Contract renewal is critical to maintaining a company’s recurring revenue source. Therefore, there is a significant emphasis on setting up an efficient process for renewal. In this study, a machine...

An integrated approach to renew software contract using machine learning.

Context The software industry has changed significantly in the 21st century; no longer is it dominated by organizations seeking to sell products directly to customers, instead most multinational organizations nowadays provide services via licensing agreements. These licenses are for a fixed-duration; and hence, the question of their renewal becomes of paramount importance for the selling organization’s revenue. Objective Despite its financial impact, the topic of license renewal strategies, processes, tools, and support receives very limited attention in the research literature. Hence, it is believed that an interesting research question is: What is the state of current industrial practice in this essential field? Method To initially explore the topic of license renewals, this paper implements the Grounded theory method. To implement the method, semi-structured, cross-sectional, anonymous, selfreported interviews are carried out with 20 professionals from multiple organizations, later the Constant Comparative Method is used to analyse the collected data. Results This paper presents a synthesized picture of the current industrial practice of the end-to-end software license renewal process. Alongside, it also identifies a set of challenges and risk factors that impact on renewal decisions of customers, hence on the overall revenue of seller organizations. Finally, using structured brainstorming techniques, this paper identifies 11 future research directions, that can help organizations with the mitigation of the risks in the license renewal process. Conclusion It is concluded that lack of effective communication among stakeholders, the absence of customer trust, and scarcity of value generated from purchased licenses are among the primary drivers that influence renewal decisions. Also, there is a need to invest in intelligent automation along with artificial intelligence enabled analytics in order to enhance customer satisfaction.

The current state of software license renewals in the I.T. industry

In competitive telecommunication environment, it is imperative to maintain an effective customer retention strategy even while mobile service operators attracting new customers. Not only acquiring new customers costly process, but successful customer retention helps build brand loyalty and good business reputation. Motivated by real mobile service operator data set, we designed and proposed a solution to employ survival analysis technique that estimates customers’ survivals and hazards. We aim to examine the impact of: campaign, tariff, tenure, age, auto-payment on survival times and hazards. After hazard ratios and survival experiences determined for each predictor, results enable mobile service operator to target the right customers to incentivize so that they can stay with their current operator. Proactive actions triggered by the results of the survival model is key to customer retention.

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Applying Survival Analysis to Telecom Churn Data

A key issue for B2B industrial firms is to better understand the drivers of customer value and contract renewal decisions, due to the long-term supplier-customer relationships. When the B2B firm is operating across national boundaries, there is added complexity to the renewal decision, because the drivers are also influenced by cultural considerations. The purpose of this paper is to examine the main drivers of customer value creation and contract renewal intentions, for a large B2B firm operating in both the USA and Japan and compare the two data sets.,The company, which provided the data for the study, is a US Fortune 100 firm in the facilities management industry, operating worldwide. Data were collected using a survey questionnaire from a sample of the firm’s customers in two of its largest markets, the USA and Japan. The authors used PLS to analyze the data, and compare and contrast the drivers.,The findings highlight both similarities and differences across the two countries for the most influential drivers of customer value and contract renewal. Although no differences were found when examining the effect of relational drivers on contract renewal, differences were observed for utilitarian drivers: product quality and price.,The authors expected the relational drivers of contract renewal to be stronger in the high-context culture of Japan, but found that there were no differences with the US market. While relational drivers are important in the decision-making process in both countries, it seems that managers should focus more on price considerations in Japan. In contrast, product quality is relatively more important in the USA, when negotiating contract renewals with customers.,Noticeably absent from the B2B services literature is its application to international markets. In particular, research is lacking on the specific drivers of customer value and contract renewal intentions in the USA and Japan, despite the importance of long-term on-going contractual relationships in these markets. This study has provided additional insights into the complex world of contract renewal between international buyers and sellers of large industrial systems.

An integrated approach to renew software contract using machine learning.

References

The current state of software license renewals in the I.T. industry

Applying Survival Analysis to Telecom Churn Data

Drivers of contract renewal in international B2B services: a firm-level analysis

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