Cloud providers cross-selling Services

In an older post (http://tchristidis.blogspot.com/2010/10/saas-and-outsourcing-function.html ) I discussed how Outsourcers could join forces with Cloud Providers to offer better services to their customers and increase response to additional requirements. In that post, I was building a line of thought based on the premise that a) the Cloud provider (SaaS in my example) did not have enough expertise to pursuit the sales of additional services to a niche or vertical market and b) that the Outsourcer *should* be the one to lead the joint effort. That idea is still valid and we have seen some outsourcers do just that: Sell their services, accompanied by specific “best-of-breed” SaaS products. For example, Accounting Services advertising that they are doing the bookkeeping in well-known cloud accounting platforms etc.

In this post – and since much time has passed since the article of 2010 – I will approach the same idea from a different angle: If a Cloud Provider is around for enough time then they must have developed some business expertise at least in some areas that their customers are active. These areas could be horizontal or vertical. So, what if the cloud provider built some new Business Line to offer advisory services and – mainly for the purposes of this article -  Outsourcing Services to their existing customers, thus generating additional revenue from existing clientele. 

Let’s see a practical way of doing this: In my experience, a SaaS platform usually offers more functionality than the average customer/consumer is utilizing. The cloud provider sometimes sees this “underutilization” and promotes additional modules or functions to their customers. But, what if the customer does not have a manpower or expertise to utilize what would otherwise be considered as useful functionality and process-improving software? I have seen many cases where the whole idea is just rejected, so neither the customer advances, nor the SaaS vendor achieves cross-selling; a loose-loose scenario. Let’s see a few examples:

• An accounting platform may offer some CRM functionality. The vendor promotes this new “module” to their customers and they say “we just don’t know how to do it, we don’t have the manpower, nor are we willing to invest right now”.
• A billing platform offers some cash flow functionality, but small-sized businesses do not know what cash flow is or how it is done, or they think that it is something overestimated. So, they are running their business, the usual way, by looking at typical reports and examining their Accounts Receivable, not to exceed a certain limit.

In cases like that, the cloud vendor, may have seen how other similar businesses are operating, what the best practices are and could potentially step-in and offer to their customers not only the software to “do” the function but the actual “doing” of it. In other words, the cloud vendor is generating business for a new Business Line of outsourcing services to the existing SaaS customers. Now, the two examples above are essentially transformed to this:

• Let’s sit down together and see what CRM functions you would ideally want to implement and then we shall utilize our own software, using your existing data to come up with the plan and actions. If, for example, the SaaS customer would like to promote new discounts to its good clients, then it could be the cloud vendor’s Outsourcing Department that would a) drill-down to the customer database to find “good customers”, b) prepare the marketing newsletter using internal expertise and c) send the newsletter by existing platform functionality.
• Using our expertise we shall study your revenue stream and nature of expenses and we shall propose tactics for cash-flow management. After the tactics are defined and agreed upon, we shall run a bi-monthly refresh of the cash flow so that you will have an early warning in periods of cash balance problems. The small-business manager would get scheduled cash flow reports, just in time to adjust their expenses, loan management etc.

There are many other examples of how SaaS vendors can further assist their customers, assuming of course that the first have actually developed an adequate level of expertise or they are willing to invest in developing by on-boarding new talent. But the main lesson here is that cloud vendors may have an opportunity to transform themselves to something more than “technology suppliers”; I would call it “Holistic Business Support”.