8 Top Tips for Growing
MSP SERVICES REVENUE
With Robotic Process Automation
For managed service providers
INTRODUCTION
Small and midsize businesses (SMBs) are a critical component of the economies in countries
including the U.S., Canada and the UK. In the U.S., SMBs account for about two thirds of net new
job creation and deliver 44% of overall economic activity.
Technology Managed Service Providers (MSPs) are increasingly critical to the operations of SMBs.
In fact, in 2020, small companies in the U.S. increased their spending on MSP services by more
than 15%.
A 2021 report by Xerox Corporation found that 80% of SMB leaders saw automating tasks and
processes as important to their survival, with 82 percent emphasizing the same when it came to
digitizing paperwork.
80%
of SMB leaders see automating tasks
and processes as important to their survival.
Source: Xerox Corporation, The state and Fate of Small and Medium
Businesses, 2021.
Meanwhile, Gartner predicts almost 20% growth for Robotic Process Automation (RPA) next year. Much of
the growth in the RPA space, up to now, has been in the large enterprise
segment. The next wave of rapid growth will be in the small and mid-market segments of the market. This
means there is a huge opportunity for MSPs to provide automation services to small and midsize
businesses.
WHY BUSINESSES NEED
MANAGED AUTOMATION
SERVICES
Lack of RPA expertise:
The lack of RPA expertise, talent, and resources makes it difficult for SMBs to implement this technology, even
though the technology is praised for its ease of implementation. MSPs can fill this void and help businesses
successfully deploy RPA technologies. MSPs can identify which business processes are best candidates for
automation, then deliver and manage the bots that automate those tasks.
Cost and risk reduction:
Using the services of an MSP offers businesses considerable cost savings over building up their own RPA
capabilities. Taking advantage of MSP RPA managed services dramatically reduces the risk of project failure, as
well.
Focus on their core business:
One of the greatest incentives to partner with MSPs is that they will shoulder all the RPA responsibilities that
fall outside of the SMB employees’ roles and areas of expertise. Putting RPA projects in the hands of the MSP
allows the company to focus on its core revenue-generating activities.
TOP RPA USE CASES FOR MSP CLIENTS
Process
RPA use cases
Business Benefits
Accounting
Accounts reconciliation
General ledger management
Tax data collection
Invoice generation and reconciliation
Financial reporting
Expense management
Billing information extraction
Preparing data for audits
Simplifies overly complex and least efficient aspects
of the accounting function.
Reduces business costs related to errors
(incorrect entries, formulas, duplicates etc).
Guarantees legal compliance.
Enable businesses to operate efficiently.
Customer
Onboarding
Documents management
Identity verification/KYC
Data extraction and reconciliation
Regulatory compliance Customer
communication management
Enables companies to offer consistent
onboarding experience to all customers.
Increase accuracy of data processing (by
eliminating repetitive steps).
Fast and smooth onboarding that improves
customer experience and revenue.
Reduces customer acquisition costs and churn rate.
TOP RPA USE CASES FOR MSP CLIENTS
Process
Human
resources
Supply Chain
Management
RPA use cases
Resume screening
Employee
Onboarding
Payroll management,
compensation, and other benefits
Compliance
Time record validation
Best price monitoring
Order placement and scheduling
Procure-to-pay
Returns processing
After sales service
To learn more about RPA use cases, read our eBook: Robotic
Process Automation: 101 RPA Bots.
Business Benefits
Free employees from tedious tasks
and enhances their productivity.
Minimizes the time spent on employee recruitment
and onboarding.
Slashes the costs related to storage
and printing of documents.
Helps the business maintain competitive pricing.
Reduces manual effort and
associated labor costs.
Improves service delivery.
Download eBook
BUSINESS BENEFITS
OF AUTOMATION
SERVICES FOR MSPS
AND THEIR CLIENTS
MSP Client Benefits:
•
•
•
•
•
Cost savings from faster execution of routine, repetitive, manual tasks
Zero errors, which increases customer satisfaction and eliminates rework
Freedom from boring, manual processes which can cause worker burnout
More time to spend on higher value business functions
Easier to track and maintain compliance with industry standards
MSP Benefits:
• RPA managed services enable MSPs to grow their monthly recurring revenue
(MRR) by providing this in-demand, new service offering on a subscription basis.
• RPA managed services are “sticky,” meaning that once you implement business
process automation in your client accounts, you will likely stay in that account for
the long term.
• RPA managed services allow you to “land and expand” within your client accounts;
grow your rpa services footprint over time with new process automations.
8 TOP TIPS FOR STARTING
YOUR AUTOMATION
SERVICES BUSINESS
1. Focus on Mid-market and Small Businesses
In the U.S., there are currently about 10 million candidates for 11 million job openings.
We are in the era of the “Great Resignation” as many people are quitting their jobs in
pursuit of higher value-add opportunities. This labor shortage has created a huge
demand for business process automation.
$20B
in SMB and Mid-Market Automation
Services Demand (U.S.)
The demand for automation by SMBs is estimated to be around $20 Billion in the U.S.
alone. In addition, mid-market enterprises are rapidly catching up with large enterprises
when it comes to automation.
In the same Xerox report mentioned earlier, they found that two-thirds of SMB leaders
plan on upgrading their automation tools.
2. Offer Automation as a Service
The demand for automation services is at an all time
high. The RPA services market is expected to grow
30% per year for the next 7 years. SMB clients are
pursuing automation of their business processes as a
growth driver and to achieve competitive advantages in
the market. It’s not just about cost reduction anymore.
Managed Service Providers that are already offering
automation services are seeing initial investments by
their clients in the range of $15,000 to $50,000. This is
why MSPs are seeing 10X returns on their investment
in less than 6 months.
$15K – 50K
Initial RPA Investments
by MSP Clients
3. Grow Recurring Revenue (MRR)
Many technology MSPs already
sell IT services on a subscription
basis. They moved away from
hourly rates and the so-called
“Break-Fix” model several years
ago. There are a lot of benefits to
this approach. For one,
subscriptions provide a steady
and predictable stream of
recurring revenue. This allows
you to effectively manage your
headcount and provides stability
to your business.
Automation services can also
be sold as subscriptions.
In effect, you can turn your MSP
into a Software as a Service
(SaaS) company. This allows
you to access venture capital
the same way SaaS companies
do. This can open up
opportunities to expand your
business in ways not previously
feasible.
Venture capitalists like SaaS
companies for the same
reasons– SaaS subscriptions
provide that predictable
revenue stream.
SaaS businesses are also
capital efficient and scalable,
so VCs can put the money in
and see strong revenue growth.
You can do this too, with your
MSP business!
4. License Your IP and Sell by Subscription
When you sell automation services by
subscription, not only do you get the recurring
revenue, you also get:
• Shorter Sales Cycles
• Increased Client Retention
The reasons for this include the fact that
subscriptions provide benefits to your clients,
too. Subscriptions give them more flexibility to
purchase services. It’s an operating expense
(OpEx) rather than a capital expense, which
typically is easier to get approved.
You get increased client retention (lower churn)
because automation services are “sticky.” Once
you have automated your client’s business
process(es), they will rely on you to maintain the
software bots you developed to provide that
automation.
Your bots should be your own Intellectual
Property (IP). Then you can license your bots
and sell them by subscription to one or many
clients.
5. Use a Fixed Cost Delivery Model and Value-Based Pricing
A common question related to automation services is– how should I price them?
Value-based pricing is a good approach. It allows you to take a percentage of the cost savings
that the automation delivers to your client. Typical pricing is 30 to 70% of the cost savings.
A fixed-cost delivery
model means that you
don’t share the
revenue from your
bots with the RPA
software vendor. All
that revenue is yours.
You just have your bot
development and
management costs.
You and/or your clients
shouldn’t have to pay
bot licensing fees to
the RPA vendor.
6. Land and Expand with Automation Services
Not only do Automation Services allow you to quickly acquire new clients, they also enable you to
grow your footprint in those accounts over time– ‘Land and Expand.”
Upsell your existing customers with new process automations. For example:
•
Digital Document Processing– No more manual processing of digital or printed paperwork or
PDFs. Use a combination of RPA and Optical Character Recognition (OCR).
•
Custom Development & Integrations– Integrate all workflows with proprietary connectors, build
new interfaces and integrate apps with RPA.
•
Data Migration– Develop automated processes to migrate data across ERP, CRM, and Accounting
systems.
•
Data Entry– Automate all backend data entry and extraction. This is great for internal corporate
processes.
7. Protect Your IP (Bots)
Your RPA bots are your intellectual property. Protect your IP with built-in encryption in the RPA
development platform. This prevents your clients and other MSPs from modifying your bots. The
platform should support any bot licensing model you want to use for your automation services
subscriptions.
8. Work with a Software Partner Focused on MSP Success
ElectroNeek’s mission is to enable MSPs to profitably grow their automation services businesses. We provide both
products and services in support of this mission. This includes:
MSP Tool Box, which automates the
lead distribution process
Automation Hub, which includes:
•
Studio Pro low code / no code
RPA development platform
• SaaS and On Premises
Orchestrator products
Bot Protection prevents your bots
from being modified; supports your
bot licensing model
Partner Success Team, which
delivers consulting and co-selling
support
Customer Support Team, which
offers bot co-development services
Marketing Support, including cobranding, case studies and joint
webinars
CONCLUSION
Your opportunity is now to start selling Automation Services to your
mid-size and small business clients. Demand for these services is
exploding due to labor shortages and the need for competitive
advantages in the marketplace. It’s not just a large enterprise
technology anymore.
To be successful, technology Managed Service Providers should
work with an RPA vendor that:
•
Is focused on MSP success in the Automation Services market
•
Provides sales leads, co-selling and co-marketing support
•
Offers a low code / no code development platform and co-development
support
•
Has a business model for MSP partnerships that enables MSPs to grow
highly scalable and profitable Automation Services businesses
There’s a
$60 Billion
opportunity right in
front of you.
ABOUT ELECTRONEEK
ElectroNeek is the leading RPA vendor for Managed Service Providers (MSPs)
with offices in North America, India, Europe, and Latin America. More than 500
customers and partners trust ElectroNeek worldwide to deliver hyper-automation
solutions and support.
ElectroNeek is the preferred RPA vendor for many globally recognized and
leading regional MSPs, such as BDO, HLB, and Compasso, and enterprise clients
such as Electrolux, Epiroc, Sage, and 7- Eleven.
To learn more about how a partnership with
ElectroNeek can benefit your MSP business,
book a Business Consultation.
Book a free consultation
+1 (650) 600-9550
GLOBAL SALES
sales@electroneek.com