**Prepare the Potatoes**
Preheat your oven to 375°F (190°C). Place the diced potatoes in a large pot of salted water. Bring to a boil and cook for 10-12 minutes, or until the potatoes are fork-tender. Drain and set aside.
**Make the Cheese Sauce**
In a large mixing bowl, combine the softened cream cheese, sour cream, shredded cheddar cheese, ranch seasoning, garlic powder, onion powder, and smoked paprika (if using). Stir until smooth and well-combined.
**Combine the Potatoes and Cheese Sauce**
Add the cooked potatoes to the bowl with the cheese sauce. Gently fold the potatoes into the sauce, ensuring the potatoes are evenly coated. Season with additional salt and pepper to taste.
**Assemble the Casserole**
Transfer the cheesy potato mixture to a greased 9x13-inch baking dish, spreading it out evenly.
**Top and Bake**
Sprinkle the crispy bacon bits and shredded cheddar cheese evenly over the top of the potatoes. Bake in the preheated oven for 20-25 minutes, or until the top is golden and the cheese is melted and bubbly.
**Serve**
Once the potatoes are baked, remove them from the oven and let them cool for a few minutes. Serve warm as a delicious side dish.