Delivering IT as a Service from 2% of revenue
The cloud has arrived and brought with it a host of business growth opportunities for small and mid-size businesses like never before.
Over the past 12 months, the team at SMBCloud Services have leveraged the cloud and delivered IT as a Service to a host of customers.
McKinsey Strategy on Cloud Services
Parts of the strategy that the team followed were published by McKinsey in 2014 aptly titled 'Big business in small business: Cloud services for SMBs' by Julie Avrane-Chopard, Thomas Bourgault, Abhijit Dubey and Lohini Moodley
What followed was a combination of this strategy, inputs from small business owners, working with Microsoft, Salesforce.com channel team, other cloud service providers and the past experience the team had at successfully managing transformation projects - to produce a working model.
The end of this collaborative exercise is an assortment of IT and cloud services, working in harmony, delivered as a monthly subscription service to 'RUN' the business at ~2% of total annual revenue.
IT as a Service: Go for Growth
At the outset, the team made it clear to the business owners that if they expect to see radical improvements, they should be equally willing to accept radical changes in the way Technology is used by their employees and partners. Customers loved the change as it brought them closer to their daily digital experiences.
The message to sponsors was simple, "You cannot expect different results by doing the same things".
The sponsors agreed and the journey began - Today, SMB owners are glad they took those decisions as they not only compete with the bigger players in the field but also lead the competition in their segment.
Platform to deliver IT as a Service
Cloud aggregation and broker services have now matured to provide stable platforms. These platforms monitor, meter, provision, maintain and support services to every part of the Business in a connected manner.
Be it Sales, Marketing, Operations, Customer Service, Field Service, HR or Finance - these platforms deliver measurable services in a predictable manner at a predictable cost.
The SMBCloud team developed options to use one of many platforms available today:
- Microsoft Cloud platform
- Force.com platform
- A custom cloud platform
Interestingly, the customers showed very little preference for the platform itself. What they were interested in was the transition of their legacy services to cloud and how this change could be brought about with minimal or no impact on their revenue stream.
It was all about Understanding their Business, Change Management, Delivery Assurance and Project Management.
Business Change: from Legacy to Modern Biz
As part of this transformation journey, the SMBCloud team addressed business functions and challenges as outlined below:
- Customer Interface: Web and Mobile experience was at the forefront of this change. A device and OS independent web and mobile interface was developed that was able to immediately connect to the legacy back-end systems and allowed the project teams to upgrade these legacy systems without disrupting the business.
- Payments and Channels interface: As the customer went digital, new interaction channels opened up and payment gateways were integrated between the cutomer and back office systems. New channels went straight to the cloud platform and the process of modernization kicked in true earnest.
- Business Change: This was the most difficult part and something that the SMBCloud team had not been warned about by any of the Cloud Service Providers. The technology was sold as being ready in days not weeks but the effort to make this change from legacy to cloud was hugely under estimated. Had it not been for the Business Support team on the ground, the results would not have been favorable.
- A Transformation Project: The SMBCloud team worked closely with Cloud Service Providers and the customer to align service on-boarding with business training and adoption timelines.
Technology change: from Legacy to Cloud
Several key business processes were completely overhauled with the adoption of a new cloud based approach
- Website overhaul - Any device, any OS, access anytime from anywhere approach.
- Payment gateway - accept cash, phone payment, online and card transactions
- Digital Marketing - promote brand, products and services on traditional search and social media platforms
- Collaboration - Get everyone on the same page with office applications and voice, data sharing tools.
- Backup & Security - Securely access data through a VPN from anywhere and deploy a private cloud for backing up sensitive data
- API's for Voice and Location services, Cloud PBX and Geo data mapping
- CRM & ERP - Building a seamless customer experience and maximising cross and up-sell opportunities by integrating all front and back office operations.
- Custom applications - Porting or complete custom development on Azure, AWS
Continuous Improvement and Business Support
The most important aspect of our engagement is the support that our customers receive long after the initial deployment is over. Our engagement is like a partnership where we act as an external consultant bringing our Industry wide experience to our customers and sharing new and better business practices with them.
The SMBCloud team provides enhancements, business support and strives to improve business revenues. Why? Because we grow when our customers grow. Our model is simple - we charge ~2% of the business revenue and therefore become invested in our customers' business. Their success is our success.
2% of revenue for IT as a Service?
This is the optimal pricing point that meets 80% of small to mid-size business owners' requirements. The pool of SMBCloud consultants manage multiple clients where each is responsible for the success of their clients. By sharing our best resources, we are able to pass on the savings directly to our clients.
Likewise, most of our clients find it very difficult to retain qualified consultants and short term hires are just not affordable.
Therefore, a ~2% of revenue model is a WIN-WIN situation for everyone. It is ~$800 pm on a $500K annual revenue.
A customer with $2m in revenues with around 5 employees finds it very appealing to lock down and cap their monthly 'RUN' costs at around $3,250 per month. This allows them to put their focus back on what matters most - Grow their Business.