From Enterprise to SMB: We share our experience in adapting corporate solutions for small and medium businesses with monetization using the SaaS model
After many years of work on automation projects for billing systems for large companies, we decided to develop a new market - SMB. Under the cut, we share our initial expectations, the path traveled and the results.
We are the developers of a billing system consisting of 18 modules, we have been developing our solution for 14 years (how we choose ideas for development can be read here ). Historically, from the very beginning, we worked with large telecommunication companies and performed custom-made automation. Three years ago, they decided to start working with the medium and small business segment.
Rushing headlong into the pool is not our way. In 2017, we thoroughly considered our desire to work with a mass client. Defined with products that could be commercially successful in a new market for us. We chose monetization methods. Evaluated the resources that will be needed for expansion. And most importantly, they determined goals and criteria for their success.
It turned out like this:
After the migration of our resources, we had to enter the SMB market and try to attract customers to our new services.
We started from ourselves: we transferred almost all of our infrastructure to the “cloud” located in the data center certified according to Tier III. This has given us a performance boost, the ability to scale quickly and increase reliability. Of the minuses, an increase in fixed costs is for capacity rental. They decided not to abandon the local servers completely and left the “sandbox” for some of the internal tasks of developers and testers and made a “hybrid” environment.
For a better understanding: we were not the first to work with cloud technologies. For several years, we have been transforming the on-prem service delivery model for SaaS for corporate clients. But it’s one thing to build a cloud infrastructure in the customer’s data center according to predetermined parameters and knowing the estimated load, and it’s another to prepare for the launch of a mass SaaS under your own brand.
Further, with partners, we launched two services on the market - BillingSaaS and PRMSaaS. Services were close to the functionality of the most relevant versions of our solutions for the corporate segment. They began to invest in marketing and sales, observe customers who bought a subscription and evaluate their work in services.
Small and medium-sized operators who come for a low-cost solution in SaaS set the requirements practically, the same as for large customers. The difference with large operators can only be in the size of the subscriber base and the flexibility of marketing opportunities. However, the SMB market is a lack of resources / money, and often users do not have enough experience and knowledge to master all the capabilities of speakers. It happens that small operators simply do not need wide functionality, but more often than not they simply cannot use it efficiently.
A real example: as part of demo access, we make a presentation and provide employees of a small operator access to RTM (Real Time Marketing). Employees of the operator say they will figure out the functionality on their own. After a week, we try to collect feedback and get a negative review - the system is complex, nothing is clear, nothing works for you there. We insist on training and, together with the client, go through all the stages of module setup. Under the guidance of our trainers, the operator’s employees set up and launch several new promotions and the feedback from this client changes to diametrically positive.
It also became clear that there are few marketing specialists and analysts in the SMB segment. Their functions are usually performed by line managers or company management. Marketing policy in such conditions often comes down to copying other people's experience, which seems successful. The situation is gradually changing - there is an interest in automation systems that help to maintain and increase customer loyalty, generate package offers, supplement their own products with partner services, analyze the effectiveness of marketing activities and adjust advertising offers to the “subscriber profile”. But improvements do not come quickly.
Often, under the guise of billing, fairly simple charging systems are sold. But in our world of corporate projects, billing is a complex functional complex that includes many modules. In our understanding, to meet the needs of a modern telecom operator, it is necessary to provide him with an automated payment system, and not one module that takes into account traffic. We need marketing functionality to help promote its services and monetize the subscriber base - CRM, Product Catalog, RTM, self-service portal, mobile application. Functionality that allows you to automate business processes and interaction with partners: BPM, PRM, affiliate portal. The OSS part is required, which is related to the direct servicing of subscribers on the equipment. Well, the billing itself, including tariff plans, the core tariffication, reporting, tax calculation, billing, payment acceptance.
Billing is a full-fledged back office and is designed for the work of specialists. The PRM system, unlike billing, was originally designed as a back-end for a telecom operator and a front for partners / agents / dealers. And since we do not know the qualifications of the partners' employees, we made the partners interface easier: everything looks prettier, requires more mouse clicks, but less functionality and data density (you can read my article about the trade-off between beauty and utility ).
Moreover, with PRMSaaS we moved further away from Forward PRM than BillingSaaS moved away from Forward Billing. We specially simplified the functionality.
The homework to transfer their own infrastructure to the data center was completed. We got benefits from this.
We realized that our pride - billing - is too complex a product and, according to the SaaS model, it is very difficult to promote and sell. The presence of great functionality, which is the norm for large players, suddenly for us played in the opposite direction in the SMB market. And this taking into account the fact that the needs of large and small operators in the billing functionality are almost the same! A clear gap between our perception and customer perception of the product> _ <
Our mistake is that we did not make BilligSaaS a separate product. He followed the corporate on-premise Forward Billing. In fact, we only applied a different monetization scheme for the SMB segment - payment not immediately, but over several years. Despite the fact that now more than 50 companies live in our “cloud”, it cannot be said that the project paid off and we achieved the desired result.
Stosh, we learned this lesson and decided to move towards typing processes and simplifying the interface in SaaS billing for SMB.
The first priority is to turn BillingSaaS from a clone of an enterprise solution into a convenient tool for SMB. Now we are working on creating a simple and intuitive interface that is not overloaded with functionality. Based on user behavior, we define rarely used elements and function blocks. We will turn them into extensions / options for individual clients.
We saw the potential in selling the competencies of our specialists, as consultants and outsourcers. Our specialists are well acquainted with the subject area and it is easier for a client to buy services from us for setting a tariff policy, promotional offers, barrage rates, calculating a subscriber loyalty index or identifying a group of risky subscribers who are likely to terminate a service contract. This is often cheaper than training your employees or hiring a specialist on staff.
There have been prospects for attracting customers from utilities and energy. An interesting direction is tariffication systems for marketplace backends. It is possible to expand the list of services for small operators working under an agent scheme in co-branding with large operators.
We consider for ourselves the topic of converting corporate solutions into solutions for small and medium-sized businesses rather complicated and risky in terms of labor and financial investments, but also mandatory. The market is actively moving towards SaaS. Massive SaaS solutions themselves are becoming more mature and can immediately cover 70-90% of automation needs without any modification.
If you have similar experience, share it in the comments!
We are the developers of a billing system consisting of 18 modules, we have been developing our solution for 14 years (how we choose ideas for development can be read here ). Historically, from the very beginning, we worked with large telecommunication companies and performed custom-made automation. Three years ago, they decided to start working with the medium and small business segment.
2017: developing a strategy and preparing mentally
Rushing headlong into the pool is not our way. In 2017, we thoroughly considered our desire to work with a mass client. Defined with products that could be commercially successful in a new market for us. We chose monetization methods. Evaluated the resources that will be needed for expansion. And most importantly, they determined goals and criteria for their success.
It turned out like this:
- Products - billing and partner relationship management system (PRM).
Billing as a universal mass product with great potential. - PRM, as a solution, the need for which in the market was solved for the most part with the help of surrogates. Someone used CRM, someone used their own automated automated systems (AS). It seemed to us that the mass market simply needed an affordable, specialized solution.
- Subscription access to products for the sake of lowering capital costs, increasing the availability of the solution, and lowering the entry threshold for customers.
- We work on the SaaS model with the deployment of all infrastructure in the cloud.
- In the form of immediate goals for 2018, we outlined the transfer of their work tools to the “clouds”. It would be strange if, while providing SaaS services, we ourselves would continue to use only the local laboratory.
After the migration of our resources, we had to enter the SMB market and try to attract customers to our new services.
2018: migration and launch of services for customers
We started from ourselves: we transferred almost all of our infrastructure to the “cloud” located in the data center certified according to Tier III. This has given us a performance boost, the ability to scale quickly and increase reliability. Of the minuses, an increase in fixed costs is for capacity rental. They decided not to abandon the local servers completely and left the “sandbox” for some of the internal tasks of developers and testers and made a “hybrid” environment.
For a better understanding: we were not the first to work with cloud technologies. For several years, we have been transforming the on-prem service delivery model for SaaS for corporate clients. But it’s one thing to build a cloud infrastructure in the customer’s data center according to predetermined parameters and knowing the estimated load, and it’s another to prepare for the launch of a mass SaaS under your own brand.
Further, with partners, we launched two services on the market - BillingSaaS and PRMSaaS. Services were close to the functionality of the most relevant versions of our solutions for the corporate segment. They began to invest in marketing and sales, observe customers who bought a subscription and evaluate their work in services.
Too complicated billing
Small and medium-sized operators who come for a low-cost solution in SaaS set the requirements practically, the same as for large customers. The difference with large operators can only be in the size of the subscriber base and the flexibility of marketing opportunities. However, the SMB market is a lack of resources / money, and often users do not have enough experience and knowledge to master all the capabilities of speakers. It happens that small operators simply do not need wide functionality, but more often than not they simply cannot use it efficiently.
A real example: as part of demo access, we make a presentation and provide employees of a small operator access to RTM (Real Time Marketing). Employees of the operator say they will figure out the functionality on their own. After a week, we try to collect feedback and get a negative review - the system is complex, nothing is clear, nothing works for you there. We insist on training and, together with the client, go through all the stages of module setup. Under the guidance of our trainers, the operator’s employees set up and launch several new promotions and the feedback from this client changes to diametrically positive.
It also became clear that there are few marketing specialists and analysts in the SMB segment. Their functions are usually performed by line managers or company management. Marketing policy in such conditions often comes down to copying other people's experience, which seems successful. The situation is gradually changing - there is an interest in automation systems that help to maintain and increase customer loyalty, generate package offers, supplement their own products with partner services, analyze the effectiveness of marketing activities and adjust advertising offers to the “subscriber profile”. But improvements do not come quickly.
Often, under the guise of billing, fairly simple charging systems are sold. But in our world of corporate projects, billing is a complex functional complex that includes many modules. In our understanding, to meet the needs of a modern telecom operator, it is necessary to provide him with an automated payment system, and not one module that takes into account traffic. We need marketing functionality to help promote its services and monetize the subscriber base - CRM, Product Catalog, RTM, self-service portal, mobile application. Functionality that allows you to automate business processes and interaction with partners: BPM, PRM, affiliate portal. The OSS part is required, which is related to the direct servicing of subscribers on the equipment. Well, the billing itself, including tariff plans, the core tariffication, reporting, tax calculation, billing, payment acceptance.
PRM is simpler
Billing is a full-fledged back office and is designed for the work of specialists. The PRM system, unlike billing, was originally designed as a back-end for a telecom operator and a front for partners / agents / dealers. And since we do not know the qualifications of the partners' employees, we made the partners interface easier: everything looks prettier, requires more mouse clicks, but less functionality and data density (you can read my article about the trade-off between beauty and utility ).
Moreover, with PRMSaaS we moved further away from Forward PRM than BillingSaaS moved away from Forward Billing. We specially simplified the functionality.
2018 results
The homework to transfer their own infrastructure to the data center was completed. We got benefits from this.
We realized that our pride - billing - is too complex a product and, according to the SaaS model, it is very difficult to promote and sell. The presence of great functionality, which is the norm for large players, suddenly for us played in the opposite direction in the SMB market. And this taking into account the fact that the needs of large and small operators in the billing functionality are almost the same! A clear gap between our perception and customer perception of the product> _ <
Our mistake is that we did not make BilligSaaS a separate product. He followed the corporate on-premise Forward Billing. In fact, we only applied a different monetization scheme for the SMB segment - payment not immediately, but over several years. Despite the fact that now more than 50 companies live in our “cloud”, it cannot be said that the project paid off and we achieved the desired result.
Stosh, we learned this lesson and decided to move towards typing processes and simplifying the interface in SaaS billing for SMB.
What we do in 2019
The first priority is to turn BillingSaaS from a clone of an enterprise solution into a convenient tool for SMB. Now we are working on creating a simple and intuitive interface that is not overloaded with functionality. Based on user behavior, we define rarely used elements and function blocks. We will turn them into extensions / options for individual clients.
We saw the potential in selling the competencies of our specialists, as consultants and outsourcers. Our specialists are well acquainted with the subject area and it is easier for a client to buy services from us for setting a tariff policy, promotional offers, barrage rates, calculating a subscriber loyalty index or identifying a group of risky subscribers who are likely to terminate a service contract. This is often cheaper than training your employees or hiring a specialist on staff.
There have been prospects for attracting customers from utilities and energy. An interesting direction is tariffication systems for marketplace backends. It is possible to expand the list of services for small operators working under an agent scheme in co-branding with large operators.
We consider for ourselves the topic of converting corporate solutions into solutions for small and medium-sized businesses rather complicated and risky in terms of labor and financial investments, but also mandatory. The market is actively moving towards SaaS. Massive SaaS solutions themselves are becoming more mature and can immediately cover 70-90% of automation needs without any modification.
If you have similar experience, share it in the comments!
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