What you need to consider on your Journey to become a Managed Service Provider
More and more High Tech companies, especially those producing IT equipment, are extending their business towards Managed Services and are becoming a Managed Service Provider (MSP). So they don’t just sell their products but offer their customers the option of a complete outsourcing of specific functions, also referred to as Solution Business. This allows designing more customized offerings that meet the clients’ needs and that drive customer satisfaction and retention. Their customers’ benefits mainly are leaner operations, a reduction in expenses and more resources to concentrate on core competencies and processes.
A well-known example for Managed Services offered by High Tech companies is the management of IT infrastructure – from physical equipment like servers or printers to databases and software applications, nowadays increasingly in the cloud.
Since buyers of technology solutions have changed their behavior, Managed Services now are the fastest growing service area, outpacing other services – like professional, technical or support services – and the pure product sales. Offering Managed Services is crucial for the future success of a B2B High Tech equipment manufacturer.
But on the way to becoming a MSP it is not sufficient to adjust the strategy and the portfolio of offered solutions. Also the organization and the business processes need to be tailored to support the new business at the best. Traditional business processes of ‘producing, selling and servicing products’ don’t fit for MSPs. Managed Services only will become a driver for sustainable profitability with underlying processes and tools that efficiently enable and support this new business model.
MSPs need a specific software solution to support the Solution Business processes. Ideally this software solution integrates seamlessly into the MSP’s existing software landscape that already supports the ‘traditional’ business processes.
Software solutions for the Solution Business need to contain the following capabilities based on the end-to-end process flow:
Define the overall modular solution portfolio, with all possible combinations of products and services and with all options for configuration and customization
Configure individual solution quotations that ideally meet the customers’ requirements and that outperform competitors
Orchestrate the solution delivery: assembly and delivery of products, performance of one-time services that are intended to make the products run: e.g. installation, implementation and the education of users
Manage the solution during its lifetime: manage and fulfil solution contracts, perform services that are intended to keep the product availability and performance on a high level: support, maintenance, updates and the supply of consumables or spare parts
Charge the solution based on the agreed conditions: typically a solution invoice is a combination of different elements, like one-time fees, time-based fees and fees that are based on the measured product usage, e.g. utilized server storage volume or number of produced printouts
Permanently monitor the solution performance and profitability: this is intended to keep customers happy and to ensure the contribution of Managed Services to the overall company profitability, but also to adjust the solution portfolio if required
SAP Solution Sales and Billing is a new add-on solution to SAP CRM, SAP Convergent Charging and SAP ERP that supports the end-to-end process for MSPs as described here. It is integrated in the SAP Billing and Revenue Innovation Management (BRIM) solution.
If you are looking for more information about SAP Solution Sales and Billing check out the BRIM page on sap.com or contact me.