Like it or not, we all have preferences, misconceptions and preconceived ideas about names. Whether it’s people, suburbs, businesses or brands in their own right, we place a lot weight on a name. When the new Yellow Pages arrived on the weekend, I got to thinking about what an aged medium it is. And how all those companies who had specifically named their business in order to appear in the front of each section were faring in the age of Google and online search. The Yellow Pages wouldn’t be my first port of call to find an IT reseller, but it did get me thinking about naming conventions in the industry.
Stories by Jenna Woolley
One of the big challenges in the New Zealand market is the relative lack of big deals. When they do come up they are fiercely contested. The going is tough for large proprietary vendors and multinationals. It is harder still for resellers and the channel. One of the greatest challenges is resellers finding themselves up against their business partners. New Zealand was once the domain of the “channel model". Multinationals like IBM, Microsoft, Oracle and SAP supported a growing channel and reseller community. Now, multinationals are going direct to clients more often and coming into direct competition with their channel. So how do resellers compete? For resellers wanting to improve their strike rate in this area there are some key points to keep in mind. Differentiate This is one of the easiest things to say - and one of the hardest things to do. But, if you can’t pin point why the client should choose you, the client won’t be able to either. As a reseller, it is nearly impossible to differentiate solely based on product. You need to clearly outline what it is you offer that no one else in your space does. This will help you decide which work to bid for and how to approach the customer. Price realistically There will always be price pressure in deals, especially competitive tenders. But clients also need assurance that suppliers will stay in business. Undercutting the competition or selling at a loss is rarely a winning strategy. Price competitively, but bear in mind your actual costs. Partner Large pieces of work often go to large service providers because it’s perceived that they have the size, depth and breadth of skill to deliver the work. A reseller can replicate this through partnering with carefully selected partners. These can be structured as long-term or project based relationships. Either way, choosing partners that have complementary skills and products is a must. Where possible cultural alignment a good thing, as is a diverse customer base. Pick your battles As a reseller, one thing that should be kept in mind at all times is your relationship with your primary vendors. It’s a competitive market, so by all means compete, and play to win. But bear in mind that aggressively competing for business may satisfy short term gain. However, getting offside with vendors can prove damaging long term. When it comes down to it, you can afford to have one lost deal, but can you afford to have one angry vendor? Resellers that want to be successful at winning big business need to be a step ahead of the rest. Create a strategy not only for your business but also for taking on big deals. This doesn’t have to be a long and exhaustive process. But getting your team internally to agree on a vision, some goals and areas where you can and do differentiate will give you a more effective sales proposition. There are others already making headway, so if you want to be active in this space, get your team together and start planning.
One of the more contentious issues around the all of government procurement scheme is the debate over deals going to local or multinational companies. History tells us that within government, the majority of contracts go to multinationals for a variety of reasons, including scale and the ability to generate buying power. But as New Zealand companies grow and are able to compete in terms of scale, we still see the lion’s share of contracts going to multinational companies. And there is a lot of industry protest against this.
Inhouse, outsourcing, multi-sourcing, discrete outsourcing ... For a long time, the industry has been divided in its view of outsourcing. Some aren’t in favour of it at all, some are, and there has been exhaustive discussion and comparison over which type is best. We have seen monolithic engagements such as those at Telecom, Westpac and Fonterra, and we have seen outsourcing in its simplest form with desktop or software support fiercely contested. And the end goal? I suppose it has been to achieve certain objectives, almost all of which are operationally focused.
Consolidation means many things to different people. But it appears for most to conjure thoughts of uncertainty, change and redundancies. Have we become too cynical about the role that this fundamental market phenomenon has to play?
For service providers in New Zealand, 2010 certainly has a more robust feeling about it than 2009 or even 2008. However, are we really emerging from the recession, or are we simply viewing the market through rose-tinted lenses?