Guest
Kayvan Dastgheib-Beheshti
Global Head of Revenue Operations & Enablement at Tegus
Episode description
In this episode of the Data for Subscriptions podcast, Kayvan Dastgheib-Beheshti, Head of Revenue Operations at Tegus, joins us to share insights from his experience leading CPQ implementations. He discusses Tegus’ approach to addressing inefficiencies in the quote-to-cash process, tackling usage data challenges, and implementing a homegrown CPQ system that reduced billing delays and streamlined contract management. With real-world examples and actionable strategies, Kayvan breaks down how Tegus optimized operations to handle complex pricing models, improve billing accuracy, and adapt to evolving business needs.
Highlights
Kayvan explains how Tegus implemented a homegrown CPQ system to address inefficiencies in their quote-to-cash process. By reducing the average time to process renewals from two weeks to the same day, Tegus eliminated billing delays that previously affected their financial reporting. The implementation also allowed Tegus to manage complex pricing structures and customer agreements more efficiently, avoiding the need to hire additional staff. Kayvan highlights the importance of building a flexible system that can adapt to changes in pricing, packaging, and product offerings.
Managing hybrid pricing models requires seamless integration between Tegus’ CRM, financial systems, and product environment. Kayvan shares how their systems now connect Salesforce, NetSuite, and Tableau to automate key data flows, reducing manual input and enabling accurate customer insights. This integration helps Tegus identify usage trends, monitor customer engagement, and streamline entitlement management, allowing their teams to focus on growth rather than operational bottlenecks.
Tegus measures the success of their CPQ implementation with key metrics like time-to-invoice and sales cycle length. By reducing invoice delays and avoiding extended sales processes, the new system has improved operational efficiency and customer satisfaction. Kayvan also underscores how these metrics ensure alignment between bookings and billing, providing a clear view of business performance and enabling scalable operations as Tegus continues to grow.
Transcript
CPQ Implementation Tips for Scalable Quote-to-Cash Success
Behdad
Hello, and welcome to the Data for Subscriptions podcast, where we learn and explore how to run better subscription businesses. I’m your host, Behdad Banian, and today I have the immense pleasure of welcoming Kayvan Dastgheib-Beheshti from Tegus with us. He’s Head of Revenue Operations. Kayvan, welcome to the show.
Kayvan
Thank you very much for having me. I’m very happy to be here.
Behdad
So we’re going to talk all about CPQ implementation and tap into your experience as well as learn more about Tagus and your pricing structure. And naturally, as always, get into the lovely topic of usage data and usage data management. But before we get to all of those details, why don’t we start with an introduction about yourself? And what I’m curious to understand is what led you to land in the space of revenue operations and become a CPQ expert at Tagus?
Kayvan
Comically enough, I think like most young Iranians, I wanted to be a doctor at some point in time.
In fact, I did a double major in biology and chemistry. So I have a strong concept of math and manipulation of data and drawing insights from it. And eventually I found myself working in customer operations and eventually leading a help desk through transformations of the business. I eventually was take I took over all of customer success and one of the things that really stood out to me reflecting on that time was that I very much enjoyed understanding the customer journey itself, the data, the customer handoffs, the processes, the technology used to ensure a, you know, fantastic customer experience, less so than being the customer relationship manager itself. And so when that organization was eventually acquired and there was an offer for me to relocate, I decided I would actually look for a role elsewhere and a company at the time now Zoom Info, DiscoverOrg then, was hiring for ACSM. So I applied for a CSM role and they looked at my credentials and what I talked about in my interview. And they’re like, we don’t think you’d be a great CSM, but we are hiring revenue operations if you’d want to talk to our leader in that role. And I said, cool, I’ve never heard of revenue operations, but this sounds exciting. And so that was my first foray into Rev OPS was truly getting to experience that there is a, there’s an entire job function that’s entire responsibilities of things that I found most engaging in my previous roles. So and that was the start of my career, customer success, sales, development, sales, marketing, operations, all of that was started from there.
Behdad
And what led you to Tegus? And we’re going to speak about Tegas in just a minute, but I’m curious about your own journey there.
Kayvan
So Tegus, I was referred to Tegus after I left my last role and said this was an organization that had a fantastic product, a fantastic, you know, position in the market, but a team that needed dedicated revenue operations. They actually had gone so long without a centralized Rev OPS function that there was a lot of the things that you’d have imagined be built earlier on process technology implementation, things like CPQ for contract management and, and scaling A-Team to be able to meet the enablement needs of a growing sales and customer success organization. And I, I got to meet the team, got to meet the sales and CS leaders, connect with strategic finance. And I was astounded with the work ethic, the, the level of due diligence and the ability for so many people to wear multiple hats that I felt this is an organization that culturally resonated deeply with me.
And the product market fit meant that all we had to do was lift the essentially lift the, the gates for our sales and customer success teams to really go out into the market without the, the, the cumbersome burden of their own tools and processes fighting against them. And right, right. So it’s, it’s been a fantastic, fantastic journey since I’ve been here. And I’m very grateful that I got to work with such a stellar group of people.
Behdad
I mean Tegus is a fascinating company just looking at the fact that it was founded in 2017 and already 19 launching the platform you joined in 2023, right? Yeah, the same year in 2023, you guys were acquired by Alphasense for for about 950 and many USD. And of course, as we’re going to learn from you now about what the what you’re offering is, it’s really exciting, not just a journey that led you here, which in itself is super exciting. It’s what lies ahead. But walk us through, please, what is the company offering and how is it priced and packaged?
Kayvan
So Tegus is a well leading expert transcript library, but it’s primarily used as a platform that provides strategic accessible insights to investors to inform their investment strategy through access to expert knowledge, financial compensation, essentially financial comps, custom drivable models and obviously a best-in-class expert transcript call services function. This allows us to be a leader in establishing quality, compliant and highly valuable relevant insights to investors on everything from what technologies to performance across certain markets and where to spend their, you know, their valued capital to, to drive growth for their stakeholders. And as, as of recently, as mentioned earlier this year, we were acquired by Alphasense, the leading market intelligence research provider. So now we’re essentially married into this fantastic new composition of products where you get access to best in class research and a best-in-class ETL to solve all of your research needs.
Behdad
Tell us a little bit more about the price packaging. How does the structure look like? If one would subscribe to your platform, how do I pay for it?
Kayvan
So Tegus has primarily two seat based, yeah, subscription, seat based annual subscription where then the call services being a separate, you know, function pay as you go either or upfront purchase. But the seat based we also offer depending on the teams in the organization’s size, team wide and firm wide licensing, which is you think about it just a, another version of a kind of a volumetric scale to incentivize more users at an organization to adopt the platform and use it as part of their daily research workflow.
Behdad
So let’s focus now on the CPQ implementation that you led at Tegas as a starting point. What was the big driver? You gave us a little bit of a hint of kind of like removing obstacles so you can really unlock the sales and customer success team. But what specifically LED you to drive a CPQ implementation?
Kayvan
So any CPQ implementation is not a light decision. It is something that any leader worth their salt will truly dig in to understand what is at play within the organization. What are they, what is the relationship between our go to market tech stack and the financial systems, the product systems and what is the exchange of data? And importantly, how is this being used to unlock insights, to drive pipeline generation and eventually, obviously, net retention and all of those various things that are important for a healthy growing business. So within a few months, I was able to assess and understand the intricacies of how we provisioned a contract, how did we manage entitlements? How did we get invoices to our customers? And one of the things that really stood out to me is as the organization was growing, and rapidly at that, the effort to get a contract out and eventually send an invoice after processing the contract was exponentially growing, which is not remotely good. We were getting to a point where the average time to process a renewal was over a week, sometimes reaching 2 weeks depending on the complexity of the arrangement. Every new business contract required hours of work to get it out and that meant that we were unable to get invoices out to our customers and usually within the same month that we close the deal, which was leading to this really unfortunate lag in billings that was, you know, being reflected poorly in in all of our financial reporting. We didn’t have a very complicated product suite, but we did have enough permutations based on the personas and the sectors that we’re working with that we needed to create a way for us to quickly get quotes out with consistency to ensure that we’re driving towards a higher average sales price, that we’re consistent with our discounting. And importantly that we were able to understand what our customers were paying for both on their behalf and ours.
But then ensure that come next renewal, we were being very transparent about what actor was up renewal.
It was even increasingly difficult to understand what users at an account, especially for our enterprise and strategic customers where there’s multiple concurrent agreements understanding which users were tied to which renewal.And to me that was in a, that wasn’t just a Canary in the coal mine situation.
That was we have an actual fire that we need to address to ensure that as we make any changes to our pricing and packaging, we’re able to assess effectively what are going to be those changes, those impacts downstream and then prepare for them.As otherwise, we would have just gotten to a point where in order to meet the needs of the business, I would have had to hire 5 full time employees to just do contract management, which at our scale of company is not only financially irresponsible, but it means we weren’t using the tools available to us in a cost efficient way to drive the kind of productivity that is necessary for profitable and efficient growth.
Behdad
Yeah. When did you start the CPQ implementation?
Kayvan
We started it in November of 23 and launched it at the start of February 24, which is an aggressive timeline.
Behdad
I was going to say that something with the CPQ that is an aggressive timeline.
Kayvan
Yeah, yeah, yeah, that is.
Behdad
So from an implementation standpoint, Kayvan, what would you say are your learnings if you go through like the pre, during and post, what are your key takeaways?
Kayvan
There’s a few things that really stand out that I would, you know, a caution anyone who’s going to go down the path of a CPQ to assess. So pre work is largely going to be understanding what do we want our end state to be painting a clear vision. Because as you implement ACPQ, there is going to be like any sort of product development, there’s going to be scope creep that starts to become unmanageable. So having a clear vision for what you want the output to be is paramount.
That’s your North star. Because as you journey through the implementation, there is going to be a lot of interactions with stakeholders across finance, across product, across your sales and CS leadership teams. And there’s going to be this constant question of is this something we need to do now or is this something we need to do later? You know, it’s like AV2 or an iteration after the fact.
Is it like a show stop or if we don’t have it live? And importantly, is there a manual process that’s being done right now that is considered critical to get the job done that we neither need to have an automation take that over in the V1 or is do we need to build in the capability for this manual process to still continue when we when we launch?
So we have to have some flexibility where we’re it’s a marriage of automation and manual work to get here.
And that would be like really the first answer as you start to go through this exercise, understand what do you want to accomplish?
I’d say similarly in the pre work is understand what are your actual products that you’re planning on selling. It sounds comical to say it that way, but many organizations I would say I talk to more organizations that have this problem. The ones that don’t, all organizations are changing the way they go to market either through pricing and packaging, through new market entry, regional expansion.
All of these things are just the nature of a business that’s growing.
So if we get to a point where we look back at where we were a year ago, we’ve made so many changes. ingSo think about build your CPQ for the world that’s it’s going to be living in, not for the world that you have. So that is about, OK, what are we launching next year? Do we need to account for some legacy skews? Are we retiring legacy skews so we’re unable to sell those anymore?
Well, you don’t need to go build all of the legacy SKUs in your CPQ if you’re going to be retiring many of them. So there’s a lot of consideration like what are you actively going to be selling and renewing and ensuring that that has a place in your new world versus trying to take into consideration all of the various permutations of pricing you have going back to the founding of your company.
Behdad
Yeah, I think the second point here was just if I double click on it, you know, as well as both the 1st and the second point, they might sound pretty simple and straightforward, but they’re not. And I think especially the second point, and we talk often about flexibility and agility. And while they may sound like what I call buzzword bingo, there’s a lot of truth to them. Because what I hear you talk about the fact that you need to be specific about what you need to accomplish and build for let’s say the six months project that you guys had also itemize what needs to be done in a second revision to be able to move fast. But the most important you made is you need to build something that can be adaptable for the business to come.
And I think this is probably the biggest mistake that I see in most businesses that we interact with are making is that they build or they just dig themselves into too rigid of an environmental system, which means it’s just costly and inefficient every time they make need to make any adjustments. I’ll discuss this point. You know, when you were scoping it to that extent, like how do we it?
Kayvan
It was a very ever-present conversation as I’ve implemented CPQs several times and managed existing CPQs that were in place throughout my career. It was something that was adamant during the development that we needed to have a flexible configuration, which is one of the many reasons that we built our own home grown CPQ. There are some very fantastic products on the market that in the terms of the build versus buy conversation, but the scale of development and the the required timeline to work with an external vendor terms evaluation. Ensuring the right product would have put us on a far more long-term timeline than one that we needed to coincide with the launch of our new pricing and packaging in February. So we opted to build our own home grown CPQ.
Importantly now err on the side of extremely technical for a second. We believe, at least my philosophical perspective on Salesforce is that you should use declarative process as much as possible rather than Apex development because that will give you the flexibility. If you use Salesforce’s native configuration and tooling, you will have a far more adaptable and flexible new configuration to meet the needs of the business. Give you an excellent example. When we launched it, we had very rigid discounting rules even for customers. And that was an issue because our customer facing teams come renewal and expansion said, look, I have a lot of legacy discounting that was previously approved by the business that I shouldn’t need to go through a second round of approvals just for like A1 seat upgrade.
And we agreed with that. That shouldn’t be something that we should go back on existing relationships and, and ruin that and slow down which would otherwise be a very fast transactional upsell. So we quickly within a week we’re able to make it was actually within a couple of days make all of the changes we needed to give our customer from customer facing reps the rapid ability to sell and without going through the cumbersome discounting, you know approval frameworks that we have built in Salesforce. If we had done things through code, this would have likely been a month of testing, redeploying, pushing to production and at that point going up. But we could have essentially significantly hamstrung 1/4 at that point. So there is an element of we knew we weren’t going to get it right perfectly on day one. So we needed to make sure that we had release valves in the system, like emergency release valves to go and change as we’ve made many changes in the past, you know, nine months since we’ve launched it, which would have been impossible if we had spent, if we built an extremely rigid complex structure without adaptability baked into it from day one.
Behdad
Knowing what you know now came on, if you go back in time, what would you do differently?
Kayvan
There’s actually two things that really stand out to me that I would do differently. The 1st is we launched our CPQ in February alongside our pricing and packaging, which was at a, you know, period of time. And we also launched it with a full reorganization of our go to market team. We focus on essentially establishing a dedicated hunter team and a dedicated farmer team. So it was a lot of go to market change in play, which meant that it’s a lot for go to market team to ingest and be able to process and be able to work through successfully. So, but the first thing is CPQS and new quote processes are always going to be easier for implementing on new customers because there isn’t a legacy of products for them, right? They’re a blank slate coming into the business.So I would have delayed. Looking back would have delayed our CPQ deployment into two phases. First have been a deployment for our new business teams, our hunter teams so that they’re able to now generate new customers for us that are on the new framework that we don’t have to worry about.
There isn’t the legacy of what were they up for renewal? There isn’t the concerns with how quickly can we get out an upsell contract for transactional versus like a product migration. It was a far, it’s a far simpler scale. So we’ve implemented that first and use that to test if there was any operational configurations that needed to be dealt with before at a later point, maybe a month or two later launching it for our customer facing teams.
So that’s the first like recommendation I’d make because. Don’t deploy a CPQ all at once in terms of its configurations and its demands and its restrictions for your entire team.
Pace it into the hunter team first and then your customer facing team because at the end of the day, any delays on your customer team is going to be far more catastrophic across your organization if you don’t account for those effectively. So that’s the first thing I’d say.
The second is, and this kind of goes back to the pre work a bit, understand how your existing structure plays a role in reporting, pipeline forecasting and those other elements of the business. It can be a, we had done essentially, I say a cursory level of work on it, but didn’t fully understand how because of the sake of the timeline. We figured these things will be able to be rectified quickly afterwards. But we were wrong.
And that’s an important learning moment is that when we launched our CPQA, lot of the pipeline forecasting that reps were using to essentially insert the amount of an opportunity was also the same values that they were using to generate quotes. So we’d essentially inadvertently created a requirement that they needed to create a quote in order to forecast pipeline, which is obviously insane. No one should do that, especially early on in the pipeline. There isn’t a quote that’s necessary. They’re still validating the solution. They’re still working on negotiations to get a sense of it.
So we’ve created this unfortunate hurdle that was completely unnecessary that completely broke essentially a couple weeks’ worth of forecasting as we worked to build an alternative way for reps to forecast renewals as well as to forecast expansion on renewals and forecast their own new business opportunities. So I would say, I would heavily recommend as you’re going to the CPQ implementation, ensure that the critical needs of forecasting and pipeline will be unaffected by the CPQ implementation. If so, minimally to ensure that this process is not, is not a train that’s crashing into this one.
And those two things, looking back would have made it a far smoother deployment for us, say now we’re in a, you know, a fantastic state, but it took a good, I’d say, even though we had built a very adaptable solution, we had to make a number of quick iterations to relieve the friction that was being pushed on our go to market team.
Behdad
No, and I appreciate it. I think these Nuggets are really valuable because these are the learnings that we can share with others because it’s kind of hard to know the things that you don’t know as you’re kind of embarking on a journey. I want to come back to one more point that you made when you were describing the reasoning for driving ACPQ implementation. One of them was that you needed to improve your time to billing.
So how much have you improved it now and has it really met the objectives that you had?
Kayvan
Oh, substantially. I’d say that as I’d mentioned earlier, our, you know, our renewals, right, Our customer would renew. As a business to meet our quarterly goals, we would prioritize with our small but mighty Rev OPS team before the launch of the CPQ. Let us process and build new business and upsell opportunities first because of those are going to be essentially bookings that hit the quarter immediately, renewals for rules recognition. If it closed earlier, we’d always backdate the renewal for everything else. So we often delayed processing renewals for a week to two weeks, but we focused on getting the new business and upsells in. But still it took days to process all of those. So you think about a renewal that renewed on time, we don’t get to it for two weeks, then we get it to finance to go reconcile it. We’re sending an invoice out for renewal nearly a month later.
We’re sending out new business and upsell invoices over a week later, which is you think when you’re creating this constant major lag in billing cycles. So that was getting to a point where by December, it had increased. The Billings lag time had increased month over month for like 6 months straight.
So we knew that we needed to get this EPQ out now, especially with a growing go to market team, bringing new products to the market, new pricing and packaging. So there’s going to be additional complexity in processing it. We knew that if we didn’t have something in place while we launched this, we would potentially balloon it to a point where redouble the time and that’s just unsustainable, right? So the launch of the CPQ got up to a point where we were aggressively measuring all of these data points. We’re measuring we, when we closed one, when did we confirm the win? Essentially operation says this is official, this is good, it’s ready to invoice when it gets to finance, When finance would, you know, schedule the invoice, when was the invoice collected ? All of those things are meticulously measured and we saw a drastic reduction from you know greater than two weeks on renewals to the same day we process them.
And of course new business and upsells which were just about a week also coming down to same day processing which led to you know after we got all the bumps in the road cleared out and go to market team was able to really adapt to the system. We had a records billing collection month in May and it’s been that way since where we had a complete reverse on what was that lagged. And now we’re seeing a very accurate reflection of how the business is performing in terms of both our bookings and our buildings collections.
Behdad
Thank you so much. So we can pivot a little bit to speak a bit more about the data flows that we refer to as usage data that kind of flows through the entire quote to cash system. I mean, CPQ is one, of course, important, important piece of a quote to cash, but there are more items and you mentioned, for example, billing and CRM. But before we do, I want to take one question that has come in, which is quite closely tied to what we just spoke about.
Behdad
So this is from Rohini. And the question is, is there a set of key metrics that one should use to determine the health of a CPQ implementation? So I think you kind of keep it a little bit more short and tidy. Maybe you can express the two to three key metrics that you use.
Kayvan
Of course. Yeah, so I kind of mentioned it in my in my earlier Ted Talk podium was we want to make sure that you’re keeping an eye on those billing details. So the time from, granted every organization has some different processes, but assume that between the time I close and the time I get an invoice created. If your CPQ implementation is going in the right direction, that should either at first stay flat to not increase, but should decrease over time. We’ll also want to keep an eye on your, your billing cycle. Is it becoming more in line with your bookings? You know your booking cycle, the closer it is, the better.
And of course, I’d say a big thing that seems to be a, it seems it’s a leading indicator is your sales cycle length. Because any change in the way you implement a CPQ and any time that you implement a change in how an agreement is closed, one by the go to market team, there is a risk that you see the sales cycle length increase generally towards the tail end of the agreement, right? Not in the beginning while people are still talking to customers, demoing the product. It’s really, hey, I am trying to get a quote out, I’m trying to get a contract out. Have I gone from a 45 day cycle to now a 50 day cycle? Is that because I’ve created a bloat in the process that should be an immediate red flag that you need to go and rectify something in the operational processes that is causing a essentially a speed bump for the go to market team. That’s where you really want to keep an eye on is. That’s the leading indicator for everything else. Everything else is obviously going to be important, but if you start to see the sales cycle length balloon, you want to keep an eye on that. And there’s other things that always contribute to a sales cycle length change. But if you can ensure that the CPQ is not causing that bloat, then you want to be able to monitor the other details.
Behdad
Super, thank you. OK, as a bit of a starting point as we pivot to discuss a bit more the usage data and how you guys manage that as it flows through the various systems. Just give us a quick view and let’s see if we get there. So give us a quick view. OK, what your quote to cash environment, what do you have? I mean you have sales force ACRM, just walk us through what do you have?
Kayvan
Yeah, so we have we have sales forces or CRM, NetSuite is our, you know financial system of record. Seligo is the connector between the two. So that is essentially the the bread and butter of our of our configuration.
Behdad
Do you have something for analytics specifically?
Kayvan
So we have Tableau internally built on Snowflake, yeah, where as our data warehouse. We recently launched Tableau. No, I think we launched it in towards the middle of Q2. Yeah, middle of Q2, we launched Tableau before that we actually had, like most organizations, we realize that oh, every team had their own data visualization software. We had Power BI, we had, I think we had Looker at some point. So there’s each team had their own visualization software and of course finance and Rev OPS for living out of Google Sheets and Excel. So we have made some significant run. This is a credit to our business intelligence team and their fantastic work getting Tableau live. But there is an element of we are only scratching the surface of what we can do with a true data visualization platform because a lot of our usage data was being rubber banded and duct taped together.
Behdad
Yeah, so that’s a good lead in because you guys have a fairly, I would say complex offering because you have a hybrid as you mentioned earlier on in our discussion, seat based, team based, but you also have pay as you go and prepaid. I’m curious, I mean that generates quite a lot of complexity. I’m curious to understand how do you manage the usage data that flows in and out between the different systems that needs to constantly speak with each other if you want to just walk that through, what does daily practice look like for you guys?
Kayvan
Of course. So let’s use a new customer that signs on with us with just ACP. Just use it as an example. It’s the simplest but shows the complexity that’s at play. New customer signs a contract, Revops is going to process the agreement quickly and it will be at that point scheduled for invoice as the opportunity is processed and sent to NetSuite through Seligo, which they can then use to generate the invoice. So that is, that’s all automate, right? There’s a bit of a manual where the Revops team is validating the contract, ensuring that it looks right before hitting like that confirm win check box, which then shunts it into the process that funnels it to finance. That’s fairly automated. What is not automated, and This is why the CPQ was so important for us to implement, is that we wanted to lay the groundwork for entitlements management at scale because we were not doing that. It’s a major burden.
One of the things that we haven’t solved for yet, which I have in previous roles, but wanted to get start laying the groundwork here is I may have, you know, provisioned a contract now, but I now need to give these users access to the platform. In a perfect world, a user is essentially given access through the contract clause. You have that system feed your product entitlements management, which will then activate a user and give them access, give them the welcome emails, all of that goodness and then allow the go to marketing to onboard them effectively. We don’t have that. What we have is that once a contract is done, a user is then created manually by Rev OPS inside our platform. They are provisioned access through essentially a manual configuration of their entitlements within the the product environments back end and then that’s when they get all of their their access.
Importantly, we do have a connection between Salesforce and our product environment through the Salesforce contact record allows us to say this contact at this account is this user in the platform at this account and allows us to connect usage data truly like what are they engaging with, what are they doing, what’s the health and bring that over to Salesforce essentially as as field updates that are on like, you know, daily data, data pushes. But that’s not where the the provisioning, the entitlements, all of that is essentially just an information feed, but it’s not actually automating anything at scale.
But that’s really important, right before we can get to automation at scale, we need to have some connective tissue in place. So that is where there’s a lot of manual work is that we are going and taking a user, creating them in a system that creates the connective tissue. And now we start to get the cursory data moving back and forth on what are the major features that they’re engaging with, as well as being able to bubble that data up at an account level.
Behdad
What would you say are some of the more prominent challenges that you’re facing today with regards to usage, data management, handling of so to say?
Kayvan
It’s a thing that I’ve opined on in the past is enterprise data architecture. At the end of the day, especially for larger customers where you’re thinking enterprise and strategic customers where you’re likely to have multiple concurrent teams that have separate billing, separate buyers, you’re not expecting them all to be on the same relationship, right? So in a world like for us where we have contacts are related to a user, the one thing that we don’t have is what E contact. So we have a contact related to opportunities and all that, but we don’t have a user related to a specific billing relationship.
So we have to essentially walk our way across the systems to say, hold on, I have a renewal coming up, what users are specifically at this renewal. For smaller customers, that’s easier. And importantly, organizations as they grow. When you’re you’ve got a handful of customers and you’re sub 5 million in revenue, chances are you know what the users are and the customers because it’s tribal knowledge at that point. But as you grow, you will not be able to scale your customer success team infinitely to say, hey, everyone needs to have a walking hard drive in their brain of who are the users at this account. And as attrition happens and change over role growth, people leave an organization, you’re at very significant risk of losing that knowledge. So, so you can get to a point where, yeah, you can have all of your users listed as like notes on an account, but that’s not scalable, that’s not remotely, that’s still manual. So you need to have some architect that says this contract is low is related to these contacts. These contacts are then related to this user. So at least if you have that you can say these users dotted line collect to this billing relationship.
But what we have right now is just these contacts are at this account and there can be many teams at an account. And so my team spends a, my team spent a great deal of time in, you know, throughout this year as we’ve launched our pricing and packaging is doing the manual reconciliation of saying especially for our strategic team who are working with potentially hundreds of users across dozens of contracts or to say, hey, look, this, these 5 users are for this renewal. These 10 users are for this renewal. And if you think about it, that is we’re essentially doing the manual work now so we don’t have to do it later because the next renewal will be nice and clean. But because we didn’t have a CPQ to date, all of that legacy knowledge is in like notes and emails and text strings on an account. So that is by and large, the biggest hurdle is trying to give our teams an effective understanding of what does the relationship look like, the usage data at this account. Because importantly, I don’t know what the usage data looks. I don’t know the health, I don’t know the engagement, I don’t know because I don’t know which users are with what renewal. So we have to do that upfront manual work so that we can have a cohesive picture and go to and give the customer the best experience possible.
Behdad
Yeah, I I also see this, Kayvan, there’s a fairly common problem for many businesses. So I think there’s been a lot of passion and rage around usage based pricing. But the interesting point is, so if we take a similar situation like you’re offering, you’re offering, for example, 10 seats. From a customer standpoint, since you need to draw down cost, you might say just we want to just cancel a number of seats or we just want to cancel a license. But you would want to understand how much are we using at your software or your platform From your side, You also stated that you need to have that usage consumption information. Nobody’s talking about pricing based on consumption. We just want to know how much is used. If you could argue one reason is to kind of prevent churn now, since there is of course a good reason to also provide the different way you can pay for your products. If you want to move to usage based pricing, that’s an obvious factor why you need it for. I think that this what you mentioned and thank you for sharing us honestly is that this is a very common 1. And I would just encourage for most businesses to think about the fact that don’t, don’t attach it only to the fact that you need to understand usage because you’re moving to usage based pricing. There’s probably 9 good reasons before then why you need to understand usage, and you just articulate a few of them.
But I wanted to get back to the manual efforts you mentioned. Again, I would say one of the most typical situations for most businesses that we speak with, you have automation on certain fronts. But you mentioned when you were explaining now how you’re managing data that flows through the system that there’s quite a lot of manual work. Can you give us an estimation of on a monthly basis, how many hours do you expect you’re putting into manual work just to kind of solve for the lack of automation roughly?
Kayvan
Oh, I’d say probably easily 20 to 30 hours if I were just think about let’s divide it across two to three individuals who are doing. And then specifically around entitlements management as a split across also the team because we have, you know, partner operations groups that work on our call services team, which requires a lot of manual provisioning and entitlement tracking and usage data as well.
So I’d say easily 20 to 30 hours in across and that could be even understating at that point if we think about some of the other tangential processes that are downstream effects from our manual process. So you can easily balloon up.
Behdad
We have a few questions that have come in, but before we take them, I’m just going to try to round off this section of our conversation. And my next question, Kayvan, is now with this is a bit of a backdrop. What would the idea look like from your standpoint? Now again as we were discussing the entire kind of flow of usage data from the customer side, as you say all the way to billing CRM across all the systems, what does idea look like for you? What is it and what does great look like?
Kayvan
The perfect world truly would be you sign a contract you know with the customer and the CPQ implementation itself then feeds finance also with just a cursory manual review to ensure that all your Ts are crossed and your Is are dotted. Similarly, your go to market system of wreck or whatever that may be with your CPQ implementation then is connected to your product environment. There is, you know, a number of products on the market that I think are starting to make that easier or you could build a homegrown, but there’s some way that your CPQ implementation is then feeding your product environment when it comes to to provisioning.
So you have a new user, that user’s identified in Salesforce, that user is then linked to a instance in your product environment, a user’s provisioned and they inherent the entitlements and access according to their user profile or that firm’s profile. Doing all of those things then ensures that all of the stuff that is built on it is consistent. You’re able to see who’s paying for what, you’re able to see who’s up for renewal, what are the users? You’re able to build effective health scores. You’re able to understand usage trends, you’re able to build insightful dashboards for a go to market team to use to prioritize upsell campaigns, turn mitigation plays.
You’re able to tie, you know, firmographic insights, persona insights to performance over time to see, hey, has our ICP changed over time? Is our existing understanding of an ICP actually flawed because what we thought is good for cells are not good at are not as good for retention and vice versa. Maybe these customers take a little bit longer to sell to, but they’re very sticky customers. So all of that go to market strategy comes from that automation being in place easily. So that’s, that’s the ideal statement that you have these connected systems, you have your warehouse ingesting that data and it’s obviously all linked together with a nice Rosetta Stone.
And on top of that, you have a visualization environment, Tableau, Looker, Power BI, whatever that might be that provides a consistent narrative for all stakeholders on the nature of the business like from from acquisition to expansion.
Behdad
I think you did a great job when you were speaking about lead and lag measures to kind of follow when you were speaking about metrics. I think I have a similar kind of analogy here. One of the lead issues you can look for is if you make a change in one place in your court to cash system and you consequently have to make 10 other changes manually, then you have you have a big problem here. I think what you want to have an ideal state is you want you make the change in one place and then you have an automated sequence that make the changes wherever else it needs to be. I think that’s AI think that when you spoke about flexibility and agility, that’s one of those I would say goals that anybody else looking for an optimized ideal state should look for.
Kevin, what actions are you taking in the near term to kind of work towards this ideal state with the automation across the board?
Kayvan
I’d say that we continued making some adjustments throughout the summer where we optimize a bit more of our papering process to ensure that there was more consistency there. We’ve made significant shifts in feeding more data between our product environment and Salesforce. We worked closely with our product team in the past couple of months to start laying the groundwork for enterprise data architecture. The ability to have a user housed within an instance that’s part of a larger like company hierarchy. So we’re able to have like teams that are connected to specific billing relationships.
We started the development work on that, but some of that has transparently paused as as we were acquired by Alpha Sense in the middle of this year. We are working on a broader go to market systems consolidation. We want to bring both together to ensure that we’re giving our customers the best experience that they can have. And we can’t do that if we’re living in, you know, disconnected system. So there’s an element of where a lot of the Tigis architecture, it will be sunset over the course of the next six months as we move to a more unified tech stack.
Behdad
Let’s take a question from John Medeiros here. You talked about it before, but I guess that it’s worth elaborating on. So, the question is that you basically started your project in November 2023 and went live in 24. I guess the premise of the question is that, wow, that was pretty fast. How did you do it?
Kayvan
Yes, it is. That is the accurate timeline and short version is I think at first I needed to ensure that I brought in a team that was effective and able to do this. So I, I hired, brought in a Rev OPS systems leader who I’ve worked with in the past. So I knew, understood my vision for an effective and agile, you know, declaratively built Salesforce CPQ. And she started I think like mid November. So she lived. I just dropped her right at the deep end and said we got to start working on this. Pretty limited. I did a lot of pre work documentation with my existing team in place to ensure that we had as much of A resource for her to get up and running. I also brought in a consultant to part of this. I highly recommend them. Candy Box, Candy Box CRM. They’re a fantastic Salesforce consultant. I brought them and I’ve worked with them in the past and then once again, they knew my vision for what I wanted to implement.
So for a period of time, I had a full time employee as well as a consultant to essentially 2 consultants on staff to just focus full time on development. An important thing that I, I need to convey is that while we had Salesforce needs, I put essentially put a blackout. For all of go to market on any changes to Salesforce through November and December and January, because any hours that I would have allocated to making changes to the existing system would have been hours taken from developing and testing the new CPQ. So I had to send you lay the groundwork pretty early on is that come November, we’re not making any changes to Salesforce with how it’s operating because every waking hour needs to be committed to having this ready for our launch of our pricing and packaging in February.
It’s only that level of alignment with your stakeholders that they understand that this is the only thing you’re thinking about for the next three months is the way that gets done. But understanding many organizations cannot make that full time commitment. They’re going to say, we’ll, we still have other things we need to commit to doing.
That’s when your your timeline, it has to expand. But because we were aligned with getting to this February 1 like launch date, we needed to ensure that we were prioritizing ruthlessly on this issue.
Behdad
OK, we’re going to take one more question before we need to start wrapping up. Here’s a question from Tunde. How’s the initial product trial delivered within the context of your system set up?
Kayvan
Oh, great question. So a contact essentially is created in our sales force environment and we then essentially push that contact into the product environment. And there’s a couple field settings on the contact record and says this is going to be a trial. Here’s a trial start date and end date and it will create them in a essentially an account equivalent, like the mirror of the account in the product environment will mirror Salesforce.
And so simply the users created with a trial start date and end date, they have a trial user status. We essentially map the entitlements directly inside the product platform. So once they get provisioned, we go into the product and say these are the entitlements that they’re going to have access the various content sets, data sets, their region, all of that stuff for compliance concerns, etcetera.
That’ll all be handled inside the product. For essentially this first is we create the contact that creates the user and we go into the product environment and essentially manually adjust the settings there. Now granted, there are ways that we have it so that reps can data load and create trials at scale, because if you have to do one-on-one for 100 users, anyone will go nuts.
So we do have a similar type of scale where we can create contacts here with trial start and end dates. And then we can just map some entitlements in bulk as well on the product environment side, which generally our Rev OPS team will aid with doing things in bulk.
Behdad
So we have a few more comments and questions still, but with respect to time, we’ll push on to wrap up, but I encourage everybody to continue to add your questions and comments. We do follow up everyone after the show as well. So we would love to hear from you. So just keep them coming.
OK, I’m back to you. As a final question, as a bit of a wrap up, what would you like to leave our audience with? What are your main advice and takeaways in terms of the initiative that you have driven where you are and also where you’re heading?
Kayvan
I’d say a any sort of any sort of CPQ is not a light lift as you know, kind of kind of like, you know, addressed earlier and even the comments from the audience, you know, three, you know, four or five months of implementation is a rapid timeline for such, for such software. And we were obviously greater than 100 million ARR at that point. So you can think of the complexities of that kind of implementation. So because they’re not a light lift, I would say while you’re evaluating is ACPQ the right thing we need to do truly address what you’re trying to solve for because there is I think often a misnomer or an I’ll considered perspective that, oh, we’ve gotten to this size, we need a CPQ.
Well, A/C PQ is really meant to solve for a couple of issues, right? It’s either you have multiple product offerings and varying packaging, which requires some level of consistency in delivering that on a quote. If you’re a single product company with a single pricing scale, I would argue that you don’t need ACPQ because the reality is there isn’t the permutations that that that create these conflicts downstream. Well, you don’t need it right now.
It’s when you start thinking about regional pricing, you’re thinking about regional discounting, you’re thinking about multiple products, you’re thinking about packaging and the various flavors that you can put those together. That’s where things become a little bit more complicated. And you want something that’s going to be intuitive to put together for your sellers. So I’d say first truly address what you’re trying to solve for and have that as your North star with all of your stakeholders. Because if you’re saying, look, we’re going to go, let’s say you go buy a CPQCPQS are not cheap platforms that you need to ensure that you are not just signing up for a budget sync for the next two years through sheer manpower that’s being used to implement and develop it for the hours of implementation.
Support the aggravation from your go to market team. You’re trying to solve a specific need that you’re holding every one of your partners accountable that this is the thing we’re solving for, you know, to mitigate the scope creep. Otherwise, you’re going to introduce tech liability, you’re going to introduce friction into the go to market cycle. You’re going to introduce unnecessary burdens on your team, which some organizations comically enough, will then have to hire to staff for the problems that they implemented in the 1st place. The league of organizations. But I was once an organization that had a massive centrally Rev OPS team just to support a cumbersome CPQ implementation. So not only did they outlay tremendous cost in capital to build up the solution, but because it was implemented poorly, they now needed to staff to solve those problems that they implemented in the 1st place. So they really know what you’re trying to solve for, keep the scope narrow, implemented with adaptability in mind so that you don’t end up regretting this decision later on. Because you know, a joke that I’ve, I’ve told with many of my colleagues in the past that there’s two things that you can never go back from, right? And in life is like, once you die, you can’t come back from that and implementing a CPQ. So once it’s in there, it’s going to be a monster to RIP out. So ensure that you do it right the first time.
Behdad
Thank you very much, Kayvan. And with that, I also want to thank everybody for tuning in today. If you want to have more information about the topic that we’ve discussed today, CPQS, how to automate the usage, data management, optimizing quote to cash, simply comment quote to cash in the comments field. Or you can reach out to us in whatever format and channel that you prefer and we will follow up with you.
Kayvan, thank you so much for the conversation today. I really enjoyed it and thank you for sharing all of your insights and experience with us.
Kayvan
It was a pleasure to be on the show and thank you for having me.