Shattering the Glass House
Automation is Key
IT and Managed Service Providers need to move faster, but the absence of regimented approaches, structured processes and tools constantly hold you back. The escalating demands of new technologies and their associated business models are disrupting the marketplace and your ability to keep pace with the consumerization of information technology.
If that’s not enough there’s the ever-present pressure to increase transactional revenue, while adding new subscription-based monthly recurring revenue (MRR) to your business mix.
Oh by the way, don’t forget the need to constantly reduce costs to ensure that blended gross margin objectives are achieved.
What’s an IT Service Provider (ITSP) and MSP to do? I believe the answer is to simply Shatter the Glass House.
Shattering the Glass House means to destroy the tasks and processes that are holding you back and adopt the mindset, attitude, approaches and tools required to streamline and automate the major processes that are critical to enhancing your business functions. Especially those that affect the generation and recognition of revenue.
Where to Start
Start by identifying the 3 – 5 most visible and impactful processes and mechanisms that you believe are holding you back or are totally inefficient. I believe that if the process directly effects revenue and customer service you’re more likely to look deeply at improving it, so keep those criteria in mind when choosing what to do.
Next, you need to determine if the process chain needs to be modified or totally reconstructed to achieve your desired outcome.
Sometimes you need external help as we’re not process experts, we’re engineering and customer service experts. Plus, many times the people who own the process are typically the last people to see the flaws because they live in the forest and will be the last to raise their hand to
Shatter the Glass House.
Then, test the process to see that it truly works and streamlines the activity you were looking to improve. As in all things process-based, it’s really about the output and how many non-productive cycles can be removed prior to automation.
First, automate the process. This is vital for two (2) main reasons. First, the need to accelerate the speed at which you operate needs to increase dramatically. The cause is tied directly to the consumerization of IT (I get any app I want in seconds from a marketplace), cloud adoption and the shift to monthly subscription-based services.
Second, once a solid and efficient process is automated and the right tools are applied – your error rates and costs decrease. This translates into higher yield with fewer manual cycles.
Where to Focus
As stated earlier, I believe the perfect place to start is where revenue generation and recognition are front and center. You could certainly start with processes and activities tied to your sales force automation (SFA) and customer relationship management (CRM) platforms.
Obviously, CRM related processes can always be tightened up and automated to improve results, however, I’d like to focus and showcase two (2) other areas that I believe are seriously underserved and require more attention and improvement within most organizations based on our SaaS platform data.
Service Delivery Automation
Fundamentally, how do you take customer facing engineering activities that are mundane, complex and repetitive and automate them to increase your revenue generation velocity.
In addition to speeding up the revenue clock, updating and automating them will yield major cost advantages and the ability to perform more service iterations at the same time which gives you scale.
One example of a huge service delivery automation win is migrating Exchange to Microsoft Office 365 via a solid toolset. If you’ve performed this type of migration manually you know how tedious, error prone and time consuming it can be for you and your customer.
Talk about the perfect scenario to bring automation into your service delivery operation. A tool we know many of you use is BitTitan’s (@BitTitan) MigrationWiz – it fully automates the migration process and removes many of the risks associated with client migrations.
It’s intuitive, easy to use and operates at a much higher speed and with dramatically less errors than even your best and brightest engineer – if you’re unaware of this tool take the time to explore its power and effectiveness. Keep your eye on how they frame and approach process automation.
Additionally, BitTitan is expanding its service delivery and business automation arsenal with a new services platform called
MSPComplete. If MigrationWiz is any indication of what they’re bringing to bare in their quest to help automate delivery functions and business processes for ITSP’ and MSP’ – I believe we have a game changer coming our way.
Subscription-based Revenue Recognition and Sales Compensation Automation
The second area to focus on is backend systems and processes. The shift to cloud and monthly recurring revenue puts significant pressure on most ITSP’ and MSP’ operating models. Essentially if you've been in business for more than three (3) years your financial system can't easily or automatically deal with recurring revenue and sales compensation.
The only way to scale and handle the velocity that a growing subscription-based line of business will bring is to automate and refine your backend processes and acquire tools that replace spreadsheets and manual journal entries.
Specifically, tracking and recognizing monthly recurring revenue and the associated variable sales compensation quickly becomes an albatross.
Your success will turn you inside out unless you understand the magnitude and mechanics of what a growing monthly recurring business can bring. Once understood, automation is the only approach to truly solve the problems prior to them overwhelming your entire organization.
Just as BitTitan automates core service delivery and business processes for ITSP’ and MSP’. Linvio (@Linvio) automates payment collection, quotes and invoices, monthly revenue recognition and commission tracking and reporting via their cloud-based Sales Acceleration Platform.
Linvio is tightly integrated with Salesforce.com (@salesforce) as a bolt-on and for those of you who are Salesforce.com (SFDC) users and are beginning your journey to the look to grow your monthly subscription-based services business – it’s the solid solution that is priced right.
In fact, even if you’re not a SFDC user – Linvio can still be procured and spun-up at a low monthly cost. Not being able to count monthly recurring revenue is a major inhibitor to entering the cloud and IoT space.
What’s Next
First and foremost, it is imperative that you determine and commit to adding cloud and monthly recurring revenue to your current business model. You must be resolute in your pledge to altering your business prior to automating your business. Otherwise you’ll use valuable cycles and resources wasted without achieving your objectives.
Automation is always practical if its tied to furthering the health and efficiency of your business, however, we believe that a significant opportunity and catalyst is a must in adopting automation and driving its impact deeply into your organization.
Once you’ve committed, it’s imperative that you understand your readiness to alter your business and understand the gaps that exist so you can determine which process changes will have the highest impact and value.
We think we picked two (2) great examples of focus areas – increasing service velocity and scale is always a winner + if you can’t track monthly recurring revenue and pay your sales professionals for their contribution – life sucks and you don’t grow…
Remember there are dozens of potential areas to assess, but it all starts by making the conscious decision to Shatter the Glass House and progress beyond your self-imposed process restraints…
Stay Calm and Automate On… progress beyonsedprocess restraints…
Stay Calm and Automate On…
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