Indeed subscription-based economy is growing significantly, and "Digital" greatly impacts the traditional CRM to ERP cycle. Next week we will discuss at the TM Forum action week the impacts of this on RA and on #BusinessAssurance in general.
Saying that, subscription-based economy is not something new, and many services have been mostly subscription based for many years, e.g., DSL. The actual version of GB941 considers subscription-based services, an proposes many best practices how to apply RA on these services. So, I do not think that a revolution of GB941 is needed, but some adaptations are certainly desired.
Regarding ARR, I think that it is an important metric, but as far as I can see it is an addition, and not a substitution for CSPs traditional way of measuring revenues. Do you agree with this?
Subscription priced single service offerings have been provided by CSPs for a good while now, sometimes as a necessity where usage-based pricing was desired but not available. Usage based pricing is a useful price differentiator easily understood by customers. In reality there may be little incremental cost associated with increased usage, but customers have an expectation of a price differential between high and low service users and are prepared to pay on that basis.
The growing complexity of multi service bundles is new and does raise the issue of how and when its appropriate to recognise revenue. This may actually become easier for individual services. Traditionally there is a usage-based component to revenue recognition, not recognising revenue until the service is used. If the service is only based on subscription, revenue recognition for each service should only be tied into calendar entries, not customer behaviour. The bigger issue comes where individual services are provided from separate cost centres and how a single bundled price allocates revenue to each service.
CSPs do already split bundled revenues to a limited extent, mobile plans include voice, data and messaging services, each may have a separate P&L and each requiring individual revenue allocation. To continue this process successfully to more complex multiservice bundles, a much better understanding of cost of delivery will be needed. An organisation getting this right can target bundled discounts in line with individual service costs, keeping each service profitable to gain a real competitive advantage.