Planning a revenue stream system in an e‐business environment
| Date | 01 November 2001 |
| Pages | 406-413 |
| DOI | https://doi.org/10.1108/EUM0000000006171 |
| Published date | 01 November 2001 |
| Author | Kenton B. Walker,Eric N. Johnson |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
Planning a revenue stream system in an e-business
environment
Kenton B. Walker
University of Wyoming, Laramie, Wyoming, USA
Eric N. Johnson
Indiana University, Indianapolis, Indiana, USA
Introduction
With companies facing global competition
and increased pressure from customers and
competitors to do business on the Internet,
revenue system management has emerged as
a key strategic planning factor. Managers
must respond quickly to competitor actions
and changing business models to make
intelligent, effective business decisions
regarding product placement, order
fulfillment, and other critical elements of
doing business online.
To compete successfully, companies must
improve the quality, speed and
responsiveness of their customer service.
Attaining these objectives requires
integrated information systems that support
strategic management of revenue drivers.
This requires an entirely new approach to
integration, where companies use Web-based
applications and interfaces to integrate their
business processes and information systems
with those of their customers (Radding, 2000).
An electronic commerce (e-commerce)
application should eliminate gaps between
ordering, distribution and payment (Yang
and Papazoglou, 2000). The information
systems comprising the revenue cycle are a
key component of this effort and represent a
major focus of any information systems
project designed to improve customer
satisfaction, organizational efficiency and
profitability.
The purpose of this paper is to highlight a
number of important considerations in
planning the revenue stream segment of a
business information system. Particular
emphasis is placed on the major issues facing
developers of a revenue stream system
project, especially new developments in e-
commerce applications. Many new software
products provide dramatic improvements in
capability compared with software from the
1990s.
Primary functions of the revenue
stream information system
The revenue stream includes sales order
receipt and processing, credit verification,
pricing, invoicing, revenue recording, return
processing, and cash collection. Revenue
stream information systems provide the
foundation for:
.processing of clerical functions, such as
billing and journal entries;
.linking sales, order processing, order
status, customer service and cash
receipts;
.customer relations support;
.control of uncollectable accounts; and
.reporting to management and regulatory
agencies.
Traditional accounts receivable (AR) and
billing (BL) systems represent the
transaction-based portions of the revenue
stream that provide data to the financial
accounting and reporting system.
The mission of a revenue stream
information system project team should be to
provide a flexible, integrated business
process that enables real-time customer
service and process control. Specific
elements of this mission include identifying
system deliverables that allow employees to
respond to internal and market needs by
providing real-time pricing capabilities (such
as, for example, flexibility in price promotion
programs). Other elements of the system
include modules for reporting revenue
information to management, posting
transactions to the general ledger, enabling a
variety of cash collection strategies,
furnishing measurement and analysis tools
for credit management, and generating
documents (e.g. sales invoices and credit
memos).
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[ 406 ]
Industrial Management &
Data Systems
101/8 [2001] 406±413
#MCB University Press
[ISSN 0263-5577]
Keywords
Revenue, Accounts receivable,
Invoicing, Internet,
Systems development, Planning
Abstract
Many organizations are adopting
an integrated approach to
implementing and managing
important elements of their
revenue stream activities,
particularly as applied to
conducting business on the
Internet. Integrated information
systems are an important part of
this effort to improve service to
customers. Describes what
management can expect from
recent advances in integrated
revenue software applications,
outlines major system
deliverables, and reports critical
success factors for traditional and
e-business revenue stream system
projects.
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