Workday Podcast: The A to Z of Quote-to-Cash for Tech and Media Companies

You may not realize how quote-to-cash is a part of everyday life, but it’s humming behind the scenes as companies work to influence your decisions about apps, services, and subscriptions. In this episode, it’s all about quote-to-cash for technology and media companies with Igor Stenmark from MGI Research and Justin Joseph from Workday.

Audio also available on Apple Podcasts and Spotify.

The term “quote-to-cash” may not ring a bell unless you happen to work in a certain category of sales or finance. Simply defined, it’s the end-to-end sales process, the journey from prospect to customer. But it’s a part of your everyday life whether you realize it or not, as tech, media, and entertainment companies work behind the scenes to influence your decisions about apps, subscriptions, and services. And how well they execute their quote-to-cash strategy can make a big difference in their success. 

In this episode of the Workday Podcast, it’s all about quote-to-cash for tech and media, with our guests Igor Stenmark, co-founder and managing director of MGI Research, and Justin Joseph, senior director of product strategy for communications, tech, and media at Workday.

Here are a few highlights of our conversation, edited for clarity. Be sure to follow us wherever you listen to your favorite podcasts, and remember you can find our entire podcast catalog here.  

  • “You want to be holistic about it. Companies that are successful at quote-to-cash, they don’t just say, ‘go fix revenue management.’ It’s a multidisciplinary approach because success is a team sport. Think about what outcomes you’re able to generate. Success here means that you are able to meaningfully alter outcomes for your business in terms of revenue growth, profitability, customer satisfaction, and market share.” —Igor Stenmark 

  • “Quote-to-cash is the entire process of how a company interacts with a customer. It’s understanding your customers, the products and services you’re selling them, and the different types of conversations that you’re having with those customers and prospective customers. It’s having a fully transparent process from beginning to end on how you interact with your customers. And in the tech and media space, it’s how you differentiate.” —Justin Joseph 

  • “It’s about enabling what we call ‘brand moments.’ Customers will make a mental value judgment about every interaction with you. So you have an opportunity to either elevate your brand or denigrate your brand. And if you don’t do anything, you just missed an opportunity to reinforce the brand as well.” —Igor Stenmark

Jeremiah Barba: We all face dozens of choices every day when it comes to the technology we use and the media and entertainment we consume. Which streaming service subscription to keep and which to cancel? Is that app worth paying for or should I use the free version? And while you may not realize it at the moment, companies are working hard to influence your decision through what is often called “quote-to-cash.” I’m your host, Jeremiah Barba, and today on the Workday Podcast, it’s a deep dive into quote-to-cash for tech and media. I’m joined by two experts in the field --- Igor Stenmark, Co-Founder and Managing Director at MGI Research, and Justin Joseph, Senior Director of Product Strategy for Communications, Tech, and Media here at Workday. Igor and Justin, thanks for joining me!

Justin Joseph: Thanks for having us.

Igor Stenmark: It's a pleasure.

Jeremiah Barba: Awesome. So first off, tell us a little bit about yourselves and your backgrounds in tech and media. And, Igor, why don't you go first?

Igor Stenmark: Sure. So this is Igor Stenmark. I am with the firm called MGI Research. MGI Research is an independent industry analyst organization. We focus on monetization. This is what used to be called quote-to-cash. So quote-to-cash is really our main topic that we cover. I have been involved in the software industry since the mid-1980s and think of myself as being pretty lucky to have seen the world of software evolve, not only in time but also kind of be able to see it through different lenses, having been on the user side, on the software startup side, working for large organizations, industry analyst, strategic adviser, investor, and board member.

Jeremiah Barba: Awesome. And, Justin.

Justin Joseph: That's a lot of accomplishments. I'll try my best here. Yeah, Justin Joseph. I'm our senior director of product strategy here at Workday for the CMT industry, so communications, media, technology. Essentially, what that means is I'm focused on our build-by-partnership investment strategy for those industries. And the really big thing about those industries is revenue. Quote-to-cash is probably the most important topic. It's what I'm really passionate about and really what I'm focused on from a product strategy perspective. Been here at Workday almost four years. It's gone by really, really, fast. And with that, have been able to work with several of our top tech and media customers and had done so prior to joining Workday.

Jeremiah Barba: That's great. So glad to have you both. So let's start by defining terms first in case, anyone who's listening isn't super familiar with the term. And, Justin, we'll keep it with you here. What is quote-to-cash, first off, and why is it so important for tech and media?

Justin Joseph: Yeah. I would say that the verbiage can definitely get confusing because over the years it has certainly changed over time. You know, quote-to-cash, I would just really basically keep it as simple as possible. I will say that is an entire process of which and how a company interacts with a customer. And you're probably thinking, "Okay. What, what does that mean exactly?" There's a lot of different processes that are packed into that. It's things like understanding your customers. It's understanding the products and services you're selling to those customers. It's capturing all the different types of conversations that you're having with those customers and prospective customers. It's understanding the bills that you're sending out. Is there a lot of transparency there? It's understanding the collections and the cash that's coming in from those customers. And it's really just having a fully transparent process from beginning to end on how you interact with your customers. And for that, essentially, in the tech and media space, it's how you differentiate. Right? It's what customers remember you by is that entire process and how you support them.

Jeremiah Barba: And I think that's a great segue into this next question which will go over to Igor. So, MGI just named Workday a leader in revenue management for tech and media. And if I understand it correctly, revenue management is a big part of quote-to-cash. Right? It's a key part. So let's talk about that award. And in particular, what led to Workday being chosen for it?

Igor Stenmark: We see revenue management as being extremely important as a-- kind of a integral part of, how quote-to-cash or, as we call it at MGI-- we call it monetization platform or agile monetization platform or AMP. This really is the element that controls how companies record, report, and disclose their revenues. And the reason it's important is because if you consider the costs of failing in this area, it's pretty dramatic, almost to a point of executives going to jail and companies facing catastrophic outcomes. The focus on revenue management kind of picked up in the last few years, especially with adaption of some new standards in revenue management called ASC 606 and IFRS 15. Initially, a lot of companies got into compliance by doing a little bit of automation at the margin, hiring people, and maybe being really nice to their auditors. But after we passed this initial milestone, lots of companies came back to it and said, "Look, we really need to get very serious about it because this is a issue of scalability of our business." So we cover this space in detail at MGI. We see a lot of interest from the market.

Igor Stenmark: We rate the suppliers using what we call our MGI 360 degrees rating methodology. It's a very tough scale, from 0 to 100 with about 150 individual criteria. It is pretty difficult to do well because the process is tough and the scoring is not easy either. And in the last round of ratings which we just completed early in '22, Workday came in first out of 17 vendors rated, all of them pretty strong players. This is a pretty strong field overall with good management, good products, good distribution channels. The reason, I think Workday has done well - and this is, again, second time in a row - is because the company in this particular area has a very strong combination of, on one hand, high-quality product that works. They’ve good references, and on the other hand, the company has really a strong capability of taking the product to market. And that involves things like really strong management team, channels to get the product to market, a compelling marketing strategy, and really a strong financial background as well.

Jeremiah Barba: That's great, gives some really helpful context. Justin, anything you want to add on to that?

Justin Joseph: Yeah. I mean, I would say revenue and rev rec, in particular, is really key to our financial strategy overall. Igor mentioned not a lot of companies are kind of focused on that. They kind of overlook that sometimes, even though the, the space is very complex and there's a lot of players there. But we look at it as if you can't do revenue accurately, what kind of financial solution is there? It's pretty much integral and key to having a strong financial solution. So for us, it's super important to get that right. And then the other thing, and, Igor, I'm just going to chime in and elaborate a little bit on what you said. It's that, you know, we focused on rev rec and revenue within our organization too. So it's one thing to have great ideas. It's another to have the right skill set and leadership that understand how important this is for our customers and that can actually have the confidence to build it appropriately for what our customers and what this industry really needs.

Igor Stenmark: I would just add to that. So rev rec really evolved very rapidly in the last couple of years from something that was just this tactical discipline that people would use once a quarter, once a year to something that companies are looking to do as revenue management that does not only compliance but automation and intelligence to use it every day on a continuous basis as opposed to just once a quarter or once a year.

Jeremiah Barba: So, Justin, we're going to come back to you. You talked a little bit about this earlier, but let's see if we can unpack it a little bit more. I've heard it said that, quote-to-cash, like you said, is, in its most simple definition, that interaction between the customer and the company. Right? So let's expand on that a little bit. What does that mean exactly?

Justin Joseph: Yeah. You'll hear us say at Workday quite a bit - and you'll hear me say this too - it's all about that customer experience. And the customer experience is all about multiple processes that kind of work together and making sure that that data flows seamlessly end to end. Right? So transparency you've heard me-- you've, you've heard me talk about, previously. But what is really the reality for a lot of these firms is it isn't a connected process. There is a lot of missing data that goes along the way. And few companies historically, right, when we think about how-- and Igor mentioned this, how this entire process has evolved over the last 20 years, there's really been only a few companies that have done it really well. And now is the point where it's really becoming a strong differentiator within especially the tech and media industry overall.

Justin Joseph: So let's, let's walk you through an example. Right? So say you're a start-up. A lot of start-ups, especially in the tech and media industry. You know, you have 20 people. Super easy to understand who your key customers are, what kind of plans you have for them, what kind of products and services that they have today, which ones are kind of critical to your roadmap moving forward, what kind of conversations you're having with those, say, 10 or 15 different customers that are out there. You know, is the billing really transparent? Do you understand the discounts that you're providing to them? Do you have a true understanding of the collections? Right? That's super simple to understand. You're a start-up, pretty easy to manage. But when you scale, which is what most of these companies want to do, you have to rely on a process. You have to rely on systems, and you have to rely on data. And it really basically starts to fall apart the larger and larger and more complex that your products get and how many more customers that you have. And there's all these different kind of conversations that you're starting to have.

Justin Joseph: And I'll give you two examples that I think pretty much start to describe this a little bit more as to why it's a full ecosystem, why it's truly important. So I'll use a very well-known example of Apple. Back probably about 20-something years ago, they released their Apple Music. Right? And if you remember one thing and one thing alone was that market was very hot. You could buy a whole bunch of music from CDs. You can buy from a whole bunch of different websites, all this kind of stuff. But Apple had 99 cents, you can get any song that you wanted. And I'm sure many people that are listening today remember buying those high-quality songs for 99 cents. Now, at the time, what you didn't realize was Apple was taking a whole bunch of your data and applying it to their entire ecosystem. So they had a better understanding of you as a customer, what your interests are, they really were able to push that through their entire quote-to-cash process. So they had a better understanding of you as a customer, and that was their main interaction with you.

Justin Joseph: And a second example that I have is around Netflix. Right? Netflix, super disruptive in the media space. When they started to transition from going to DVDs in to streaming services, that was a big deal. And they had to look at their pricing. They had to come up with multiple pricing and packaging plans to ensure transparency, to make sure that, you know, was there the right type of value that was out there? And again, they were grabbing data and understanding, you know, who's collecting what, where are people watching. A whole lot of this that essentially was total transparency for them as an organization. And I would say, you know, if you remember any of those two things, those are perfect examples of companies that were doing quote-to-cash very well. And others are basically trying to emulate them.

Jeremiah Barba: I refuse to believe that was 20 years ago.

Justin Joseph: That was. Isn't that crazy?

Justin Joseph: Right? Isn't that?

Igor Stenmark: All your songs in your pocket.

Justin Joseph: All your songs in your pocket. Right? Like, exactly.

Jeremiah Barba: It's incredible. Yeah. My main memory is them giving me a U2 song I didn't want. It's just incredible how fast that has accelerated. It is really---

Justin Joseph: Right?

Jeremiah Barba: --profound, yeah, to take it back to where it was about the 99-cent-a-song model to where we are today. Those are great examples. Igor, anything you want to chime in on that?

Igor Stenmark: It is all about the customer experience. The way we define quote-to-cash or more broadly, as we call it, prospect-to-disclosure or agile monetization platform, it's really about enabling what we call brand moments. You may not talk to your customers on a monthly basis, but they will get an invoice, get a bill to pay. They'll have some interaction with the company electronically. And customers will make a mental value judgment about every interaction they make with you. So if they get an invoice and it's indecipherable, if, in their view, it does not correspond to what they signed up for, whether it's a business or a consumer, if it's impossible to get help, if it's impossible to make changes, to return something, to enquire about something, that just really affects the brand value quite a bit. So every moment when you have a brand moment, you have, as a business, an opportunity to either elevate your brand or denigrate your brand. And if you don't do anything, you just missed an opportunity to reinforce the brand. And if you think about the consequences of ignoring this problem, if you say, "I don't care about that. I'm just going to send them an invoice. Great. Let them pay. And if they have a problem, too bad," the consequences are pretty dramatic.

Justin Joseph: Yeah.

Igor Stenmark: You're going to have a lot of customers unhappy with the outcome, a lot of customers complaining, not paying the invoices, not paying on time. So you have high DSO metrics. You have high revenue leakage. Customer retention suffers. Revenue growth suffers. So that's a lot of concrete impact that takes place if you just not pay serious attention to this.

Jeremiah Barba: We have so many choices as consumers. Right? So if we have that bad experience, there are 10 other people waiting to take our money. You talked a little bit about this, and, Igor, I'll go back to something that you mentioned. Quote-to-cash having evolved and changed so much in the last couple of years, could we spend a little bit of time on that and talk about the trends and what has changed so much in the last couple of years?

Igor Stenmark: We see the quote-to-cash evolving. So quote-to-cash originated from manufacturing processes, from mainframe batch software which goes back 40-plus years. And that's why when people talk about quote-to-cash, so often you see those chevron charts with kind of a serial process. You quote. You sell. You contract. You invoice. You manage the order. You collect the cash and so on. And that worked really well for a very long time for a certain class of problems. But when, in modern day, we're trying to apply the same approach to highly disruptive digital business models that involve subscription and usage and a very high rate of change in a business. And if you do that, if you start looking at that, that whole concept begins to fall apart slowly. So about 10 years ago, we published a research note titled "quote-to-cash is dead." And you can imagine, incoming tomatoes that we received. People were saying, "I've been doing this all my life. Are you saying my career's not worth anything?" What we tried to say in the note is it's not that it's dead, but it really has to evolve to meet with modern requirements, how the requirements landscape is changing. And it's not just about billing and collections or quoting, but it's a much broader set of problems.

Igor Stenmark: We’ve defined those through a reference model we call AMP or agile monetization platform. It’s used quite a bit in the field by companies self-assessing themselves, where they stand on that. And it is a broader perspective. And not only is it a larger number of components that cover a broader field of requirements, but it's how these things are organized. It's no longer a serial process but much more kind of a living organism, object-oriented methodology where different elements, billing and revenue management and quoting and customer service, all those things are interconnected and play a role. They function as kind of like a body organ. So think of it as maybe a biological kind of analogy. That's the best way to think about that. So that's been really a process that's been underway for the last six, seven years, and we see more progressive companies taking the lead with that and saying, "We want to look at this holistically. We don't want to just look at billing or look just at revenue management. We want to see how the entire data bus is going to be organized." So that's one of the main evolutions, in this area. More tactically, we see a lot of emphasis on things like digitizing payments, digitizing collections, automating contract management. There's a huge effort to modernize e-commerce, whether that's for B2C or for B2B or for any kind of hybrid model. So those are the kinds of things that are happening as we see it.

Jeremiah Barba: Yeah. It sounds like to me, as someone in marketing, "quote-to-cash is dead" was a headline that did its job which was attract attention, right, and making a valid point. Sounds like you've seen those predictions play out in real life. Justin, you want to chime in there?

Justin Joseph: Yeah.

Justin Joseph: Absolutely. And I am seeing it in real life. We do hear it with our customers. We do hear it in the marketplace too. I'll even break it down into four different things too, just to add on to what Igor was saying, as to, you know, what are the-- some of those key trends? I'll try and boil that down into four different things. The first one is it's not just one revenue stream that you're going to have to support now, as an organization. Right? Companies are thinking about supporting multiple revenue streams. Actually, they kind of have to. Right? So it's no longer, "hey, we're just going to offer a subscription," or, "we're going to offer a service." It's going to be a subscription plus a service plus some consumption that's out there. But they're going to really have to support and understand the pricing and automate all of that, right, just to be able to make sure they have the right touch points for that customer. Second's around intelligent forecasting. Igor mentioned how this whole process has changed over the last, you know, 15, 20 years or so. I used to work in FP&A, so it used to be, you know, once a year, once a quarter, you'd go and plan. Now it's continuous planning. Right? It's continuous planning on the customer, on your products, on your rolling forecast. They want it in real time right now. It's really hard to do that unless you have great data.

Justin Joseph: The third, and this, it may sound contradictory, but it is a key point is profitability. So even though we're talking about revenue-- revenue is obviously what's going to bring in cash and be able to run your business. But if you're doing so unprofitably - and we're seeing that specifically right now as a key trend in the marketplace - you're going to suffer. Your valuations are dropping. Companies that aren't able to go public. We're seeing that happen quite a bit because they're not really sure or they're not able to manage the profitability in an easy-to-understand way. And the last one, the fourth - this is actually what I hear most of the time - is M&A. We all know M&A affects this industry quite a bit. But let's just say you were an organization that all you did was subscriptions, and that was it, and you acquired a company that has a consumption pricing model or a usage pricing model. What do you have to do? You have to support both. Right? And so understanding that that has to be agile, has to be really flexible because you don't want to lose customers. You don't want to lose that, those customers to those other competitors that are out there. M&A is going to be that wild card in the future that you don't know what's going to happen, and you want to make sure that your system is there, right, and your processes are sound to be able to support that in the future.

Jeremiah Barba: That's great. Yeah. We just talked about transformative events in tech and media in another, another podcast, and that makes such a huge difference. Right?

So, Justin, we'll stay with you for this one. Let's talk about platforms and technology. And we've been talking about what it takes to keep up with the changes, right, to modernize quote-to-cash. So what is important for companies to be thinking about, especially, along the lines of platforms? What do you need to have in place to modernize this process?

Justin Joseph: Yeah. I mean, first off, go cloud. I have to say that as well.

Jeremiah Barba: Surprise.

Justin Joseph: Right. That's probably not super surprising there. But the benefits are immeasurable, honestly, if you go cloud, if you talk about real time, being able to put your money towards more customer focused areas. But I'm actually going go back to something that, that Igor had mentioned, is that these processes used to be, part of a chevron chart and kind of used to be looked at as linear. And they're not really that linear anymore. And that data isn't always linear. And what I mean by that is, you know, companies are starting to think about or they are focused on billing. "Oh man, I have to make sure I get the right bill out there. I have to make sure my pricing is accurate. Do I have a better understanding of pricing? I need to do forecasting and reforecast and do all these types of processes. And then, oh, by the way, I'm assuming someone's supporting revenue somewhere along the lines." But that data really has to flow across all of those processes together. And if you're not really thinking about that, it's really going to hurt you. And really, who it's hurting, your customers first but probably more importantly, especially in this environment, are the key personas that are driving those processes. Right? You have people, administrators, different offices that are working on this type of data and need access to this data, and you're really not empowering them to be able to really do their work and to be able to put your company in the right position, for your customers moving forward. So that platform is huge because it allows you and enables data to get to the right places and support the right processes.

Igor Stenmark: If I could add--

Justin Joseph: Yeah.

Igor Stenmark: --add to that. In some ways, this problem is very much meat and potatoes kind of stuff. This is not about deploying the most modern technology out there. I mean, people talk, of course, about deploying AI and machine learning into this area. And there's some credible use cases. No question about that. But it's more about getting everything right, getting all of these disciplines to work together in concert. And that also brings up a very important issue of not just with technology platform but how companies organize for solving this issue. In our advisory practice, we work with a lot of large end-user organizations, helping them do assessments and building strategy, what to do about monetization. And it used to be that we'd walk into a room for the first discovery meeting and there would be the IT department sitting there.

Igor Stenmark: And if you go in now, it's the product management group and the pricing group and the CFO and two or three of his or her direct reports. It's the CEO saying, "Well, what do I tell investors? When are we going to have an accurate forecast that people can trust?" It's a controller worrying about collections and stuff like that. It's somebody who is in charge of customer service or customer experience, "When can we address it so people stop complaining?" And it's the head of sales saying things like, "you know, our salespeople are not productive because our billing system doesn't work. Fix that." It's all about how you organize and what skill sets you bring to the table. So you need to have a multidisciplinary team that works together, and they have to be good kind of all-round athletes, kind of understand not only their area but the impact that has across that service bus to other components of this AMP ecosystem. So that's a pretty important element to success here.

Jeremiah Barba: So interesting how it has evolved and the way that you're adapting. So that's a good segue into our last question here. And I'll stick with you, Igor, though, Justin, you can chime in too if you want. Always fun to talk future, especially to look back later and see how things went. What should tech and media leaders who are involved in this quote-to-cash process --- what should they be focusing on in this next year or so?

Igor Stenmark: I think there's a few key elements here, required components for success if you look especially at companies that do well, in this specific context. Number one is a need for really planning, not just, tactically six months out, nine months out. Often times companies say, "I need to fix my billing problem. We need to be able to do usage-based billing or subscription-based billing." That's too short-term centric. You need to be thinking bigger because billing can really differentiate your company. Monetization, quote-to-cash, those things can really set your business apart and give you an edge in a marketplace that's becoming more and more competitive. So you have to think forward in terms of not only the problems you need to solve six months out, but where is the competitive landscape going to be for your business 36, 48 months out? Requires a bit of imagination and kind of planning and scenario thinking. So that's number one.

Igor Stenmark: Number two, you want to be holistic about it. So again, companies that are successful at that, they don't just tactically say, "Go fix revenue management." They do some of that, but it's always in the context of, "We'll fix revenue management and make sure that this is all connected to quoting and contract management and order management so we continue to sort of play that same song together as opposed to, different instrument groups going off doing their own thing." I think, as I mentioned before, I'll go back to making sure you have the right team with the right skill sets. It's a multidisciplinary approach because success, it's a team sport. And also, think about, what are the outcomes that you're able to generate. I mean, success here means that you are able to meaningfully alter outcomes for your business in terms of revenue growth, in terms of profitability, in terms of customer satisfaction, in terms of your market share. So this is not trivial.

So you need to think about that but also think about the cost of getting it done. We see all too many examples when companies go off on this quote-to-cash or order-to-cash journey way in the wilderness, in the desert for three to five years. They spend $300 million. And the outcome is very average at best or below average. It doesn't really make any difference competitively for the company. So that's very important. The opposite of that is when you have a company that has this kind of asymmetric approach where we say, "how do we generate very high-value outcomes, way above average outcomes for way below average costs and with at least average or better than average agility?" And agility means being able to react in less than geological timeframe, deploy it not in three to five years but maybe deploy it in 6 to 12 months and, and be in production--

Justin Joseph: Yeah.

Igor Stenmark: --shortly thereafter. So that's pretty important. And companies that ignore this, they're really putting themselves at risk, I think.

Jeremiah Barba: Justin, anything you want to add on to that?

Justin Joseph: It’s basically, Igor, exactly how you said it. Companies have to look at this together. If they don't look at this together, their outcomes are going to fail, or they're not going to reach the desired outcomes that they want. Making sure that you have strong executive support, definitely from whoever's running revenue, so I'd say within the chief revenue officer, that office, definitely within the chief financial officer's office. As long as you have those two offices kind of working together because the data's really going to come mostly from those two areas and from the people working in those organizations. Clearly, if you're a technology company, that means making sure whoever's working on product or your products and your services clearly have to be involved here because that's also key data points. Same on the media and communication side, people that are working on your content. But making sure that you have that strong executive support across the board and you are looking at it as a unified outcome for your customers, that's going to be key 'cause then you're not going to reach that level of success because you're looking at it very disparately. Right? You're managing them as separate processes. So I would say that's probably the way to kind of summarize it, at the end here is look at it together. That's where we see a lot of success.

Igor Stenmark: Yeah. Be holistic.

Justin Joseph: Be holistic.

Jeremiah Barba: Again, thank you so much for being with me today. And it's great to have you in person again, sitting in our Workday office there on Empire State. So glad to have you with me today.

Justin Joseph: Thanks, Jeremiah. Really appreciate it.

Igor Stenmark: Thanks.

Justin Joseph: And hopefully, this was helpful.

Igor Stenmark: Thanks for hosting us.

Jeremiah Barba: We've been talking about quote-to-cash for tech and media with Igor Stenmark from MGI Research and Justin Joseph from Workday. If you enjoyed what you heard today, be sure to follow us wherever you listen to your favorite podcasts. And remember, you can find our entire catalog at I'm your host, Jeremiah Barba, and I hope you have a great workday.

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