Maintain multiple revenue models in the system to accommodate a diverse business model

Description

Maintaining multiple revenue models in a Corporate Performance Management (CPM) software allows the organization to plan, track, and manage various revenue streams separately and distinctly within the same system. This feature gives a more accurate representation of financial performance and aids in budgeting, forecasting, and decision-making processes.

Example Use Case

Scenario: An international corporation has a diverse business model, operating in various fields like manufacturing, services, and retail. Each sector generates revenue differently, and combining them into a single model does not provide an accurate reflection of each individual sector's performance.

Solution: By utilizing a CPM system that accommodates multiple revenue models, the company can accurately track and manage each business area independently. Manufacturing revenue could be monitored based on production and sales of goods, service revenue could be tracked based on service contracts and billable hours, and retail revenue could be managed based on sales transactions. Each model provides a clearer financial picture for accurate forecasting and budget planning.

Considerations

This requirement is important for any business that captures revenue in multupke, distinct ways. Take for example a health and beauty company that:

• Has a subscription model where they send a certain amount of product per month to customers
• Sells individual products via channel on Amazon.com and Walmart.com
• Sells kits on their own website

Each of those revenue models have different cost structures, reporting requirements, and planning requirements. This means that they each require their own dimensions, and those dimensions will be mapped to their own set of source data. Then that revenue has to be blended into a collection of financial statements. It can become very complex very fast if the CPM system is unable to handle sufficient dimensions and source system connections.

Most CPM vendor's demonstration systems have one revenue model for you to review, and will login to another instance of their software to show a second revenue model. This obfuscates the issue of keeping them both on one instance of their software. Maybe they can't, or maybe it becomes unwieldy if they do. If this is important to you, dig deep.

Questions to Ask a Vendor

• Multi-model Capabilities: How does your software handle multiple revenue models? Can we add or remove models as our business evolves?
• Integration Features: How does your system integrate with various operating platforms to ensure accurate data collection for each revenue model?
• Show Us: Can you show us an example where you have two revenue models in the same instance of your software, and how they are blended together?