The rise of shadow IT could suggest that many CIOs are not able to deliver the innovation required by their organisations, presenting significant challenges in the development of coordinated IT strategies in the enterprise. How can resellers help them, and what challenges will resellers face in building customer relationships and achieving a successful outcome?
The mission critical nature of IT has come to the fore at a time when IT budgets are showing signs of an uptick and the role of CIOs is changing due to digitalisation and shadow IT. The critical nature of business IT is nothing new, but the level of criticality is increasing by the day. "For VARs to remain competitive in this world of fully converged IT, becoming experts in various integrated technologies is absolutely key," said Keith Bartlett (pictured), EMEA Director for Business Development, Distribution & Inside Sales at ShoreTel. "The days of the basic reseller are numbered. VARs need to invest in highly experienced people who are not only sales savvy but also experts in specific verticals. These are the individuals that will attract and retain CIO and business relationships."
CIOs are the face of an organisation's requirements around IT and infrastructure. They are also tasked with improving various lines of businesses (LoB). However, as speed to market and technological change occurs at a quicker pace, it is becoming commonplace for the LoB leaders to seek their own quicker implementations of historic IT solutions. "For example, many Salesforce implementations are driven and managed by sales departments as a forecasting tool with CRM solutions driven by marketing," added Bartlett. "While VARs need to retain and support their relationship with the CIO, developing and nurturing relationships with other LoB departmental heads is also important. This ensures that solutions are considered for their integration capabilities, not just their specific pain point solution. This will enable the VAR to become a trusted advisor and capture more wallet share within their respective customer bases."
VARs need to ensure that any LoB solution is fully integrated into the organisation's IT stack creating a truly end-to-end automated business engine that drives efficiencies, reduces costs and improves customer retention. The context for this transformation is the relentless march of digitalisation which is impacting all organisations. But those seeking to be digital businesses do not suddenly become experts in IT overnight. They specialise in their own field and need to find a way to innovate and build their business services online.
"Customers need help to build a resilient infrastructure with high speed access to digital services," noted Nathan Marke, Chief Technology Officer, Daisy Group. "But surveys suggest that CIOs suffer from a lack of confidence in their ability to cope with the rate of change. Our job is to help the CIO extend their armoury so that the IT department can remain relevant as the business moves into digital services."
Due to the rise of cloud-based applications and changing work habits such as BYOD, the role of the IT department is changing. Shadow IT (IT that is implemented within a business context but without the involvement of the actual IT department) is fine to a point, but it does raise some issues around compliance, support and security etc. "Failure to involve the IT department in these processes comes at a cost," added Marke. "The successful production of digital systems requires the robust management of the CIO in order to deliver an enterprise-standard service."
According to Marke, resellers need to consider the changing role of the CIO, from running a technical department to increasingly becoming a broker of cloud and traditional services. "We should reflect on how we change to continue to add value," he added. "This brokerage role requires the CIO to be highly competent commercially, to be able to communicate and operate at an executive business level, and to build strong, trusting relationships where partners are truly committed to the delivery for mutual benefit."
The CIO's traditional technical skill set is still relevant but must be moved into a third platform context, believes Marke. "Two types of CIO will emerge," he added. "There will be those who rise to the challenge, embrace and allow shadow IT to flourish where it creates innovation and delivers the best collaborative result. These CIOs will become CEOs in time. But those who fail to grasp this opportunity will remain under the CFO as a cost centre, not irrelevant, but not critical to changing the business landscape."
Gartner predicts that Chief Marketing Officers will spend more on IT than CIOs by 2017. The smart reseller must develop their marketing and sales techniques and advise the CIO to have those conversations with the CMO in order to bring value to the relationship. "It is vital that these discussions focus not on the technology but on the services and what can be done to make a business work better," added Marke.
ICT resellers and MSPs occupy a unique position to drive innovation within businesses, drawing together and managing the delivery of a complex set of technologies in ways that are beyond the capabilities of in-house IT departments. "Perhaps more importantly, this technology has become a distraction from what internal IT departments should be focusing on - their core business and how IT can support the objectives of the organisation," said Neil Thomas, Product Director at Claranet.
"MSPs are in a prime position to help businesses take a step back, look at what they need from their IT and where they want to be in five years time. This is a luxury that too many internal IT departments don't have, their time being largely consumed by keeping the lights on and maintaining the status quo. MSPs are able to provide a high level of application expertise that will enable businesses to succeed in developing innovative growth strategies."
But there are significant challenges in the development of co-ordinated IT strategies in the enterprise. "The risk is not that people outside the IT department are having a role in procuring IT," explained Thomas. "Individual units within an organisation do have a role to play because they bring specific knowledge of their requirements. The risk is that the result will be an uncoordinated and siloed IT set-up with duplicated services and uncontrolled costs across the organisation, with data being stored in a way that is not compliant with the security policy of an organisation."
Shadow IT is sometimes a sign that IT departments cannot understand the needs of the business at large, pointed out Thomas. The knock-on effect is that more business leaders are taking it upon themselves to source their own IT. "What is key is that the IT department becomes the enabler of innovation and assists with these purchases," added Thomas. "The effective use of resellers and MSPs can enable an IT organisation to perform this leadership role."
The important role played by ICT resellers in helping end users with their digital strategies is clear in almost all partner-customer engagements witnessed by Entanet. "It's more important now than ever for resellers to develop a real relationship with their customers," said Stephen Barclay, Entanet's Head of Sales. "The abundance of knowledge and experience in the channel makes customer retention a key point of focus. Resellers who operate as trusted advisors earn the loyalty of their customers, especially where it's balanced by strong commercial acumen and a close eye on the market."
Entanet encourages its reseller partners to develop a consultative sales approach, but they will come across challenges such as customer inertia and price sensitivity. "This often comes down to a lack of understanding on the user's part, which justifies the need for resellers to guide the customer," said Barclay. "When they see value in the advice they're given and understand the benefits of a particular solution, price becomes less of a determining factor. Resellers who remain engaged with customers build strong relationships."
Although resellers are experts on the solutions they sell, first and foremost they need to gain a strong understanding of the end user business and the challenges they face. "Strategic solution selling is a requirement," agreed Kim Jennings, Director of Sales at ScanSource Communications Europe. "This approach helps end users to be more efficient and enables resellers to improve how the customer does business. This also helps resellers to get closer to their customers and be trusted advisors. The most successful resellers provide sophisticated sales and pre-sales support, along with a team that understands business issues and processes and can demonstrate a return on the investment. This is the opposite of resellers who just provide an insight into the 'speeds and feeds' of a product with no solution or added value."