The digital era may still be in its infancy but many distributors have already made big strides in strengthening the hand of resellers as they make their strategic plays in the new age of technology driven business transformation.
Digital transformation, cloud and the hybrid enterprise have combined to drive an irreversible shift in the way ICT products and services are consumed and provisioned. It's no longer about physical products, it's about streamlining how business is done and placing the customer experience at the heart of the transaction. "High demand for new technologies and the emergence of disruptive vendors have catalysed an unprecedented rate of transformation within the ICT channel," stated Steve Harris (pictured), EVP Unified Communications for Nuvias Group (formerly Managing Director of Siphon). "It's important to rely on technology partnerships with distributors that are focused on meeting the increasingly complex and diverse needs of their channel partners."
UC distribution in particular is being shaped by players who are new, disruptive and cloud-first, pointed out Harris. "The disruption started the moment tier one software vendors went all in with the cloud," he added. "We're a couple of years down the line from that inflection point. Any distributor that wants to be around in 2020 will already have implemented their digital transformation and transition strategy."
Forward looking strategies take into account cloud-based consumption commercial models that are a departure from the world of CPE. "This encompasses a professional services wrap as part of the overall UC solution which we believe will drive the adoption of technology such as Skype for Business (SfB)," added Harris.
One way Nuvias' UC Practice has harnessed digitalisation is in how it provisions and configures IP end points, which is done prior to distribution. "The positive impact of this is that the engineering resources previously used for installation, maintenance and support can be redeployed by the reseller, with, for example, end user training tailored to enhance the overall customer experience and drive adoption of the solution," said Harris.
Automation is one of the key areas of development, noted Harris. "We're able to transact in the way that channel players want to do business, which is mainly online and digital," commented Harris. "We have invested heavily in developing software and systems that allow us to deliver our services in a way that is a step change from the classic resourcing method. Distributors must adopt a new business model where resellers can harness the full value of digitalisation, rather than by making incremental changes to traditional logistics management."
According to David Fearne, Technical Director at Arrow ECS, the two big forces shaping the UK's ICT distribution industry are new demands on the channel for outcome-centric distribution and the cloud. These driving forces raise two key questions, he says: What is distribution's place in the cloud? And how do distributors become both product and solution focused and integrate the two?
"The future of distributors hinges on how quickly they can pivot to becoming outcome-centric," he observed. "Choosing to invest in the right services to deliver the right outcomes, while also supporting customers and making sure they are keeping pace with the changing demands of the channel is crucial. We invest much more in projects that showcase effective business outcomes."
But digital can create a headache for businesses, including IT distributors, especially those in data management and security, pointed out Fearne. "The more frequently companies engage with their customers through digital devices and technologies, the more data and information they will have about individuals," he explained. "This data helps to ensure that businesses stay relevant and meet the needs of their customers. It also means that they must be compliant with stringent data regulations such as GDPR. As cyber attacks increase this will become more and more important."
As the rise of digitally delivered services continues to turn traditional modes of operation on their heads, distribution leaders need to consider to what extent they can offer the digital capabilities required by their customers, while also ensuring they stay true to their value proposition and service delivery commitments. This is a balancing act that's top of mind for James Vickerage, President of ScanSource Imago.
"What's more, it's important for all members of the channel to focus on discerning how they articulate their value to their partners using digital tools and services," he said. "It's equally important for them to enhance their value and offering to stay ahead of rivals like large suppliers and online retailers that have immense digital capabilities."
Vickerage believes that resellers can find great value in self-service portals that enable them to learn more about vendor partners' hardware and services offerings, enabling them to deliver new applications to their customers while also helping to unify complex technologies. "As the channel continues to transform, so do we, particularly related to delivering services," added Vickerage.
"Although many of our customers are still consuming traditional services we also work with a number of emerging, innovative vendors that look to us to work closely with customers and help them grow the market opportunity. Understanding what is appropriate for our customers and what will genuinely deliver value is where our focus lies, along with the as-a-service model which is critical to all members of the channel."
Online services such as Amazon and ao.com and their speedy response times have whetted the appetite for more of the same among customers who are becoming intolerant of clunky and awkward transactions. "We were quick to realise the importance of online portals," stated ProVu Managing Director Darren Garland. "The key to overcoming these challenges is to be agile when it comes to systems development. As customer requirements evolve, so do our systems."
He cited as an example a recent system development that was undertaken around 3CX which has enabled ProVu to create an automated ordering process. "This is particularly important when distributing products such as 3CX licences as there is an expectation of receiving them much faster than physical hardware," added Garland. "Thanks to our developments, our customers can now receive 3CX licences within a matter of minutes."
Other ways in which Garland sees distributors helping resellers harness digital for competitive advantage is through supplying cloud services, having a competitive product set, providing cross-selling and up-selling opportunities, and offering value added services. "A clear strategy is also vital for the future success of distributors," he added.
Nimans agrees, and has transformed its business model based on a clear strategic vision to evolve away from hardware-based sales into a world of cloud-based software licences. Tom Maxwell, Head of Dealer Sales at Nimans, commented: "There is still strong demand in the SME sector for standard equipment sales, while hosted has around a 25 per cent market share. The key to success is offering resellers choice and flexibility - on-premise, hybrid or cloud. Years ago many resellers buried their heads in the sand, but that's not the case any more."
However, having raised their heads above the parapet there is still a number of opportunities that aren't fully realised by resellers, such as WLAN, IP infrastructure, CCTV and access control, noted Maxwell. "Many new opportunities exist," he added. "Resellers are in a strong position to control their own destiny."