IT and Business Insights for SMB Solution Providers

Profit Fuel, Part 2: CRM/ERP Services

Here’s how MSPs and integrators can get in on skyrocketing opportunity and high margins while positioning their businesses for the future. By Colleen Frye
Reader ROI: 
ERP/CRM VENDORS like Salesforce and Microsoft are looking to add partners rapidly to keep up with demand.
MSPs AND INTEGRATORS can get in on the action by shifting their mindset from infrastructure to business solutions.
GAINING BUSINESS PROCESS KNOWLEDGE, project management expertise, and “soft skills” for working with customers is key.
BUILD RELATIONSHIPS with marketing and sales executives and recognize this is not a “speeds and feeds” sell.

RUN, DON’T WALK, to get in front of line of business executives, says Forrester principal analyst Jay McBain. The markets for CRM and ERP solutions “are growing exceptionally fast,” he notes, adding that vendors like Salesforce and Microsoft are looking to add hundreds of thousands of new partners over the next few years. Managed service providers, facing tighter and tighter margins providing infrastructure services, should tap into that action by building new business solution practices.

“There are people making 75% margins, flooding into the CRM space,” McBain says.

And the opportunity doesn’t just stop there. “People are learning that for every dollar a customer spends with CRM, they spend over four dollars on downstream software and services,” McBain explains.

Vision33, an SAP channel partner and reseller of the Business One ERP solution for SMBs, has witnessed that dynamic firsthand. “The average customer might have four add-ons in addition to SAP Business One,” says Carl Lewis, chief SAP Business One ambassador.

Gene Marks, The Marks Group

Philadelphia-based business consultancy The Marks Group sells several CRM and accounting solutions but derives most of its income from services. His firm implements and sets up security for the applications, customizes fields, “and then we will integrate other applications—whether it's accounting or budget management or HR systems—[and] import data from other places,” says President Gene Marks. “Then we’ll train, train, train.” His firm also works with customers to recommend and configure workflows, as well as leverage analytics and reporting “so that people are getting data out of the system that’s accurate.”

Salesforce, for its part, helpfully directs partners to the services customers are looking for, McBain says. These include installation, implementation, integration, configuration, customization, security, compliance, business continuity, and more. “The average demand for these services is six months ahead of supply. So Salesforce is being gated to their growth by not having enough Salesforce-certified, good people out there. The average customer has to wait six months to do these CRM customizations.”

New Skills Required

It’s a golden opportunity, but it’s also a paradigm shift for MSPs and IT integrators, “particularly if they came up from the infrastructure side,” says Eric Casazza, CEO of New York-based FMT Consultants, which provides integrated solutions around three major ecosystems: Microsoft, Salesforce, and Oracle Netsuite. In addition to understanding the business solution, MSPs will need business process expertise, he says.

“Certainly in ERP, a background in accounting is very helpful,” says Casazza. “So much of what happens in an ERP solution is tied to the accounting process. For somebody that doesn’t have that background and talks to a controller or a CFO … the conversation’s not going to go very far unless you understand budgeting and financial planning and accounting.”

About the Author

Colleen Frye's picture

Colleen Frye is ChannelPro's managing editor.

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