The channel's focus on the market should be collaborative, not separatist, and to go it alone would be to remain in the shackles of doomed legacy, according to delegates at a round table debate hosted by Comms Dealer and supported by Entanet.
Today's ICT resellers operate in a market characterised by unstructured demand and fluid buying behaviours where, increasingly, customers are part-way through the procurement process even before their first sales meeting. "We were selling hosted 10 years ago," said Philip Donigan, Sales Director, STL Communications. "Back then it was a customer education process, today they understand hosted, and most people we speak to understand the technology, what they want to buy and the benefits. Now it's about us convincing the customer that we can deliver a workable solution. It's all about knowledge and the need for customers to partner with organisations that deliver and support solutions."
ICT purchases no longer follow a formal procurement process based on predefined needs, and the ability of reseller sales staff to perform effectively in such conditions may now be in question. For example, their first hurdle could be to deconstruct the prospect's preconceived ideas about what they want in order to guide them towards a better solution. "Customers understand far more about the technology, but they don't know how to put a solution together that gives them exactly what they need for their business," said John Teague, Managing Director, ITEC. "Sales people have to start understanding the customer's real requirements. We don't sell kit so we can have a frank conversation and discuss their needs which ultimately might be a million miles away from their initial perceptions."
Increasing deal sizes and win rates in an environment where more customers want integrated services presents a number of challenges for resellers, such as properly identifying customer requirements, aligning product portfolios with those requirements, qualifying deals and bringing the elements of an integrated solution together seamlessly. "Customers are much more educated which is a challenge for partners," commented David Dadds, Managing Director, VanillaIP. "Resellers were once advisors, and for the most part, vertical in their product set. Now they are part-advisors and have to be more knowledgeable across different verticals. Customers have even told us about applications we didn't know existed. We are not always the givers of knowledge, and partner education is one of our biggest challenges. In the old days resellers provided a single solution, now they're providing multiple solutions and customers need advice."
The impact of these trends is already being felt and greater collaboration between partners could be the only option. "The shift from selling boxes to selling business needs is a quantum leap for our industry," commented Teague. "You cannot do it all on your own. If you haven't got the processes in place how are you going to deliver the service properly? Customers are more demanding than they have ever been. They have insights into how these things are done and react adversely when they're not done to the letter. The way forward for our industry is total collaboration. Stick to what you're good at, be best at it, and work with other people who are just as good in their particular field."
Resellers have interface points with a number of other parties and they need to approach that middle ground more collaboratively, according to Martin Taylor, Director, Redwood Technologies. "Resellers need to know more about networking so they can have the IT-telco discussion," he said. "They need to know more about the business needs of customers, and they need to know more about the product side so they can interface better with people sitting above with the technologies.
"Just as importantly, we need to know more about their sectors so we can train project managers to have more valuable conversations with the reseller. Further upstream, as well as computer scientists we have mathematicians working on future models. Everyone needs to build out and extend their positions by upskilling in order to interface more closely and collaboratively with other organisations in the chain."
To say that the market bears little relation to its form of just a short time ago would be to greatly understate the speed of change, and Donigan pointed to a stark sign of the times. "The minute is neither here nor there now, but 18 months ago it was important," he commented. "For us, it used to be a case of being good at selling PBXs, or more latterly good at selling a hosted seat, or broadband line or Ethernet connection. That was it, the customer brought it all together.
"Now we are involved in delivering a solution. We are expected to configure the LAN, plug it into a firewall and make our way to the Ethernet service and manage everything. It's far more complex now so to deliver our solution cost-effectively it's necessary for us to invest in IT skills and take-on networking engineers. This is a logical step."
Such notable shifts are taking place across all levels of the comms industry but one constant factor is the customer base, which if managed properly will keep resellers' feet dry in a sea of change. "The channel has those all-important relationships with the customer and knowledge of their key market sectors," added Taylor. "We have knowledge of the technology and we see more resellers bring prospects to our demonstration area where our project managers and application engineers spend time helping customers shape their requirements. Resellers already have these relationships, they are providing a service, they understand the customer's requirement for additional services and they want to show them the technology that is available."
Collaborating with customers to uncover their real needs will also prevent pricing issues becoming the legacy of a technology revolution that has unleashed an information free-for-all. "The Internet is almost crushing the channel," said John Larkin, Managing Director, The Kenton Group. "There is so much information available including transparency on pricing. With connectivity, for example, customers have access to Openreach prices and may be able to calculate your margin based on what you're charging them. But business is about relationships. Now, it's about collaboration, knowledge, consultancy and added value. These are critical."
Knowledge is the product of learning and imposing an upward ratchet of education has enabled 8x8 Solutions to significantly drive sales through its channel. "We had a number of partners who struggled to articulate and position UC," said Charles Aylwin, Director for Channel and Public Sector. "They had spent many years selling PBXs so we set up an academy in 2011. It took almost nine months to get people trained to the point of being effective and accredited. The academy has now accelerated our growth. We also measure churn very carefully. Churn comes from bad customer experiences. If we do a brilliant job on a wet piece of string the customer still has a bad experience so we focus hard on getting it right. We have forward looking conversations with customers and qualify every stage of what we are doing, not just in terms of selling the solution but also living with it."
It is clear that a time-worn sales pitch is no longer the solution to a prospect's needs. Doing so is to tread a familiar - and doomed - path. But the scope for ICT suppliers to win deals based on broad collaboration is widening. "We don't sell, we do solutions and help other companies that can't," stated Teague. "You can operate in specialist markets but extending into unfamiliar areas could see resellers become mediocre at everything. We're now talking about unified and collaboration, which is every aspect of an organisation's life. It's not just about the infrastructure, it's about how they run their business and what the solution does for them. It's far better to partner with someone who is good at their particular area and add the two together."
Ian Calder, Managing Director of Centrix, has defied all temptation to go it alone. "I'm a great advocate of collaborative working to add value," he said. "In the past we collaborated through necessity but now we do so by design. For example, we outsource to software developers. But when you partner with someone they may be delivering on your promises so its important to have good processes and to choose your partners carefully."
Partnering is an accepted success factor and for many channel companies sticking to a policy of selective collaboration has become the number one priority. "There are certain people we partner with in all spheres," noted Enzo Viscito, Director, Inclarity Communications. "Whether it's connectivity or UC, you gain their expertise. If we can do it well ourselves we will, but sometimes speed to market, getting people trained and even the cost of employing staff is prohibitive. It's far easier to partner. But if the infrastructure beyond our control doesn't deliver reliability we are left in the mire. We may have done everything for the customer, but it's our name that's tarred and that's what frustrates me. That's the biggest challenge we face. But we're in a situation where we all need to partner."
Combining respective skills should become the master of all supplier and reseller partner relationships, with all parties driving towards a common goal, agreed Entanet's CEO Elsa Chen. "As a wholesaler, it's right to do what we do best and strive to make it even better," she said. "Executing processes that add value for the channel is what we do best after all. For example, for the connectivity element of a solution, our specialism in providing the network, the resilience and the support removes the hassle for delivering these from channel partners. They can rely on us to deliver that efficiently and accurately. More widely, relying on collaboration with another organisation is a key challenge when you have to respond to opportunities quickly. In terms of reliability, people need to think carefully about their choice of partner. It's not about cost."