Business as usual as new-look Dicker Data lays out bold NZ channel plans
- 13 May, 2015 08:39
As far as working cliches go Down Under, it’s an all too familiar sight to see those big bad straight-talking Aussies cross the Tasman, march steadfast into the boardroom and attack the jugular of its New Zealand division.
Seen merely as a side-dish amidst an Australian degustation, Kiwis are often considered after thoughts, lost in the bigger picture of business.
But that of course, is a load of baloney, typified by Express Data’s recent rebranding in New Zealand, incorporating all things Dicker Data as the distributor moves onto bigger and brighter days in the Kiwi channel.
“To be honest,” admits David Dicker, CEO, Dicker Data, “we haven’t had to do anything. The guys on the ground in New Zealand already know how to do it.
“We’re not coming over here and telling them how to do anything. In fact, this operation is run much more in line with how we run our operations in Australia.”
Over a year since confirming the completion of its AU$65.5 million purchase of the competing distributor, on both sides of the Tasman, Dicker admits the Kiwi division of the business has been, to a degree, left to its own devices.
“This was already a good company so we didn’t want to come in and make a lot of changes, we didn’t see the need,” he says. “To be honest New Zealand runs so well that we’ve been able to leave it alone for a year so we could focus our efforts on the Australian aspect of the acquisition.
“Express Data in Australia was a heavily process driven organisation with a different structure and philosophy to Dicker Data, we were completely different companies. But in New Zealand that’s not the case. Just look at their philosophy and aims, they’re on the same page as us.”
Echoing Dicker’s observation of the Kiwi arm of the business, Dicker Data New Zealand chief Phil Presnall says the acquisition and subsequent rebranding has had minimal to zero impact on the company, setting the distributor up for further growth across the country in 2015 and beyond.
“It’s been easy,” he adds, “when we got acquired we realised we were more like these guys than our original parent company and this came after only a few conversations.”
Having recently brought Toshiba on board in New Zealand, Presnall’s task in the Kiwi market is clear; recruit more vendors and drive greater revenue.
“Without being specific about numbers, we’re looking to bring more vendors across in the volume space so we’re expecting large double-digit top line growth in terms of the next 12 months,” he forecasts.
“Going forward I’d like to think we’d have at least another two or three significant vendors on board by the end of the year.”
Very much on Dicker Data New Zealand’s target list is HP, and despite the tech giant being currently locked in across the ditch, Dicker accepts that when it comes to signing up new vendors, patience is very much a virtue.
“Our main function is to get vendors,” he adds. “That’s how I see it. We don’t have HP here and that isn’t great given HP is our biggest customer in Australia.
“We should have HP in New Zealand but we don’t and that’s the politics of the whole thing. We’ll have to work on that and it’s a long process.
“In Australia it took us nearly 15 years to secure HP printers so it is a difficult and length process. I’ve been in the business for 37 years so I can be patient. Obviously we want to do it as quick as we can but it is difficult to take it away from the other guy.”
Admitting that Dicker Data “got lucky” in Australia following Ingram Micro’s well-documented SAP fiasco, Dicker accepts that such circumstances allowed the distributor to make serious inroads into the market which their channel rival has so far struggled to claw back.
“We’re operating in a numbers game, if you hit the numbers you’ll get the result over time but if you don’t then you’ll be screwed, it’s that simple,” he adds.
“The way I see it is our revenue is not too far behind Ingram Micro in the commercial space so I don’t see why we can’t replicate that here.”
In pursuing HP, Dicker naturally faces stiff competition from current distributors Ingram Micro and Exeed in New Zealand, but such is the nature of the channel veteran, he accepts that it won’t be easy.
“More vendors equates to more revenue and we are actively trying to bring across existing vendor relationships from Australia to New Zealand, and likewise, vice-versa,” he says.
“But even with Toshiba, we’re the company’s biggest customer in Australia and their longest standing partner but despite all this it still took a year to get the New Zealand deal over the line.
“And let’s not forget, they were the ones who threw the balls up in the air so yeah, you have to be patient.”
For Dicker the process in New Zealand will be no different to Australia; distribution is a master and slave relationship, and “we are the slaves.”
“It has worked like that since 1978 and I figured that out pretty early on when I first started in this game,” he says. “They come to us and want things done and we have to provide.
“We have to be better than the other guys and considering they are foreign multinationals in the New Zealand market, we have to respond and stay competitive.”
More vendors undoubtedly brings the need for more resellers, with Presnall sending a clear message to the channel that if “anyone wants to transact any of our vendor lineup then we want to do business with you and give you a great experience.”
Requiring no specific criteria or expertise, if Dicker Data are representing a brand in New Zealand, then under the leadership of Presnall they will be selling to everyone that sells that brand.
“It’s not rocket science,” Presnall adds. “Our role in New Zealand as a distributor is to make our number while keeping our vendors, staff and customers happy. Those are the basic requirements of any business.
“We’ve been very fortunate to have had the freedom to execute on this and do what we believe is the right thing for the business in New Zealand.
“The Dicker Data guys have built up a lot of IP and knowledge over the years and it is a great opportunity for us to leverage that where possible. We are backed with heaps of resource so for New Zealand, everything is upside following this deal.
“Dicker Data is a relatively flat organisation so everything is only a phone call away, we don’t have to jump through hoops to get anything done and given the whole industry is undergoing huge change at the moment, being agile gives us a massive advantage.”
Presnall, held in the highest regard by his new Australian colleagues, believes the key for Dicker Data moving forward in New Zealand is to maintain a level of flexibility that allows the company to “change before you need to change” while continuing to reinvent itself amidst great change in the Kiwi channel market.
“We’ve got to stay on top of our game,” he adds. “The same is not enough because the competition will leap frog us which is why we play to our strengths.
“The strength of our business evolves around the relationship we have with our customers and we have better relationships that the other guys because we are always there for them.
“If everything is straight forward then fine but nothing ever is in this world and that’s why we are available at the other end of the phone, or at your door, to come fix an issue in minutes rather than days.”
Such is Presnall’s determination to maintain his company’s notable high-levels of customer service, that Dicker revealed no plans to keep vendor product managers offshore in Australia, serving as a regional point of contact rather than in-country.
“That wouldn’t work,” he says. “I’ve had a house in New Zealand since 1999 and I know that approach wouldn’t work. Our operations are on the ground and that’s where our support system will stay.
“Technically, we’re happy to run New Zealand as an independent operation in that respect. We will allow Phil to go to market how he sees fit as we have complete faith in the Kiwi team.
“Of course we could run it out of Australia but it doesn’t make sense too, so we won’t.”
Capturing the mood of the company across Australia and New Zealand, Presnall believes “vendors want a local presence.”
“People in New Zealand like you to turn up on their doorstep and provide the lowdown on latest products and help solve problems, no matter how big or small they are,” Presnall adds.
“The face-to-face element is huge for us in terms of how we engage with our channel and that won’t change.”
As reported by Reseller News’ sister publication ARN, Dicker Data is on track to crack AU$1 billion in revenue for the financial year, following two strong first quarters that are expected to continue into Q3 and Q4.
Currently targeting AU$30 million profit in sales, Dicker remains confident that collectively speaking, the company is “going to get it.”
“That’s our target across the two entities,” adds Dicker, banishing the notion that when it comes to New Zealand, he is merely cashing a cheque at the end of each month.
“Of course we have certain revenue targets in mind but as I keep repeating, we’re not trying to blend New Zealand into Australia or ask them for monthly reports etc. They know what they need to do so we’re happy to let them get on and do it.”
With the ribbon now cut and business as usual, Dicker Data in New Zealand looks set to banish the stereotype of Australian interference, and given Presnall’s philosophy and go-to-market strategies, it would appear a certain Mr Dicker is right to leave him to it.