How UCaaS Complexity Can Choke Back-Office Operations

By Evan Rice

Evan Rice

With the unified communications as a service (UCaaS) sector on track to grow over 10% annually for the next 5 years, the future looks bright for resellers of cloud communications services. While enterprise adoption of these platforms is a huge driver of this business, the greatest number of players will still be in the small- and midsized-business space.

Supporting this trend is the continued migration of SMB customers to cloud-based telecom services. With a fully digital experience being embraced by these businesses, it is only natural that their full suite of communications would follow suit. Additionally, this also means they can outsource management of these technologies and eliminate the headaches of doing it themselves.

That might sound like a sweet deal for managed service providers (MSPs), but it comes with a different set of potential headaches.

Complexity Complications

While most providers tend to focus on the necessary service integrations and staffing to support this new range of services, they often overlook the ongoing effects on their back office. The most crucial of those functions is billing, but the spillover effect to other areas is very real. Like the classic parable of boiling the frog, it’s possible for the gradual increase in billing volume to finally overwhelm a back office.

Interestingly, this often doesn’t look like a volume problem, but a complexity problem. As billing staff struggle to manage the monthly close, they find that manual processes to get billing out don’t work for large volumes of usage-rated data. And in fact, the complexity can grow even if their customer count is not necessarily growing.

Inundated by Integrations

In addition to organic growth, many UCaaS providers are growing by leaps and bounds in today’s red-hot acquisitions market. With larger organizations absorbing smaller ones, there is every chance the acquiring company is assuming less-developed or under-resourced back-office operations, including their billing functions.

Consolidating this expanded book of business often includes a series of operations platforms integrations like ConnectWise, as well as the core services. There will also be the accounting integration (e.g., QuickBooks, Sage, etc.) or data import, along with all the account records.

And, in short order, all this can hit back offices very hard.

Drowning in Data

So many of these challenges in scaling cloud-based communication offerings go back to the fact that the charges are usage-based. This may change by number of users, the quantity of data used and different rates for different tiers of services or different bundles.

This problem has been well known in telecommunications for a long time. Charges for these services can be a labyrinth of rates and usage levels, compounded by all the taxes associated with it. Telecom tax regimes are notoriously complex, so much so that there is yet one more set of attached services that simply supplies current tax rates for every jurisdiction in which a provider has a presence. (Note: You don’t need an office in a location to have a “presence” there; if you use cables that transit a jurisdiction, you have a presence.)

The Bills Come Due

All these challenges make themselves felt in the billing and back-office operations. Without a dedicated billing platform with usage rating capabilities, it’s almost impossible for a cloud communications provider to perform timely and accurate customer billing. The results can include employee turnover, revenue leakage, customer churn or some combination of all those. In short, to prepare a UCaaS reseller or other cloud communications business for efficient growth, a key piece of the foundation needs to include a solid, purpose-built billing platform.

Such a platform must go beyond billing, however. It must allow for out-of-the box integrations with other tools the provider uses to manage their operations. It must connect seamlessly with the most common accounting packages, and the widely used tax data. It must accommodate usage-based charges at a variety of rates, as well as tracking promotional pricing and other such variables.

With such a platform, a cloud communications provider can allow billing to operate as the heartbeat function it is.

Evan Rice is executive vice president of sales and marketing at Rev.io. During his 12-plus years of experience in the communications and machine-to-machine industry, he held positions as an enterprise account executive for VMware and vice president of sales for Cbeyond. You may follow him on LinkedIn or @rev_io_hq on Twitter.