VHT accelerates revenue recognition, improves customer experience and third-party support by shifting away from FTP software delivery and to Electronic Software Delivery.
Virtual Hold Technology (VHT) is a leading producer of contact center software solutions that empowers their customers to provide a better experience for callers and contact centers which results in reduced customer frustration and an improved contact center experience.
VHT had delivered their software solutions to customers via File Transfer Protocol (FTP) which was less than optimal (for reasons covered below) and delayed revenue recognition. They thought there had to be a better way, including their CEO, Wes Hayden. He challenged Nick Kennedy, Vice President of Customer Care, and his team to find a better way to deliver their software in an innovative way that would allow them to more easily capture customer download information and deliver software based on entitlements while accelerating revenue recognition.
Challenges with FTP Software Delivery
Prior to the Flexera solution, VHT delivered software to their customers via File Transfer Protocol (FTP). As depicted in Figure 1, customers would build FTP software delivery sites for their customers, upload software to the FTP site, notify customers that the software was available and the customer would then download the software:
While the process was functional it was less than ideal as the process was largely manual and lacked transparency into which customers downloaded which products when. This lack of transparency caused customer support challenges and delayed revenue recognition.
Customers also had connectivity challenges with the FTP approach to software delivery. End-user IT security policies would often deny access to FTP sites. The FTP sites also had large bandwidth requirements which posed challenges for many customers, especially those in remote locations where internet connectivity bandwidth was a challenge.
Another challenge with the FTP approach was discovered when a customer approached the VHT team wanting to purchase the software but didn’t want to accept delivery for six months after the purchase. Delaying delivery of the software posed a technical challenge with FTP as well as revenue recognition challenges.
Benefits of Electronic Software Delivery
Accelerated Revenue Recognition
The implementation of Flexera allowed VHT to recognize revenue earlier than their previous FTP-based process. Since they previously lacked visibility into when software was actually delivered their prior model of recognizing revenue was only upon project completion. Now that they have visibility into when software was delivered and the EULA (End User License Agreement) was accepted they now have confidence in the accuracy of their software delivery data which means that they can recognize revenue earlier than before. This meant that that the licensing portion of their sales could be booked into revenue faster and more accurately which has improved their sales forecasting, invoicing and more. As Nick Kennedy stated “We flipped our whole model to support it [revenue recognition] in this direction.”
Improved Customer Experience
Having implemented FlexNet Electronic Software Delivery, VHT customers can now more easily access their software and associated software updates via the FlexNet Operations portal. This means that they don’t have to access a separate site (FTP), download software and upload to their respective machine(s) as is seen in Figure 2. Additionally, VHT now has visibility into which customers took which software updates which helps ensure that critical updates have been applied which also bolsters the security of their products.
In addition to an improved customer experience, VHT customers now have further flexibility in their software budgeting process as is seen in a typical year-end purchasing scenario. At year-end there's typically a rush for customers to involve the right people and decide that they’re going to spend some of their remaining software budget with VHT, but they need to prove that they’ve taken delivery by the end of the fiscal year in order to have the budget allocated appropriately. Now that VHT’s customers can simply login into their portal, check the box and download the license their budgeting process is more accurate than ever before.
Improved Third-Party Support
Like many software producers VHT leverages third-parties like channel partners. As Nick explained there are certain situations where they don’t have direct access to their clients which can make software delivery a challenge. One example is in the case of a channel partner based in other countries where connectivity and time zone differences are a challenge.
With electronic software delivery the channel partners can now entitle (give access to the software to) VHT customers directly without manual delivery involvement by VHT.
Further, as Nick states “We might not have a direct line of discussion [with the customer] when we release something new. They'll log into the portal and say, "Okay, there's a new version available. There's a patch available. Let’s download these notes and see what's going on in there.” This affords new revenue opportunities in some cases as they can upsell additional services to help their customers get upgraded.
Reporting for Improved Decision Making
In addition to accelerating revenue recognition and improving the customer experience, VHS was able to gain further insights with reporting from their Flexera solution. In particular, they were able to gain visibility into which customers downloaded software and accepted the EULA via a User Acceptance Report. VHT has also gained visibility into which versions have been downloaded against their product catalog with a Product Download Summary report.
Ultimately these reports help VHT make better product roadmap decisions. An example is being able to understand clients’ integration points in the event they [VHT] need to make a decision about where to release a hot fix.
The benefits realized for both VHT, their customers and channel partners have been many. Contact Flexera to learn more about how our Software Monetization solutions can help your organization.
- 2 Reasons You Should Consider Electronic Software Delivery [Blog]
- Office of Finance – Revenue Recognition [Data Sheet]
- Reduce Distribution and Support Costs with Electronic Software Delivery with Flexera [Demo]