts: Finance Automation for Services Organizations (FASO) Software Global TAM Forecast 2022–2026

14. Survival of the Fittest: Managing Extreme Economic Uncertainty

15. The Global Tech Market Is Bigger Than You Think

16. Is Software Still Eating the World?

17. Not a Typical Recession: Making Sense of the Global Economy

18. Use Case Note™: Opencell in Agile Billing

19. 360 Rating™: Icertis in CLM

20. The 13 Deadly Sins of Agile Monetization

and 32 other Use Case Notes!

 

The Evergreen Archives | Curated past research that is still pertinent today.

1. Quote-to-Cash Is Dead; Long Live Prospect-to-Disclosure

2. What Every CEO Needs to Know About Subscription Business

3. Evolution of MoR into Monetization as a Service

4. Mediation 2.0: Taking on the Data Challenge in Agile Billing

5. The Six Stages of CLM

6. Headless eCommerce Architecture: Is eCommerce Losing Its Head?

7. How to Scale Monetization Globally

8. Ten Digital Payment Trends Every CEO Must Understand

That’s all for this issue of The Margin. If you’ve made it this far, we’ll certainly see you next time.

Warm Wishes, MGI Research

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