Revenue Management Challenges Cost High Tech Companies Billions, According to New Model N Research

Model N, Inc. (NYSE: MODN), the leader in cloud revenue management solutions, today announced details of a new executive report, the “2020 State of Revenue,” created to examine revenue management trends in the high tech industry. Fielded in Q1 of 2020 by Dimensional Research and Model N to more than 300 senior executives in the U.S., the survey investigates the ways that companies are dealing with revenue management and how they can do better and explores the role that technology will have in revenue management moving forward.

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Model N releases its 2020 State of Revenue report for Life Sciences and High Tech. (Graphic: Business Wire)

Overall, findings from the survey indicate that C-suite executives struggle to achieve effective revenue management, and 89% say they are losing billions of dollars through revenue leakage. Some 75% know they “leave money on the table” and must do better. Even worse, those surveyed state that they don’t know how to fix revenue management issues, underscoring the need for new technologies and solutions to help capture and manage revenue.

Revenue and Price Management Challenges

Some 82% say that revenue management has become increasingly difficult, and they estimate the impact of losses due to revenue leakage to be in the billions of dollars. Amid this increasingly demanding environment, executives report that optimizing and managing revenue is a challenge. Specifically:

• 98% of executives say they face challenges with revenue management
• 73% agree that pricing decisions leave money on the table
• 90% of executives state they are embarrassed by pricing inconsistencies that are visible to customers

Price management is another critical area where companies face revenue management challenges, as the vast majority (96%) of companies in Model N’s study report that they face price management issues. In addition, the number of individual revenue execution moments has increased by more than 10 times in just five years, according to 76% of survey respondents. For some 20% of companies, the increase in revenue execution moments has been more than 50 times as many, a phenomenal rate of change in only a few years.