Some of these key new subscription metrics include: ARR (Annual Recurring Revenue) – ARR shows the money that comes in every year for the life of a contract, allowing for predictability of revenue. It’s a good measurement of the health of a business. Churn rate – Also called attrition rate, churn rate is a measurement of churn, i.e. subscriber turnover. Churn rate is the rate at which a business loses subscribers. CLV (Customer Lifetime Value) – Customer lifetime value estimates the total value of a customer over the course of its lifetime, calculating for both revenue and cost. CLV sees subscribers as assets and is a useful tool in managing and focusing on maintaining long-term subscriber relationships. ARPU (average revenue per user) – The ARPU measures the revenue of an individual subscriber as calculated by taking total revenue for a defined time period and dividing that revenue by the total number of subscribers during that time period. The ARPU is valuable for providing a per user view of revenue. Growth Efficiency Index – The cost of growth is measured by the growth efficiency index (GEI), which is the sales, marketing, and onboarding costs that are required to earn $1 in additional annual recurring revenue (ARR). These metrics are critical to steer, assess, and communicate the value of a recurring business. In a nutshell, businesses offering subscriptions live and die by these metrics! But producing those metrics from the traditional architecture that manufacturing companies are run on is a no go. While ERPs were sufficient to report GAAP metrics, they can’t automatically calculate these new dynamic metrics that continuously need to be recalculated. As a result, producing those metrics from legacy architecture will require manual calculations, Excel spreadsheets, and other insufficient, inefficient, and error-prone workarounds that lead to incorrect KPIs, uninformed decisions, additional costs, and a bottleneck to tackling scale.