OFFERING MANAGED INFRASTRUCTURE SERVICES used to set you apart. These days, it feels like everyone’s doing it. And if you’re one of the MSPs suffering the effects of that trend, Craig West (pictured) has three things he wants you to know:
- Commoditization kills margins.
- Complexity kills commoditization.
- ERP is undeniably complex.
“That’s a message we’ve been taking to that community for probably the better part of 10 years,” says West, vice president of alliances and channels for NetSuite, the cloud ERP pioneer founded in 1998 and acquired by Oracle 18 years later. Selling and supporting business solutions like NetSuite’s, he contends, can be a powerful way to escape the commoditization trap triggered by the flood of MSPs entering the SMB market.
Better yet, it can deliver generous profits. “We’re talking about margins that can be anywhere from 32 to as much as 50%, as opposed to a couple of points on hardware or other services,” West says. There’s even more money to be made on data conversion, training, business process optimization, and other services.
“We see the services attach rate anywhere between 1x to 3x of the annual subscription value,” West states. Those revenues are recurring, moreover, because customers never lose their need for ERP assistance. “Their businesses grow, their leadership team changes, their executive team changes, their businesses get disrupted,” he notes.
Still, adding an ERP practice isn’t a quick—or cheap—process. “If the idea is, ‘let’s hire a salesperson and one or two consultants and see if it works,’ it won’t,” West says. “It’s a big investment.”
In particular, he continues, you’re going to need employees who know ERP software thoroughly and can communicate effectively with the nontechnical decision makers who typically green-light business application purchases. “That salesperson and/or that consulting team needs to be credible and have the domain expertise that resonates within the line of business,” West says.
Portfolio Makes It Easier
NetSuite’s SuiteSuccess portfolio is designed to make entering the ERP market easier for channel pros still cultivating that expertise. Introduced early in 2017 and tailored to the needs of specific verticals, SuiteSuccess products are preconfigured to comply with best practices identified by NetSuite’s professional services team during thousands of hours of client engagements.
“If you’re a wholesale distributor and you subscribe to the NetSuite wholesale SuiteSuccess edition, instead of signing in and seeing an empty account that required consultants to do a lot of setup work from the beginning, that account is now prepopulated with dashboards and KPIs and underlying workflows so that a lot of the heavy lifting is now done,” West says. “We’ve seen that be a great enabler for folks who are really seasoned business consultants but not so much ERP consultants.”