Pricing In Managed Services
Pricing managed services often includes numerous variables and calculations. The variables could include labor, number (or types) of devices or servers, software, hardware, or any combination. Cost could be based on internal capabilities or it could be supplied by third-parties. Finally, managed services are delivered over specific timelines with the goal of renewal, so it’s not a one time sale—and it’s not a project with natural end.
This growing industry is transitioning to new business models. The volume of sales quotes has gone up while pricing complexity and the spectrum of services offered has increased. Despite this, pricing is still largely done in spreadsheets, which is slow, expensive, error prone, and it limits resource demand visibility for the delivery team. Worst of all, introducing new service offerings (with new pricing, terms, discounting strategies, proposal content, etc) is very difficult and slow to implement when it’s all managed in spreadsheets.
Proposals In Managed Services
Proposals (aka quotes, bids, SOW, etc.) in managed services are painful. Proposal content has three components:
• Standard (same In every proposal)
• Solution (pricing, service descriptions, scope, term, etc.)
• Unique (specific to the opportunity)
But here’s the problem: pricing (in spreadsheets) and proposals (in Word) are data silos, except through manual effort to combine them into a final sales document. This means the proposal content is static—it’s not dynamically linked to pricing. So, the pricing and proposal content have to be manually updated for each iteration or change. Even a modestly high volume of proposals makes this process manually intensive and increasing distant from the automated world of today.
Services CPQ to the Rescue
Services CPQ is an industry-specialized version of CPQ. Where most CPQ products are designed for selling products, Services CPQ is built for selling enterprise services like managed services and professional services. Rather than replace CRM (customer relationship management) or PSA (professional services automation) applications, Services CPQ fills the the universal void between opportunities in CRM and delivery details in PSA.
With Services CPQ, in just a few clicks, a salesperson (or a sales support team) can answer guided selling questions and auto-generate all the details of a managed services proposal: service offering, cost, price, timeline, roles, rates, and the proposal content. This makes selling managed services radically faster, more consistent, and less expensive.
Opportunity to Customer, Seamlessly
What if you could go from an opportunity in CRM to project execution in PSA without ever touching a spreadsheet? What if you could provide real-time resource demand visibility to the service delivery teams? This is now being pursued and attained by managed services teams. This efficiency unlocks new capacity resulting in new services, faster revenue, better margins, and lower customer churn. What is your Services CPQ strategy?