Nine ways to beat the economic blues

Nine ways to beat the economic blues

How to beat the downturn

Let’s face it, in the past few weeks economic indicators haven’t exactly been cheery. The Reserve Bank cut interest rates again because of tightening global economic conditions, worldwide stock markets tumbled on the face of global uncertainty, HP slashed its earnings forecast again, Nokia had another shocker, PC shipments declined 8.3 per cent according to Gartner, analysts forecast that US Mac computer sales - and, indeed, global sales -  will be down 6-7 per cent in Q3, the biggest decline since the Great Recession, and, to cap it all off, IBM, Intel, Microsoft and Advanced Micro Devices (AMD) all had poor quarterly financial results.

On top of all this, a report by Computerworld US, which merged forecasts by JPMorgan, Forrester and IDC, said overall global IT spending is being adjusted downward.

However, despite the bleak outlook, some channel businesses have managed to thrive. But for those wondering what to do next, it isn’t quite as easy.

Industry experts say businesses do need to take some necessary steps outside of what would be considered normal to survive. The good news is some companies have already begun to formulate creative variations on their offerings to differentiate themselves from their competitors.

Recent examples include Ingram Micro, which announced it will configure Cisco Unified Computing System (Cisco UCS) solutions in its Configuration Centre at its Advanced Logistics Centre in Eastern Creek.

Ingram Micro enterprise technology group, senior director, David Lenz, said the new arrangement was an indication of its long-term commitment to the local market and to providing a platform for further expanding its service capabilities to support the local channel.

“This is not about putting a new coat of paint on a room and moving some tables around - Ingram has made a real, tangible investment in meeting the short-term and long-term needs of the Australian market,” he said.

CA Technologies also identified a niche and is offering network performance management via the Cloud together with Westcon Group.

CA Technologies A/NZ senior channel director, Klasie Holtzhausen, said the move is a result of the vendor looking to expand its growth in the market and discovering the best way to do that is by accelerating its business through the channel.

Here are the best tips for getting ahead.

The 9 top tips

1. Pursue IT for business productivity Express Data sales director, David Peach, said the first step the channel needs to take is to look at decreasing input costs or increasing output to improve productivity.

“The opportunity exists for them to refine and sharpen their focus in terms of having conversations with their customers on productivity,” he said. Then comes down to resellers identifying where their skillsets lie.

2. Decide on the focus, formulate a roadmap

Channel Dynamics director, Cam Wayland, said businesses should re-evaluate their target customers, what the it is trying to achieve, and deciding what the business is not going to do.

“Focus can be a double-edged sword. You have to decide on the things you potentially will not do because you might be stretching yourself too far and not deliver on the areas,” he said.

Thomas Duryea CEO, Andrew Thomas, suggested channel players should analyse their businesses and figure out where their resources can be directed.

“They have to then fit it into a long-term strategic roadmap. The channel has to guide its customers through where the offerings fit for the longer-term and reassure them that they are moving in the right direction,” he said.

3. Get to the bottom of customer requirement and strengthen bonds with them

WhiteGold Solutions strategic advisor, Leigh Howard, said businesses rely more heavily on trusted relationships, especially during touch economic conditions. “It is six times harder to win a new customer as it is to keep an existing one,” he said.

Wayland claimed channel businesses should also converse more with their customers and get to the bottom of their requirements instead of jumping straight into offering solutions.

“When they are with the customer, they need to have a business conversation rather than a product conversation, as well as confirm the solution to benefit or add value to the business.”

4. Leverage vendors’ marketing development funds (MDF)

Wayland said vendors often had unspent MDF, and partners should propose a marketing strategy that benefits both the partner and vendor.

“Partners must think that should the vendors fund it, do they get a return out of spending money with that particular reseller that is going to drive incremental business for that vendor,” he said.

5. Move into the security space, or specialise in something niche

According to Peach, security is currently an enduring and robust space to be in. “Even in such an economic climate, the security needs of a customer do not go away. During the darkest days of the GFC, Express Data saw our security related sales increase by more than 30 per cent.

“Businesses still need to assure their boards that their IT operations are secure. Focusing on areas where needs do not change will serve resellers well,” he said.

6. Embrace emerging or evolving technologies such as Big Data, the Cloud, mobility, video

Thomas said businesses need to take up new and emerging technologies which represent high growth opportunities and businesses need to invest in them early to reap the benefits.

“Businesses need to conduct deeper investigations into how these technologies benefit them. Most of them are already beginning to jump on the bandwagon. The request should be ‘How do we use it, what benefit is it to me and how do I ready my business for it,” he said.

However, Peach warned the channel to not get too caught up with “buzzwords that are floating around” the industry.

“I’d hesitate to resellers trying to make a very quick change in their business in order to go after then next big thing,” he said.

7. Leverage a distributor to take cost out of business

Howard urges businesses to develop on their distie partnerships and use their sales skills, technology knowledge, pre- and post-sales support and marketing capabilities.

“Distributors can better scale their marketing capability as they work across the entire channel and often with multiple vendors. But from a reseller or vendor perspective, they should ensure that they partner with a good value-driven distributor,” he said.

8. Use professional services to increase profitability

Howard claimed businesses should be selling solutions instead of point products to stand out from the crowd and have a unique value proposition.

“Increase the total value of your offering, beyond one product. You can’t be a ‘me too’ supplier in a contracting market and still prosper,” he said.

Howard signalled out proof of concepts, evaluations, installation work on behalf of the end-user, and taking level one support as some professional services examples that they can consider.

9. Enable a more mobile workforce and invest in talent

Peach said enabling a mobile workforce will allow staff to work from home and decrease a company’s spend on facilities. Video conferencing and telepresence is a method businesses can utilise.

He also mentioned retaining and investing in talent as another avenue from which benefit can benefit.

“If you look after your best people or bring in good new talent and take care of them, they will stick to you through any storm that might come along or when competition is strong,” he said.

Additional reporting by Mike Gee and Patrick Budmar

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Tags MicrosoftNokiaintelciscoservicesIBMPCIngram MicrodistributorExpress Datadistributionwhitegold solutionsapple macChannel DynamicsThomas DuryeaComponentsCA TechnologiesAdvanced Micro DevicesGreat Recession

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