Demed L’Her serves as the CTO at DigitalRoute and is a software executive with a proven track record in enterprise software strategy. He combines a strong academic background with a pragmatic approach to leadership and technology.
DigitalRoute offers a portfolio designed specifically to convert raw usage data into billable items. The DigitalRoute Usage Engine™ enables companies to adopt usage-based business models. More than 400 companies use the platform for usage-based monetization, quote-to-cash automation, finance system consolidation, and telecom mediation. The platform helps businesses extract value from usage data to streamline their operations.
How does DigitalRoute leverage AI and machine learning to enhance the value derived from subscription usage data?
Analysing usage data is a prime opportunity to explore AI and machine learning for several reasons. Usage data sets are large, made up of lots of small incremental data points that only tend to make sense after aggregation. Core to our business is ensuring that usage data is well prepared for analysis, this makes it high quality and often quite diverse. Honestly, using traditional data analysis for usage data is like searching for a needle in a haystack.
Ultimately, usage data is very valuable. There is a clear connection between usage data and revenue as any usage could translate into a billing event. But this also means that any usage that is not processed leads to revenue leakage whereby a company provides a service that customers aren’t being billed for. Because of this challenge, we use machine learning to identify anomalies in usage patterns to identify revenue leakage. We can then predict problems that may arise at the end of the month billing cycle, the day sales outstanding (DSO), and forecast usage to help companies bill based on the future.
How has your diverse experience across different companies, including roles at Oracle and SAP, influenced your approach at DigitalRoute?
When I left TIBCO, a pioneer in messaging and integration, to join Oracle, the business was undergoing a shift from being a database company to becoming an application vendor through significant M&A moves. This was a very enlightening experience for me. I realised how little technology mattered in the purchase decision process. Business benefits and applications drove the technology choices, not the opposite.
That experience is something I have carried with me ever since, and it has been crucial in my journey at DigitalRoute. We strive to have the best technology on the market to process usage data, but we know that the technology is not what people buy. Business leaders buy business value. They buy ease of use; they buy peace of mind. Turning cutting-edge technology into these benefits is what drives us at DigitalRoute. We are committed to solving business problems.
You’ve also worked in many different countries. Is that at all useful in what you are currently doing at DigitalRoute?
Absolutely. DigitalRoute has nine offices around the world, and we have global customers. Over the past few years, we have heavily diversified our workforce to reflect the global nature of our customers and source the talent we need to grow. Today our engineering team is spread across three continents and includes dozens of nationalities. However, I have learned that you can’t just bring all these characters and their talents into one room and expect things to work smoothly. Businesses must blend skills, expectations, and ways of working. I’ve found that working across Asia, Europe and Silicon Valley has helped me with this.
What are the key strategies you have implemented to drive the transformation of DigitalRoute from a telco-specialist to a multi-vertical SaaS company?
The number one change to enable that pivot was within the product management team. Telco companies tend to be very large – and very demanding. Vendors selling to telecommunications companies have, in turn, become very flexible and reactive to these customers’ needs, and the products’ roadmaps are heavily tailored to solve ongoing projects’ needs. In contrast, the key to scale across multiple verticals is to look ahead, develop a product vision based on market trends and common painpoints – and pre-empt their needs. This might sound like semantics but in practice, it is a very difficult balancing exercise and one that requires a lot of discipline. You need to carve out the resources needed to deliver on the “common needs”. And until these functionalities are delivered there will be frictions and questioning of why we are spending resources on the vision vs the tactical needs. And then you deliver and you realise that your efforts are yielding far bigger dividends and benefits – for everyone!
What are the key trends you see in the subscription economy, particularly in terms of data usage and monetisation?
The flat-fee ‘all-you-can-eat’ subscription has been a great engine for growth. But it is also reaching its limits with it proving itself to be too blunt of an instrument. Consumers and businesses alike are suffering from ‘subscription fatigue’. This is because many services are offered as a subscription, no matter how little or how often it is being used. The result is that every single finance team is left with an agenda to reduce or consolidate these subscriptions.
Incorporating a usage component in pricing, either via usage-based pricing or via hybrid pricing, which involves a combination of flat-free subscriptions with a variable portion based on usage, is something that seems to resonate very well. That is with both customers and service providers as it tends to feel fairer as they don’t have to pay outrageous monthly subscriptions for things they barely use.
While the shift from simple subscriptions to usage monetisation seems obvious from a business perspective, there is a major technical hurdle. To monetise usage, you need to be able to accurately meter usage. Unfortunately, this is something most companies aren’t prepared for.
How do you think AI will shape the future of subscription-based services?
It seems that AI will speed up the transition that we encourage businesses to take at DigitalRoute. With AI, subscription companies can leverage their usage data more effectively. By analysing usage data quicker and more accurately, subscription businesses can then make more informed billing decisions. I do think it will enable more businesses to move towards either usage-based or hybrid billing models which are more transparent and conducive to business growth.
More importantly maybe, AI and more specifically the ability to interact with products through natural language, is helping us put our capabilities directly in the hands of finance teams. Finance teams can now formulate queries such as “What is the forecasted increase in usage of our service in the EMEA region for the rest of the fiscal year?” without having to go through intermediaries.
What innovative technologies are you integrating into DigitalRoute’s platform to stay ahead in the competitive market?
A common curse among engineering teams is what we call ‘the not invented here syndrome’. This is the tendency for engineers to think they can build something marginally better than what already exists. Ultimately, it’s not always possible and even if it was, it might not be worth the time to build and maintain. That’s why my team’s motto is not to reinvent the wheel, but if it exists, we use it. Our tech stack is constantly evolving, we leverage all the pre-built cloud services available to us and we regularly swap them for better ones. This keeps our tech stack fresh.
But more importantly it means we spend our development cycles where they matter, on differentiating features, unique to our goal of processing usage data. The latest technology we have added is AI including simple statistical models and more advanced large language models for machine learning, data analysis and language processing.
Can you share a success story where a client significantly improved their business outcomes using DigitalRoute’s solutions?
DigitalRoute played a crucial role in significantly improving Spectrum Reach’s business outcomes through the implementation of SAP Convergent Mediation by DigitalRoute. As part of a comprehensive SAP solution, our software addressed their challenges with manual invoicing across multiple regional accounts receivable systems.
By leveraging our combined solution, with partners, they were able to streamline their invoicing processes and offer flexible, customisable billing options. This transformation resulted in a unified accounts receivable platform that enhanced efficiency for both staff and customers. The implementation of SAP Convergent Mediation by DigitalRoute allowed them to process and track high volumes of media usage and transactional data, which in turn, supported more flexible customer billing operations.
Key outcomes included a 10% increase in billing process efficiencies, a 25% reduction in payment application time, and the ability to provide a single invoice per customer, regardless of spend type of location.
Ultimately, the result was that by using SAP Convergent Mediation by DigitalRoute, they not only enhanced their operational capabilities but also significantly improved their customer experience, setting the stage for continued growth in the competitive advertising landscape.
On LinkedIn, you mentioned that building teams is one of your passions. How do you foster innovation and ensure alignment with market demands within your engineering teams?
The basic recipe is always the same: One – find the right talents. Two – empower them and enable autonomy. Now, this is easy to say, but there’s always a bit of black magic involved when it comes to people and finding the “right” ones. One thing that is often overlooked is that “right talent” is an evolving concept depending on your company, your culture and your team’s maturity stage. The definition of the right person tomorrow is not the same as the right person today. Do you want to find someone who can evolve into that definition or consider shorter-time missions?
“Think about AI for instance. Just hiring a brilliant and impatient data scientist and dropping her in the middle of an established product team that has been together for 5 years is not exactly a recipe for success. You need to constantly devise and align the personal objectives of the candidate with the company objectives. Sometimes you even have to just disrupt everything and bootstrap a team out of nowhere – which is actually how we started with AI at DigitalRoute.
How do you see the role of DigitalRoute evolving in the next 5-10 years within the subscription economy and usage-based revenue management?
It seems that implementing a subscription model has been relatively easy for businesses. It was largely a pricing and packaging exercise. But subscription-based businesses are becoming increasingly aware of the requirement for usage data. However, before considering the opportunities that usage data presents, companies need to be able to accurately measure and report their customer’s usage. There are very few straightforward and dedicated solutions on the market. However, DigitalRoute has emerged as the leader in usage data management, a critical and must-have ingredient to successfully ride the next wave of the subscription economy: the usage economy.
Thank you for the great interview, readers who wish to learn more should visit DigitalRoute.
