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​Avoiding insolvency - How can the channel stay afloat?

​Avoiding insolvency - How can the channel stay afloat?

Adaptability becomes a key element of surviving in an increasingly competitive channel.

With the ongoing threat of insolvency looming large over the channel, resellers and distributors must take new steps to help insulate themselves against the threat of financial collapse.

“There have been too many resellers and distributors going under in recent times,” Channel Dynamics co-founder and CompTIA director of A/NZ community channel, Moheb Moses, said.

“But it needn’t come to that, as there are a number of processes companies can implement to greatly reduce the likelihood of ending up in that dire situation.”

Moses said a key element of surviving in an increasingly competitive IT channel is adaptability.

With a number of “major shifts” in the channel taking place during the past decade and, with the rate of technological innovation set to increase further, adaptability and flexibility are seen as “critical assets” for channel players to survive and thrive in the years ahead.

Looking ahead, Moses believes that IT firms face a number of challenges when undergoing business transformation, citing the importance of meeting such challenges “head on”.

“Cash flow and other financing challenges can occur when a business is looking to transform itself, so any changes should be fully costed to ensure that the necessary collateral is in place, including contingency funds, to ensure that the business transformation doesn’t put the entire operation at risk,” he explained.

“Companies must ensure they don’t neglect their existing business while pursuing new opportunities. If customers feel their level of care and support has declined, businesses could lose the income they were counting on support the new opportunity in its infancy.”

For Moses, having a business transformation roadmap can help organisations to avoid such a scenario.

“By creating a transformation roadmap, everyone can be across where the company is heading, what the rate of change will be, and what the ultimate objectives are,” he added.

“This can go a long way to alleviate confusion and uncertainty, as well as identify whether aspects of the diversification plans have the potential to hurt existing parts of the business.

“This lets decision-makers identify them early and address them before problems escalate and things get out of hand.”

Given the rapidly transforming landscape within the IT sector, Moses believes it’s equally important for companies to stay up to speed and ensure that staff do not fall behind when it comes to product and services training.

“Having a skills gap can be the death of a business, so companies must ensure that their staff are kept up to speed with emerging tech,” he said.

“This can also have the added bonus of equipping staff to identify new opportunities to grow the business that are not currently being exploited, which could pay a handsome dividend.”


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