The big bang is on. There are thousands of UCaaS, VoIP, Cloud and Managed Service Providers in the U.S. — far more than traditional telcos, cable cos, CLECs, and wireless carriers combined. Research firm MarketsandMarkets projects the market will grow to around $25B in revenues by 2024.
A Fast Growing, But Hyper Competitive Market
What is driving these numbers? To begin with, it’s now very easy to enter the market. Ten years ago, a would-be service provider had to have significant technical networking expertise and make a substantial upfront investment in network infrastructure. But now, everything is scalable and available via a platform. You can launch a viable business with relatively little capital and few customers.
Second, there are 30 million small businesses in the U.S. The majority still rely on a traditional telco or cable company for their network services, making them targets for UC firms and next generation service providers.
But these factors also pose challenges. If it’s easy to enter the market, that means competition is intense. And telcos do not give up their best customers without a fight. There will always be someone out there with a better promotional offer or a lower price.
The “Back-Office”: What It Is and Why It’s Critical
The front-office is the customer facing side of the business – where marketing, sales, product and customer service live. The back-office, much less glamorous, is the foundation or “spine” of a UC provider’s operations – where sales efforts are converted into profitability.
In our experience, the key components of a service provider’s back-office include:
- Vendor Quote Management: How a service provider obtains price quotes from carriers for wholesale network services (e.g. access, IP transport, cross connects, etc) that are resold to the service provider’s end-user customer
- Provisioning / Order Management: How a service provider creates and tracks orders for network services through to activation
- Network Inventory Management: How a service provider tracks status of “in use” network services and ensures proper billing for them
- Invoice Management: How a service provider ensures it is being billed properly, disputes charges, benchmarks and reduces costs
- Vendor Contract Management: How a service provider ensures vendor compliance, contract competitiveness
- Usage Management: How a service provider manages and optimises utilisation of network assets
- Reporting and Analytics: How a service provider generates actionable data and performance dashboards
Needed: Digital Transformation of Back Office Systems and Processes
For UCaaS providers, cloud-based service providers, MSPs, and VoIP carriers, the “back office” is often an Achilles heel for the entire organisation. These companies often have impressive, fully digitised front offices, with sophisticated online lead generation, integration with social media, and automated marketing capabilities. But in the back office, they rely on emails, texts and spreadsheets. And as they grow, they find that the back office is holding them back, diminishing their responsiveness to customers and adding hidden costs their bottom line.
The irony is that even as they are helping their end-user customers be more productive through Unified Communications, hosted VoIP PBX, or cloud-based services, etc., – they often have not realised the full benefits of digital transformation of their back office.
New Software Makes Digital Transformation Affordable
One reason many service providers rely on email and spreadsheets is they are – on the face of it – “free”. Meanwhile, many traditional back office or “operating support system” (OSS) software solutions were designed for big telcos and carriers and are prohibitively expensive to buy, implement and maintain.
But now, with the advent of more robust SaaS applications, next generation service providers have more options. There are now lightweight, scalable, easy to implement back office software applications that are highly affordable. For the cost of a good CRM or marketing automation software solution, a service provider can dramatically improve their operating margins, customer service and internal productivity.
The bottom line: there’s no excuse for UC firms and other service providers not to invest in their back-office. It’s an easy way to ensure a solid foundation for profitable growth and customer satisfaction.
Guest Blog by Chris Lee, Founder and CEO, Cloud Age Solutions
Chris Lee is Founder and Chief Executive Officer of Cloud Age Solutions. He has over 20 years experience building successful companies in the telecommunications, networking and software industries. An expert in network design, cost management and optimisation, Chris worked for MCI, Teleglobe and CBS before co-founding Broadmargin, Inc. Broadmargin grew to become the largest Telecom Expense Management (TEM) firm in the service provider market, managing over $8 billion of telecom cost annually. In 2014, Chris launched Cloud Age Solutions, with the vision of helping enterprises and service providers achieve transformational improvements in productivity and customer responsiveness.
