Not only did the world in which Managed Service Providers operate change dramatically with the advent of cloud computing, it is impacting Software Vendors (ISVs) as well. These changes drive a similar set of demands into the PSA space supporting those businesses.
The world of writing software for small and medium business, once begun in the 1980s, also stayed quite consistent for nearly 30 years.
Software was licensed in perpetuity, often on an enterprise basis, operated on site on a server owned by the customer or in some cases leased. Support was charged initially, but could be cancelled, normally after 18 months in order to comply with US GAAP accounting rules allowing the license fee to be taken in a single lump to the P/L account. This model was cash generative and allowed ISVs to grow on the back of a positive cash curve, not needing much investment to break-out and become successful.
The systems these businesses used were siloed into CRM, Service Desk, Timesheets and Accounting as new sales were rare events and so data synchronisation could be easily done manually. Enterprise (or site) licenses don’t change much and deferred revenue is easy to manage on spreadsheets in the world of fairly static contracts. Orders were long word documents, customised (as was much of the software) for the sale. You sold in the currency of the location as customers were known and relatively local.
How the world has changed…
Gone are enterprise licenses (except in very large sales), on premise is becoming rare, software (and hardware) leasing is consigned to the past, prices have come down and user numbers can change monthly. You no longer know your customers, implementation is virtual. Very small start-up companies can go international in months without the cost of an overseas office. Professional services engagements can be short, low value engagements, quickly agreed, executed and billed. Sales campaigns are virtual, or response based from website hits.
This is a dynamic world full of fast moving parts and daily changes. Not a world suitable for isolated point solutions and manual deferred revenue adjustments. The consequences of this change are most often found in the Finance team, being larger and very busy, or local custom software managing licence compliance.
So, what is needed to optimise your Finance team in today’s cloud-computing world?
- Single customer list (maintained in one place) with rich counterparty data model plus integrated reseller business capability
- Multi-currency sales capability
- Lead integration and no-touch automation from enquiry form through to opportunity management and marketing lists
- Fully automated license management through to invoicing and deferred revenue management
- Automatic updating of the service ticket environment to reflect new and additional sales so that support is only given to customers according to their contract terms
- Clear relationships between orders, projects, service tickets, timesheets and billing without manual adjustments or multiple systems needing updating
- Ideally, a single unified data model that is largely self-maintaining based on business workflows
- Clear and continuous customer profitability reporting to support business optimisation
In the early days, systems this broad simply did not exist because the market did not need them. Today they are emerging, through the market seems slow to realise that complete business management PSA solutions exist.
The ISVs that lead the adoption race will also see their growth and margins outperform the laggards.
About the Author: Harmony Business Systems Ltd (HBS) is the company behind HarmonyPSA, the most complete cloud PSA software on the market. Developed with functionality to cater for even the most complex needs of MSPs, VARs, ISVs and Professional Services organisations, HarmonyPSA truly is the next generation of PSA systems. HBS is an independent company based in the UK. Follow HarmonyPSA on Twitter