Dec 22, 2019
CFOTL: What metrics are top of mind for you?
ERTEL: Largely defined, most of Vizient's revenue is—I'm going to
put it in air quotes—"subscription-oriented." Some of it is literal
subscriptions, whether SaaS or other offerings, but much of it is
driven by multiyear contracts that operate as subscription
services, such as for clinical data or for a group purchasing
organization. While on the one hand this provides great visibility
on future revenue, the challenge with these types of organizations
is to not just sit back and rest on your laurels. What offerings
enhancements do you put forward to really take advantage of the
built-in stickiness that you have because it's either a contract or
a subscription that serves as a contract? How do you really enhance
something so that you're providing value to those customers on an
ongoing basis by improving the offerings?
That's a good starting point, but it doesn't change the dynamic of
the fact that you have to be out there every day as a company,
whether you're on the back office or CFO side of the equation or
you're out with customers. I think that it's an important point for
a company like this to understand and rise to that challenge. As
far as metrics go, it's revenue per customer, it's margin per
customer, it's overall EBITDA margin when you look at financial
statistics, but then it's also member retention. That's not
literally measured every single day, but certainly it's something
that's looked at month by month. How many of our customers do we
retain? Another metric is new business, what our market share is,
and so forth. So, there are probably 10 to 12 metrics
altogether.