These are confusing times for all technology companies. Many economists suggest that the outlook is slow, with growth of 1% in 2023 and 2024 for large G7 economies like US, Canada, and countries in Europe, as evidenced with OECD’s March 2023 report. While overall inflation is easing, thanks to loosening supply chains and the cost of oil declining, services inflation is still very much high and rising. This is more impactful for Microsoft partners as their costs of good sold is a combination of people and software.
At the time of writing, many public tech companies are still reporting revenue growth, especially Microsoft. But in this industry, with the nature of recurring revenue, we all recognize that this performance could be a lagging indicator based on sales bookings from many quarters ago and not an indicator of what’s happening on the street today.
So how can a Microsoft Partner prepare?
Most partners have operated businesses long enough to have navigated mixed signal economies before. The natural, and correct, response will be to:
Operate with cautious optimism
Act carefully on new investments and capex decisions that could impact direct costs.
Hire behind demand
Stretch existing resources a little more than normal, and wait for contracts to sign before making hiring decisions. Probably most importantly, for the first time in a while, it’s a buyer’s market for talent and they need to make sure they hire the right person for the job at a fair salary.
Maximize new logo bookings through sales performance.
Focus all selling efforts in a short list of segments. Dispense with efforts or spending in channels that are not producing results, and double down on the ones that are. This could be based on industry, region, product, or go to market channels like marketing, direct selling, or partnerships.
Take doubly good care of your customers.
Put in QBR (quarterly business review) processes with your top customers. Top meaning the 10-20% of your customers that make up 80% of your contracted revenues.
Make a move to recurring revenue.
Shift some of your services revenue into annualized contracts with customers. They’ll appreciate it as much as you do.
Shift services revenue from T&M to Fixed Price
This will reduce friction in the sales cycle while also speeding up cash collection on services, and improving services gross margins (if done correctly).
Increase utilization and gross profit of your services resources
Improve resource scheduling processes while measuring at least twice a month (if not weekly) if the resources are able to do the work being booked. Even finding an extra five hours per resource every month on a team of 20 will yield an extra $20,000 of profit per month. That’s a significant bump to take pain away from a soft quarter. For MS partners an extra $20,000 has the same impact of $80,000 software booked in a month.
Improve Revenue Operations
Make sure you have a clean process to getting orders signed, and invoices out the door fast, and accurately. Accuracy speeds up payment collection.
How can TekStack help Microsoft partners prepare?
TekStack provides an all-in-one platform built for B2B tech companies. It’s a Power App based product that integrates to other Microsoft tools like Power BI, Outlook, Excel, Word, Teams, SharePoint, and even Business Central. It replaces CRM tools and all the spreadsheets you are using to run services. Here is how we help:
| Maximize Sales Performance
Increase opportunity creation by 10% while increasing your win rate by 10% will boost your sales bookings by 70%. It’s a tactical game.
TekStack gives you the reporting, process, and tools to do this while your existing CRM tool is slowing you down. |
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| Take doubly good care of your customers
TekStack gives your team the tools they need to manage customer success. |
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| Make a move to recurring revenue
TekStack makes it easy to track recurring revenue. Take existing service offerings and turn them into a monthly contracted price. Track efforts against those contracts to ensure you are making money and not overextending scope commitments |
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| Shift services revenue from T&M to Fixed Price
Many partners are afraid to make this move because they lack confidence on scope control, and effort. TekStack provides the ability to control both through standardized project templates and invoicing options. |
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| Increase utilization and gross profit of your services resources
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| Improve Revenue Operations
TekStack gives you the tools to standardize quote prices, speed up quote delivery, generate invoices for new orders, services, and renewals without leaving one dollar behind. |
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TekStack is a Power App that integrates all parts of your business onto one platform. Including Professional Services.
Run your business on Microsoft Cloud
TekStack empowers you to run your entire business on the same technology stack that you are selling to customers every day:
- Power BI reports pre-built
- Powerful integration to Teams and SharePoint for document management and team collaboration
- Integration to Word with proposal and project status report generation
- Integration to Excel for deep data analysis
- Integration to Outlook to track all email, calendar, and tasks.
- Integration to Business Central for accounting
- Power Pages portals for customers and partners.
Interested to find out more about how TekStack can help you deliver results for your B2B tech company? Let’s chat.
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