Demed L’Her, CTO at DigitalRoute – Interview Series
Demed L’Her serves as the Chief Technology Officer (CTO) at DigitalRoute and is a seasoned software executive with a proven track record in enterprise software strategy. He blends a solid academic foundation with a pragmatic approach to leadership and technology.
DigitalRoute offers a comprehensive suite designed to transform raw usage data into billable items. The DigitalRoute Usage Engine™ empowers companies to adopt usage-based business models. Currently, over 400 companies leverage this platform for usage-based monetization, quote-to-cash automation, financial system consolidation, and telecom mediation. The platform helps businesses maximize the value of their usage data, streamlining their operations.
How does DigitalRoute leverage AI and machine learning to enhance the value derived from subscription usage data?
Analyzing usage data provides an excellent opportunity to apply AI and machine learning for several reasons. Usage data sets are vast, comprising numerous small, incremental data points that only reveal their true meaning after aggregation. A core focus of our business is ensuring that usage data is well-prepared for analysis, resulting in high-quality and diverse data. Traditional data analysis would be like searching for a needle in a haystack when dealing with usage data.
Ultimately, usage data is highly valuable, as it directly links to revenue—any usage event can translate into a billing event. However, this also means that unprocessed usage can lead to revenue leakage, where a company provides services that are not being billed. To address this, we use machine learning to detect anomalies in usage patterns, identifying potential revenue leakage. We can also predict issues before the month-end billing cycle, forecast usage, and improve key financial metrics like days sales outstanding (DSO).
How has your diverse experience at companies like Oracle and SAP shaped your approach at DigitalRoute?
When I moved from TIBCO, a pioneer in messaging and integration, to Oracle, the company was transitioning from a database-focused business to an application vendor through significant M&A. It was an eye-opening experience for me. I learned that technology itself is not always the deciding factor in purchase decisions—business benefits and applications drive technology choices.
That lesson has been invaluable at DigitalRoute. While we aim to have the best technology available for processing usage data, we know that business leaders aren’t just buying technology—they are buying business value, ease of use, and peace of mind. Our mission is to translate cutting-edge technology into tangible benefits that solve business problems.
You’ve worked in various countries. Has this experience been useful in your current role at DigitalRoute?
Absolutely. DigitalRoute has nine offices worldwide and a global customer base. Over the past few years, we’ve heavily diversified our workforce to reflect our global clientele and attract the talent needed for growth. Today, our engineering team spans three continents and represents dozens of nationalities. However, simply bringing together diverse talents doesn’t guarantee smooth collaboration. You must blend skills, expectations, and working styles effectively. My experiences across Asia, Europe, and Silicon Valley have been instrumental in managing this.
What strategies have you implemented to transform DigitalRoute from a telco-specialist to a multi-vertical SaaS company?
The most significant change was within our product management team. Telecommunications companies are typically large and demanding, which leads vendors to be highly flexible and reactive to their needs. Products are often tailored to address specific projects rather than broader market trends. To scale across multiple verticals, we had to shift our focus. We developed a product vision based on common pain points and market trends, anticipating customers’ future needs rather than just reacting to current ones.
This approach requires discipline and balancing resources between immediate customer needs and long-term vision. Initially, there may be friction, but once the broader vision is realized, it delivers far greater dividends for everyone.
What key trends do you see in the subscription economy, particularly regarding data usage and monetization?
The flat-fee, “all-you-can-eat” subscription model has been successful but is beginning to show its limitations. Consumers and businesses are experiencing “subscription fatigue,” as they often pay for services they use infrequently or not at all. This has led many finance teams to focus on reducing or consolidating subscriptions.
Adding a usage component to pricing, through either usage-based or hybrid pricing models, resonates well with both customers and service providers. It feels fairer, as customers only pay for what they actually use.
From a business perspective, shifting from simple subscriptions to usage-based models makes sense, but there’s a significant technical hurdle: accurately measuring usage. Unfortunately, most companies aren’t well-prepared for this.
How do you think AI will shape the future of subscription-based services?
AI will undoubtedly accelerate the transition to usage-based models that we advocate at DigitalRoute. With AI, subscription businesses can analyze usage data more quickly and accurately, leading to more informed billing decisions. This shift will enable more companies to adopt usage-based or hybrid billing models, which are more transparent and better aligned with business growth.
Moreover, AI, particularly through natural language interaction, will place powerful tools directly in the hands of finance teams. For example, finance professionals can now query systems with questions like, “What is the forecasted increase in service usage in the EMEA region for the rest of the fiscal year?” without relying on intermediaries.
What innovative technologies are you incorporating into DigitalRoute’s platform to stay competitive?
One common issue among engineering teams is what we call the “not-invented-here syndrome,” where engineers believe they can build something better than what already exists. However, it’s not always feasible or worthwhile to reinvent the wheel. At DigitalRoute, our approach is to leverage pre-built cloud services whenever possible, swapping them out for better ones as needed. This allows us to focus on what truly differentiates us—processing usage data.
Recently, we’ve integrated AI technologies, from basic statistical models to advanced large language models, for machine learning, data analysis, and natural language processing. These innovations keep our tech stack fresh and our platform competitive.
Can you share a success story where a client significantly improved their business outcomes using DigitalRoute’s solutions?
We had a significant impact on Spectrum Reach through our implementation of SAP Convergent Mediation by DigitalRoute. As part of a broader SAP solution, our software helped them streamline their invoicing process, addressing challenges related to manual invoicing across multiple regional accounts receivable systems.
Our solution enabled Spectrum Reach to offer flexible, customizable billing options, ultimately consolidating their accounts receivable platform. This transformation resulted in a 10% improvement in billing efficiency, a 25% reduction in payment application time, and the ability to issue a single invoice per customer, regardless of their location or spending type.
By using SAP Convergent Mediation by DigitalRoute, Spectrum Reach not only enhanced operational capabilities but also improved customer experience, positioning them for future growth in the competitive advertising industry.
On LinkedIn, you mentioned that team-building is one of your passions. How do you foster innovation and ensure alignment with market demands within your engineering teams?
The formula is simple: find the right talent and empower them with autonomy. However, finding the “right talent” isn’t always straightforward, as it’s an evolving concept. What constitutes the right fit for your company today might differ from what you need tomorrow.
For example, hiring a brilliant and impatient data scientist and placing her in an established product team might not lead to success. Aligning individual goals with company objectives is key, and sometimes you need to disrupt the status quo to build a new team from scratch—like we did with AI at DigitalRoute.
How do you see DigitalRoute evolving in the next 5-10 years within the subscription economy and usage-based revenue management?
Implementing a subscription model has been relatively straightforward for businesses—it’s mainly a pricing and packaging exercise. However, as subscription-based companies mature, they’re realizing the need to accurately measure and report usage. Few companies offer dedicated solutions for this challenge, but DigitalRoute has emerged as the leader in usage data management. This capability is essential for businesses to succeed in the next phase of the subscription economy: the usage economy.
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