Prescription for a Slow Economy

Innovative software companies are turning to revenue management to improve their bottom line.

By Kamal Ahluwalia, Model N

As the earnings season rolls by, a slew of companies across all industries are lowering their guidance for the remainder of the year. Some are already seeing their business slowing down and others are anticipating fewer and more protracted sales cycles.

During economic slowdowns, a herd mentality often emerges among CFOs and CEOs as they turn to cost reduction to boost profitability amidst declining top-line growth. But, if you have been in business for more than a few years, you have likely maximized your cost reduction and outsourcing opportunities during the last downturn. What remains then to keep shareholders at bay?

The answer is right in front of you: software companies don't necessarily need new business to improve your bottom line; better managing your current book of business can yield similar results. And the best strategy for achieving this is to take a closer look at the core processes that control your “gross to net” revenue life cycle. Automating and integrating these often disjointed processes can help you realize margins gains of 2% to 10% depending on the complexity of your business environment. These are returns that build careers and reputations.

Customer Study Shows a Shift in Software Buying

A new study from McKinsey & Co. and Sand Hill Group finds software will account for an increasing portion of enterprise IT budgets over the next few years. Read this new report of enterprise software buying plans and find out how trends such as SaaS, SOA and open source are impacting IT strategies. Download your complimentary copy of “Enterprise Software Customer Survey 2008” now.

Is SOA Dead?

The media has begun to talk about the death of SOA. As Judith Hurwitz of Hurwitz & Associates explains in this post to the SandHill.com Blog on SOA, reports of SOA’s death have been greatly exaggerated.

Soundbites from Software 2008

Last week, hundreds of software industry leaders gathered in Las Vegas for the Software 2008 conference. SandHill.com editor Maryann Jones Thompson shares a snapshot of the insight shared during the keynotes and breakout sessions in this post to the blog on Software 2008.

Publish Your Perspective!

SandHill.com wants your opinions. Send your thoughts on the enterprise software industry to SandHill.com editor, Maryann Jones Thompson (maryann@sandhill.com) and have your opinions published on our site.

DON'T MISS: Preparing for a Slump in Earnings

Historic trends suggest earnings may fall more than most executives expect. Companies should prepare for steeper declines and take steps to strengthen their positions when times improve. Read how in this article from The McKinsey Quarterly.

News Update: Shaping the Future

Microsoft plays nice with Extensions and hardball with Yahoo, Memristor can think, the mainframe is back and Web 2.0 facilitates new danger. Read these stories and more software news of the week in the latest SandHill.com Software News Summary.

Poll: Revenue Management?

What kind of profit lift can software companies expect from improved revenue management strategies?
Take our Pulse Poll >>

Last week, readers speculated on whether the expanded landscape of enterprise software options will force buyers to return to basic buying expectations like reliability and security over technology bells and whistles.
Give us your opinion and see the results >>

More at SandHill.com:

New survey says open source is gaining traction in the U.S. government.
Read the most important enterprise software industry news of the week >>

On-demand sales compensation maker Xactly Corp. received $30 million.
Monitor the latest software venture capital deals >>

Microsoft dropped its bid for Yahoo but bought Farecast.
Size up last week's software M&A deals >>

EveryZing named Scott Greenberg as Vice President of Business Development.
See who's made it to the top in our list of recent software executive appointments.

Send us your feedback on this newsletter and the SandHill.com site.

Parting Thought

“There is always a better strategy than the one you have; you just haven't thought of yet”
–Sir Brian Pitman

Courtesy of Malcolm Kusher, The Kushner Group

THIS WEEK'S SPONSOR

Primavera Systems, Inc. is the world’s leading project and portfolio management software company. We provide the software foundation that enables all types of businesses to achieve excellence in managing their portfolios, programs, projects and resources. It is estimated that projects totaling more than $5 trillion in value have been managed with Primavera products.
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SandHill.com is published by Sand Hill Group, which provides investment and management advice to emerging leaders in the $600 billion enterprise software, services and solutions market. Sand Hill Group produces the Software and the Enterprise series of conferences for industry executives, and authors research reports on cutting-edge technology topics.