By Evan Rice, Rev.io
There was a time when IT MSPs were simply outsourced desktop and network support. As internal networks have integrated with internet-based cloud services, IT MSPs are increasingly called on to manage these connections and all the new functions they enable.
This means much more complex engagements with clients which, in turn, means more complex billing and administration. These complexities will only increase in the years ahead. As complexity and velocity increase, so does the need for automation of routine tasks. Every MSP riding this new wave of demand will need to look at what this means for their back-office infrastructure.
Here we look ahead at how the new MSP landscape is taking shape and how MSPs can manage such a business effectively and profitably.
The biggest change already underway is in the expanded delivery of unified communication as a service (UCaaS). Unlike a monthly retainer for support services or a contracted price for equipment and installation, the charges for services like VoIP or chat functions can and do vary from month to month. The associated taxes not only vary with the charges but also change regularly with changes in the law. Specific to telephony, there can be more tax codes than there are zip codes in an MSP’s service area. This is a level of financial complexity unlike anything most MSPs have ever faced.
Network and data security is another huge growth sector. However, with more attention being paid by the government to how network infrastructure is leveraged, there will likely be even more regulations to be followed. State and Federal regulations are being quickly adapted to the evolving threat environment. MSP customers will increasingly count on their providers to keep them compliant. That means proactive management which may change with the laws.
The continuing adoption of remote and distributed workforces will add another layer of complexity. This already means an expanding range of endpoints under management, each drawing on the company’s inventory of networked services. Clients will inevitably need an auditable source of truth for which employees are using which systems. This also will require MSPs to support their customers with systems that enable consistent service delivery, continuity in the event of staff turnover, and ease of cost capture to assure profitable operations.
IoT solutions management is yet another burgeoning area. MSPs are increasingly being asked to manage network-attached access controls, surveillance systems, thermostats, and even lighting controls. While some of this management is relatively easy to bill as retained services, some will vary by headcount, the number of locations, and other variables.
Never The Same Bill Twice
As these cloud-based services come online—and as MSPs are called on to deliver them—the cost structure and billing processes for them will get more complex. And while none may be as complex as telecom (and its attendant taxes), any one customer may make use of many such services. This can put a real strain on MSP billing operations.
Many MSPs have tried to adapt their subscription billing operations to accommodate these new challenges. Smaller operations with relatively few customers may be able to work this way for a while longer. But they may also just be pushing out the date on which the challenges do real harm to their business.
The complexity of variable billing can sometimes cause billing errors that result in lost revenue and profit. If those errors are baked into accounts, those losses will recur every month. This makes the case for automating the back office as much as possible.
Tomorrow Is Coming Fast; Be Ready Today
Traditionally, automation has been seen as a path to greater efficiency and time savings. That is certainly the case for functions like managing account service records and billing. But the real significance of back-office automation for MSPs is in quality assurance amidst increasing complexity. Without automating recurring tasks, MSPs will find themselves either failing to deliver or failing to accurately charge for what is required.
Here, involvement with telecom services can help with operations. Automated billing systems designed for the complexity of telecom services lend themselves to variable rate and usage-based billing of all kinds. These platforms are designed to be integrated with the cloud services that MSPs provide, so the usages and applicable rates can be applied automatically. This is critical for telecom tax compliance. But it is also a huge relief for overworked billing departments.
With a solid grasp of these new revenue streams and automated tools to capture that revenue, MSPs can drive sustainable, impressive growth through their business. That will make for a very bright future.
About The Author
Evan Rice is EVP of Sales & Marketing at Rev.io.