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Is automation a boon or a bane for Service Providers?

5 Mins read

Technological innovations have always been welcomed with a sort of friction – think about 3D printing, drones, driverless cars, cab services, travel websites, and automation. These innovations are disruptive and are believed to replace jobs requiring human intervention and sometimes even industries. For example, travel websites like Expedia and Travelocity can replace the need for human travel agents; drones might revolutionize how packages are delivered; 3D printing might disrupt the manufacturing industry and automation may disrupt business operations and the job market.

While it is not completely uncommon to see technology as a threat to the current social or business arrangements, the debate of whether it is a boon, or a bane can continue for a long time.

One of the most talked-about disruptions these days is automation.

“Automation is the creation and application of technologies to produce and deliver goods and services with minimal human intervention.”(1)

The term automation is now used in a lot of scenarios and industries. However, the deepest impact of automation can be seen in the software industry. Automation has changed the game for the software service providers like MSPs (Managed Services Providers), CSPs (Cloud services providers), ISVs (Independent Software Vendors), Resellers, and Subscription Services Providers.

Now, how does automation change the way service providers operate and sell their solutions to end customers or partners?

The rest of the blog will talk about challenges faced by service providers, how automation can help them, and our final take on whether automation is a boon or a bane for the service providers.

Challenges faced by Service Providers

Managing Multiple Billing Models

Today’s online-first customers require flexibility in how they use a service. If we talk about cloud and other subscription-based services, customers want to be able to pay for the service as per their unique budget sets. Some of the in-demand billing models include:

  • Pay-per-use: This billing model offers greater cost efficiency to the end customers. Many organizations today rely on pay-per-use or metered pricing instead of just paying upfront for a service. Popular intelligent clouds like Microsoft Azure, Google Cloud Compute, and Amazon EC2 etc., all offer pay-per-use billing to the customers.

Fixed Price: Some subscription service providers also offer fixed-price billing models. Here, they might want to control the quantity and frequency of the order. For example, many online magazine providers – offer their readers the flexibility to subscribe to a service for a particular period like six months, one year, or two years with greater discounts in longer billing periods. (see the screenshot below)


No matter what type of billing model they offer to the end customers – it comes with operational challenges which we will discuss in the subsequent points.

Managing a product/service plan through a cloud marketplace

When you are offering a product or service in the subscription model – there is a frequent need to update the plans as per the customers’ buying patterns and changing market conditions.

Subscription service providers need to be able to offer real-time modifications to the plans. This includes upgrade, downgrade, cancel, pause, or change of plans. Plans offered by streaming platforms like Netflix, Amazon Prime, Disney+ Hotstar, etc., are the best examples here. They allow their users to modify their plans in real-time as per affordability and time.

Managing customer experience

Managing customer experience in the digital era is a big challenge for service providers. Frequent disruptions brought in by advanced technologies like 5G, Artificial Intelligence (AI), Robotic Process Automation (RPA), Machine Learning (ML), etc., lead to greater customer expectations. This has also led to an ever-increasing number of choices and a depleting attention span. If they don’t have what their customer needs – the customer will switch to another service provider.


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Managing payment reminders and service termination

When selling a software service based on subscriptions – sending payment reminders to customers is a key challenge. Once a customer subscribes to a service, it becomes the responsibility of the service provider to remind him to renew the service before the subscription gets terminated or paused.

This can be a big challenge if the service provider is still relying on traditional business operational models. Not only does it limit the scalability of the operations, but it can also increase the go-to-market time.

Managing add-ons

Offering value-added services is a key differentiator today when it comes to the service providers industry. Customers might want to add some enhancements to the plan without having to completely upgrade to a new one. For example, if a service provider wants to offer a free SEO toolkit as an add-on to a WordPress hosting plan – they should be able to do that without having to create a separate plan.

Managing discounts and offers

The plans offered by MSPs and CSPs often run a variety of discounts and promotional offers. However, creating a promotional offer is not an easy job and involves a lot of factors – including the billing cycle for which the offer will run, time, whether is it one time or always-on, etc., The service providers need to create multiple offers with discounts and modify them in real-time.

Is automation the answer?

The challenges we discussed above – clearly highlight the need for an agile solution that can streamline the complete order processing for the service providers.

Using a traditional method to manage subscriptions or to offer as-a-service solutions is completely out of the picture. It is not only time-consuming but might cost you your entire business. This can be the reason why more and more organizations are now pursuing business process automation.

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Many service providers rely on using multiple software for dealing with each part of the operations. They might use a separate cloud billing software for managing the billing requirements and similar tools for managing sales, marketing, customer support, reporting, etc. This might lead to accumulative costs – raising your budget.

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Using a single business automation software can help service providers streamline experiences, connect legacy systems like ERP and Tally to advanced automation and go agile.

Automation can turn out to be a real-time solution to real-time challenges faced by service providers.

Final take: Is automation a bane or a boon for the service providers?

To some, automation may seem like the enemy with all the talks around it being responsible for cutting jobs, however, the benefits that automation offers outweigh the disadvantages. Service providers who rely on traditional databases and excel sheets to manage customers’ data can move to automation to bring greater flexibility and agility to the job. It also opens the opportunity for people to enhance their skills and innovate. The important thing to note here is that – automation is just redefining how an activity takes place – it might not necessarily replace the human factor.

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Business Automation Software like RackNap, can help service providers:

  • Bring agility and flexibility to their business operations
  • Reduce costs raised by job inefficiencies and errors due to manual operations
  • Standardize processes – each step is performed with consistency until the desired outcome is reached
  • Improve productivity or efficiency of the teams as it allows multiple processes to be handled simultaneously
  • Improve customer satisfaction by providing real-time services and solving challenges quickly
  • Track business processes and maintain auditable documents to meet regulatory and compliance requirements

To conclude, undoubtedly automation brings a lot of benefits for the service providers and can fundamentally change how they do business.

If you want to know how RackNap can help you automate your business, book a demo now.


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