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Hypergrowth is experiencing rapid, exponential business growth at a Compound Annual Growth rate (CAGR) of 40% or higher. Achieving hypergrowth can be a dream come true for most businesses including Microsoft CSPs. To be a hypergrowth company, an organization needs to prioritize the adoption of modern technologies that can solve workflow complexities. CSP billing automation can help transform the organization to achieve and manage hypergrowth. As a Microsoft CSP, it is your responsibility to provide billing support to your customers and ensure timely payments to Microsoft, along with a suite of solutions and not just products. This becomes even more challenging when you have to manage the billing of a large customer base manually.
Challenges to hypergrowth for Microsoft CSPs
A CSP business faces numerous bottlenecks and challenges in the hypergrowth phase. Some of the challenges CSPs face are as follows-
Limited resources
Sustaining hypergrowth requires a lot of resources which include people, technology, and funds. Most organizations have limited resources and during the hypergrowth phase, these limited resources have to be distributed amongst different needs of the business such as product development, sales, marketing, customer service, etc. While allocating the resources, one or the other business functions might get neglected.
Revenue leakages
High-growth CSPs are at risk of revenue leakages. These small losses over a period of time can result in a huge dent in the company’s bottom line. These leakages often go undetected as most CSPs do not have the proper tools and mechanisms to identify and control the leakages. One of the most common reasons for revenue leakage is missed or inaccurate billing. When the business is growing at an explosive pace, the absence of a CSP billing automation tool leads to data entry errors, missed or delayed invoicing, inability to handle varied pricing and billing cycles, etc.
Inability to scale
Hypergrowth leads to explosive growth in customer numbers and higher profit margins. This makes the situation and business scenario ripe for scale. Invariably, hypergrowth depends upon the ability of CSPs to scale their business and sustain it. However, reliance on manual processes and modes of functioning makes it difficult for CSPs to scale. Manually managing the subscriptions and billing of customers spread over different geographies limits the amount of business a CSP can successfully manage. Furthermore, the tech debt accumulates and the CSPs are unable to scale the business leading to stunted growth.
Lack of customer focus
Customer success is crucial for hypergrowth. In the race of growing the business, CSPs can lose focus on the most important aspect of business growth, the customer. Without customers, there is no business. Hypergrowth brings in a large number of customers with continuously evolving business needs and expectations. Lack of focus on the customer needs, priorities, and values can lead to customer churn. While managing a hypergrowth business, providing a personalized and quality customer experience becomes difficult without adopting automation. Inability to meet customer expectations and decreased levels of customer service can derail the hypergrowth journey.
Inability to capture the big picture
In their attempt to grow, most CSPs adopt a myopic view of cutting costs and focusing only on immediate returns. Invariably, attention is skewed against long time investments like marketing, automation, etc. which can impact the big picture. Focusing only on short term gains may help CSPs sustain their business, however, this renders them unable to scale.
Achieve hypergrowth in 7 steps with CSP billing automation
As a CSP, you need to automate financial processes such as billing to achieve and sustain hypergrowth. CSP billing automation allows you to focus on maximizing revenue without having to worry about the billing system’s ability to handle a high volume of transactions. Here are 7 steps to accelerate business growth with CSP billing automation.
Scale business systems
A sudden increased volume of transactions requires a business to scale its processes. Manual processes are unable to scale. There are several aspects at play here. One, the number of customers shows an upward trend, which if you try to serve manually, you will need an exponential growth in your HR capabilities. Two, there can be different types of pricing models for different customers such as license-based pricing, usage-based pricing, tiered pricing, or one-time pricing. Managing these varied pricing models for multiple Microsoft products manually can be overwhelming. CSP billing automation provides a scalable billing infrastructure. This will allow you to serve a large customer base, expand your portfolio, improve cash flow, and reduce the Go-To-Market time for new products.
Allocate resources effectively
CSP billing automation reduces manual work and frees up human resources for other activities that can add value to the business as well as helps curtail costs. You will have to hire fewer people in the finance department to manage the invoicing and payments lowering your overheads. Attracting and retaining talent can be difficult at times and in the absence of automation, the loss of a few employees can severely affect the operations. The reduced burden of doing repetitive, manual tasks on your staff will increase their productivity and increase retention. The money saved on labor costs due to automation can be invested in other business activities essential for hypergrowth.
Evaluate market demand for solution
CSP billing automation tools can collect and analyze key metrics like sales numbers and revenue generated by different Microsoft products as well as value add-ons offered. This data can help you understand and evaluate the market demand for a solution. Depending upon how much a product is selling and the revenue being generated, you can take a call on continuing selling it or focusing on selling more lucrative products. The data on the market demand for different products can also be leveraged by the sales and marketing teams in developing their strategies. These reporting capabilities can also help predict future trends and assist the product team in developing in-demand solutions.
Reduce business risks
CSP billing automation reduces business risks by eliminating manual errors. Manual errors in invoicing not only have an immediate impact on the revenue but also have long-term costs associated with them. Such errors can damage your company’s reputation and increase customer churn. Automating the billing process can also help in detecting and minimizing revenue leakages. Error-free invoicing leads to faster and more timely payments. CSP billing automation tools come with features such as automated payment retries and payment reminders which reduce the chances of payment defaults. This helps streamline payments and regulate your business cash flow. Furthermore, the right CSP billing automation platform can help you with automatic usage reconciliation for each customer, considerably reducing your reliance on the partner center.
Manage cash flow strategically
Strategic management of cash flow requires CSPs to maintain timely and accurate billing. Billing automation allows the finance team to accurately project cash flows. Key metrics such as past billing trends and payment behaviors can assist the finance team to predict the expected revenue. In a subscription-based business, where the customer has the power to cancel, pause, upgrade, or downgrade their subscription at any time, revenue recognition by manual processes can be a nightmare. CSP billing automation tools track the actual revenue that is received and helps in accurate revenue forecasting. The finance team can leverage this data to make better decisions related to earmarking funds for different business expenses and long-term business goals.
Promote customer-centricity
Having deep insights into customer buying behavior can help provide a better customer experience. Based on the consumption patterns, you can market products to the customers that suit their needs and preferences. An accurate billing experience increases the trust the customers have in your company. CSP billing automation enables you to allow customers to track and manage their payments themselves leading to more transparency and ease as compared to manual billing. Having more control improves the buying experience of the customers. Automated payments also provide customers the flexibility of using different payment options.
Explore pricing innovation
Finding the correct pricing for your business can be a challenging task, with a billing automation tool, you can experiment with different pricing strategies. Continuous price optimization can fuel business growth. Having data on how much customers are willing to spend on different products can help in deciding the correct price. Apart from this, CSP billing automation allows you to run time-bound promotions and offer account-based discounts. Customer insights can help you decide on how many pricings plans you want to offer your customers.
CSP billing automation with C3
As a leading CSP billing automation platform, C3 can help CSPs effectively automate their billing systems and accelerate business growth. There are several benefits of partnering with C3:
- Ensure error-free invoicing- Generate and manage invoices of thousands of customers accurately and efficiently with a limited headcount.
- Prevent revenue leakage- Ensure that no invoice is missed or sent after the payment cycle for your customers to realize all revenue in time.
- Automated usage reconciliation- Leverage our automated usage reconciliation capabilities and reduce your reliance on the partner center to ensure correct billing.
- Augment data visibility- Provide the decision-makers with real-time data to build business intelligence and strengthen financial controls.
- Reduce customer churn- Improve customer experience by offering custom discounts, transparent billing, seamless integrations, and access to self-service features.
To know more about how CSP billing automation can help you scale your business for hypergrowth and how C3 can play the role of an enabler to facilitate the same, book a free product demo today!
