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Red Hat Adopts Digital Business Strategies to Drive New Efficiencies in Quote-to-Cash

Enabling its sales and support channels to more efficiently support its customers by streamlining the process to increase deal flow for standard transactions while addressing non-standard requests for Red Hat’s most important, profitable clients


The Challenge

The technology industry is constantly evolving. Red Hat, an open source technology software and services company, is facing new challenges. As traditional markets and technology become more volatile and uncertainty in the market grows, the company must respond faster than ever before to stay competitive. Meanwhile, competition intensifies as traditional responses to those changes become less effective. To stay relevant in the marketplace, Red Hat turned to CPQ and CLM, as the key pillars of its digital transformation to bring its Quote-to-Cash process to a new level of efficiency and revenue growth.

In particular, Red Hat’s current repository landscape was a mix of unconnected share drives and rudimentary applications for NDA, Enterprise, and Partner agreements.  This introduces Red Hat to several current state issues such as:

  •       Limited to no contract visibility or data sharing;
  •       Multiple sources of truth leading to redundancy and inability to search and report; and
  •       Lack of monitoring functions warning customer relationship owners of contractual events

Our Solution

Red Hat developed a digital strategy and roadmap to streamline its Operations for Quote-to-Cash involving multiple business functions working jointly such as Sales, Bid Desk, Sales Ops, Legal, Finance and IT. Technology operates in Red Hat’s fastest-changing market, and is under intense competitive pressure. The division established an agile center-of-excellence of digital solutions, introduced a new governance framework (model and process) for adopting a holistic, integrated approach to its digital sales transformation.

Mainspring and the Red Hat teams worked together to establish the Future State and Roadmap of its contracting function in support of its streamlined Quote-to-Cash strategy leading to the selection, requirements, design, configuration and deployment of a best-of-breed CLM solution that integrates with its CPQ solution. This included the extraction, cleansing and migration of metadata for over 100,000 contracts into a new, centralized CLM Repository.  Collaborating with Red Hat’s digital core project team and stakeholders from cross-functional groups during the implementation process, Mainspring supported the organizational change management, communication planning and functional end user training to ensure that these new management practices and operating models were widely understood, adopted and embraced.

Red Hat implemented end-to-end integration of its Quote-to-Cash process, enabling optimization of:

  • End-to-end sales, legal, finance and technology operations
  • Fast integration of new clients, products and services
  • Rapid adaptation to changing market and production conditions

The Results

Red Hat is already reaping the rewards of digital transformation. The Center-of-Excellence team are continually optimizing the Quote-to-Cash process using:

Data collection and visualization
Project management tools
Predictive and prescriptive analytics

This collaborative, data-led approach to sales and contracting is generating vast improvements for Red Hat, including:

Increase in the volume of deals executed
Reduction in non-standard transactions and corresponding agreements requiring legal review or escalation
Reduction in average cycle times, particularly for standard transactions
Reduction in the number of contract templates to manage
Reduction in administrative tasks and elimination of manual data entry in completing contract changes, i.e., amendments and change orders
Improved visibility of current contractual obligations and upcoming renewals

Red Hat continues to be innovative to stay competitive for the future.

Red Hat has transitioned from an enterprise leveraging traditional business practices into an agile digital company that will continue to stay open to innovation and is positioned to stay competitive for the future.