Making the tough decisions

Making the tough decisions

The economic gloom is giving the local channel an overhaul

Barrack Obama’s ascendance to the US presidency is being hailed by many as the start of a generational change in the US – not just in terms of politics, but also its cultural and social systems. Among his many campaign promises are redistributing wealth and re-igniting America’s middle class, along with rethinking the country’s foreign policy.

While it’s clear Obama is a great orator and idealist, and will certainly bring a breath of fresh air and new initiative to his country, his more pressing short-term concern will be trying to fix America’s imploding financial sector. The ramifications of this are now being felt all over the world and are the most pressing issues facing other country leaders and businesses in all shapes and forms.

Several stories in this week’s edition are inevitably about the topic of battling through the economic gloom and its effect on the ICT sector. It’s a mixture of good and bad – on the one hand, several integrators have been forced to cut staff due to slowing customer sales triggered by the downturn. Both UXC and Data#3 say they will need to put all their efforts into focusing on what they do best, and what is most profitable, in order to ride through the storm. We’ve also heard of several large resellers with supplier credit issues who are experiencing tough times.

Cellnet attributed its decision last week to exit the desktop PC and notebook distribution space to a strategic review of its business and a refocusing on product areas more profitable. It’s no secret Cellnet has been struggling for the past couple of years to juggle its IT and telco arms and improve bottom line results and last week’s decision was a culmination of these factors. But managing director, Stephen Harrison, also told us it’s been precipitated by the financial downturn. His competitors took this further and predicted more distributors could be squeezed out of the market.

The undercurrent for UXC, Data#3 and Cellnet’s actions is a need to really play to your strengths to keep moving with the market. Several people agreed Cellnet’s tough decision today is something most businesses need to do – that is, identify which areas won’t provide growth or profits going forward. The distributor will be better for it in the long term. On the integration side, Data#3’s John Grant claimed its staff cuts coincide with appointments in other emerging areas which offer new growth opportunities.

As with any situation, there are also opportunities to be had in the changing economic environment. Several industry representatives are finding managed services to be a broadening opportunity as customers look to cut capital expenditure and lower risk.

Whatever your strategy may be, we’re all witnessing a major economic change. Like Obama, every one of us will be put to the test. It’s time to focus on what you do best and what needs to be improved and make some tough decisions. You’ll be in a better position for the long term.

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