The Traditional Build vs. Buy Dichotomy
Historically, there have been two options for subscription-based businesses when it comes to setting up billing platform – build your own, or procure an off the shelf software solution from a vendor.
In either case, a merchant’s first step is to extract and document all of the business requirements from internal stakeholders. Clearly capturing how the billing system will support the organization’s product, marketing campaigns, financial operations, and fit into the technology ecosystem is critical. However, this is a lengthy process that can take anywhere from weeks to months to complete.
In addition, the external environment around the business, including applicable laws and regulations, is constantly changing. This can be anything from credit card schemes implementing new rules to protect the consumer, to keeping up with changes in laws like the CCPA in the U.S. or GDPR in Europe, which mandate how companies are able to store and process consumer data. Trying to deliver a recurring billing software solution that not only complies with, but keeps up with, all these rules and changes adds another layer of complexity.
Building a subscription platform internally
On top of needing to document requirements, building out a solution internally comes with a number of other obstacles. For starters, it can often involve a significant capital expense (CapX) cost in the time and resources required to develop a platform. In addition, there are ongoing costs required for maintaining and updating it as the business and markets change.
Defining requirements on the front end can also pose a challenge because businesses need to gather requirements from a number of stakeholders. This includes the finance, operations, IT, customer service, and web teams, as well as any third parties such as email platforms, tax calculation services, fraud screening, and more. Internal development projects of the size and complexity of a billing platform are lengthy and expensive, often on the order of multiple years and millions of dollars. To compound this, business needs and technologies may change and outgrow the solution in the interim before the system is even live.
Before you decide to build out a solution internally, make sure you consider all of these elements, including true CapX cost, ongoing operating expense (OpX) investment, and sufficient subject matter expertise in all the areas of subscription billing operations.
Buying a SaaS solution from a vendor
Buying a SaaS billing solution also comes with its fair share of obstacles as well. Merchants still need to document their requirements, but there are frequently those that may not be initially discovered. As a result, businesses are at risk of selecting the wrong vendor because they aren’t fully clear on what their own needs and requirements are. They may fail to consider whether the vendor they select will be able to grow and scale with them, continuously invest in the product, and solve for any unique requirements that come up.
Timing is another factor to consider. The fastest RFP process typically takes around three months, and this is only possible for smaller, less complicated businesses moving quickly through the process. For more complex businesses, including those that are operating on multiple platforms and countries, accepting many different payment methods, or have higher volumes of subscriptions, the time it takes to go through the RFP process can increase drastically.
The level of post-build support that a vendor provides is also a vital element when buying a SaaS solution. Many vendors take a hands-off approach and have limited contact with the customer after the initial integration. This means that as the market changes and as new regulations are passed, there is no one supporting the customer with platform updates.
There is also an ongoing OpX to keep in mind, as buying a SaaS billing solution typically comes with a monthly subscription fee as compared to the up-front CapX costs associated with building a solution. Buying a SaaS billing solution is often easier than building out your own homegrown solution, but it is still important to consider all of the factors mentioned above when deciding which vendor to choose.
An Alternative Solution: Rebar Technology
Contrary to what many believe, building a homegrown system or buying a SaaS solution are not the only options available. Rebar Technology is able to offer clients the ease and convenience of buying a SaaS subscription solution, but with a higher degree of personalization that comes with customized development.
Rebar achieves this through a microservices approach, which is a collection of smaller services that are able to operate independently and in conjunction with any other microservice. Rebar combines different microservices to give each merchant a unique, personalized solution. This microservices approach allows Rebar to provide faster speed to market compared to internal platform development. By taking advantage of pre-built components, Rebar can swiftly grab and combine them with other customized components to deploy the client’s subscription management software solution quickly.
Rebar’s microservices cover the fundamental components of the subscription life cycle, and they are able to be used individually or customized to create a complete solution. These microservices include, but are not limited to, the following:
- Marketing offers, including trials and discounts
- Products and grants
- Accounts (customer profile) and subscriptions
- Invoicing and transaction management
- Secure payment credential vault and iframes
- Gateways with popular payment processors
Additionally, Rebar is able to easily integrate a third party of the client’s choice. For example, if a client already has their own homegrown CRM system, Rebar can plug in with that system rather than require the client to synchronize with Rebar’s CRM. This eliminates redundant data, ensures that there is a consistent master record associated with a particular piece of data, and reduces the time and money required for synchronization. Because of these features, no two Rebar solutions look exactly alike.
Why clients come to Rebar
Clients may choose to come to Rebar for a multitude of reasons. They may feel like they have outgrown their current subscriber, or they may feel unsatisfied with the quality or services of their current subscription billing system. Alternatively, they may have a homegrown system that has become too expensive to maintain and to adapt to business and market changes.
Market changes in the subscription space
Rules and regulations that affect subscription billing are constantly changing, particularly in the privacy space. Consumers are becoming more and more invested in protecting their information, and companies need to comply with the laws that continue to be passed around this.
It’s also important to stay up-to-date on changing trends in the subscription space. Subscription is currently on an exponential rise, even in industries that haven’t traditionally operated on a subscription model. For example, car subscription services (e.g. pay a flat fee that covers insurance, roadside assistance, routine maintenance, etc.) have recently come onto the market, whereas in the past, consumers would never have even thought about subscribing to these services. This is just one example of a traditionally non subscription-based industry that is starting to move into a subscription business model.
For industries that are traditionally subscription-based, many are starting to consider moving outside of the domestic market to sell overseas. This requires both a deeper understanding of international markets, as well as knowing how to sell to them.
New payment methods are also becoming more popular. It’s becoming increasingly important for subscription-based businesses to be able to accommodate these payment methods, as it allows them to bring in more customers.
These market changes are all things that need to be accounted for when building out a subscription solution for clients.
How Rebar adapts to market changes
Rebar lives and breathes subscription. They stay up-to-date on what’s happening in the market through industry groups and conferences, following trade publications, learning from merchant clients, and more. They also leverage their partnership with consulting firm, W. Capra Consulting Group, to keep up with changing rules and regulations.
When there are changes in regulations that may impact clients, Rebar looks at which modules are impacted and addresses them individually. For off-the-shelf modules, the updates that Rebar makes to solve for compliance issues automatically applies to all clients utilizing that module. For customized modules, Rebar works with the customer in a professional services capacity to upgrade the module at the customer’s pace.
Rebar also communicates with the client about trends that are relevant and advantageous for them to consider building out. For example, insurance companies are required to comply with extensive regulations around what they’re able to do. Rebar would take this into account to understand what does and doesn’t make sense to bring into their subscription billing platform.
Rebar account and delivery managers maintain very close and frequent lines of communication with their clients. Whenever Rebar hears about a new trend or regulation change that may impact their client, Rebar initiates a conversation with their client to discuss the change with them.
How Rebar communicates with clients
Clients who use Rebar to build out their subscription billing solution receive continuous support beyond the initial deployment. Rebar remains engaged and monitors the platform for the client so that if any unexpected changes occur, the client is aware. For example, COVID-19 has greatly impacted customers, and the subscription space was not immune. Customers have become more cognizant of their ongoing subscriptions, and many have been cancelling subscriptions that they previously ignored or forgot about. Collection rates have also dropped, because of the drastic effect that COVID-19 has had on consumers’ financial situations. Rebar has worked closely with clients to proactively address the situation before it becomes a bigger problem.
Learn More About What Rebar Can Do For You
Rebar is a novel alternative to a traditional build vs. buy dichotomy. Rebar offers merchants the customization and control that comes with building a homegrown subscription system and the speed and scalability that comes from service based software. This unique technology approach, coupled with ongoing support of experienced subscription professionals, can provide the optimal managed recurring billing software solution.
To schedule an initial consultation with Rebar Technologies, send a message to [email protected].