In the past, so called Value Added Resellers (VAR`s) or system integrators , with specialised knowledge of networking hardware , servers and even enterprise management software, could go on-site at a corporate, comfortable with the fact that they are selling their skills and techno-savvy. That was then.
VAR`s in South Africa are probably going through the most radical rethink in terms of their legacy product, operational and marketing strategies, than ever before. On the one hand, some are opting for the traditional business model of high volume, low margin, box dropping , competing with established retailing stores in this country and effectively fighting a losing battle, trying to combat ever increasing overheads and operational expenses in a commodity market.
For the specialist , niche market VAR`s, high-level technical knowledge is no longer a differentiator from the competition, but rather a de facto accepted norm, by CEO`s and IT managers of corporates in this country.
A number of these networking companies, have long since realised that product does not produce margin anymore and have shifted their focus to technical services. However , their competitors did exactly the same, hence the days of paying sky high salaries for MCNE/MCSE skills are long gone, as these qualifications became rampant. The emphasis therefore shifted again to "Consulting" with services such as project management, outsourcing , audits and migrations becoming the industry buzz words.
Unfortunately, the world of corporate IT has moved on again, with clients expecting VAR`s to use IT to engineer their business processes as opposed to a "silver bullet" solution. Currently, there`s no mystery to computerising business processes such as HR, Payroll, Finances, Inventory/Stock control and Messaging/email. And where the mystery disappears, so does the money!
VAR`s in the corporate channel in this country therefore need to realise that implementations with a technology-led solution are doomed for failure. You need to start with a customer`s business strategy to drive the technology strategy. Corporates in South Africa are more likely to purchase technology strategically and look to their VARs for more critical business-first functions, thereby solidifying a long term relationship.
The big challenge for for a VAR today, is to ensure that your company become the "go-to" source for a particular problem. Strive to become the market leader or dominant player and concentrate on three key issues:
Focus on a specific market space and identify a common, mission-critical problem
Develop a point of view
Develop an unique approach to the solution
Utilising the Apollo Method for Market Dominance, most VARs should be able to do this. Obviously named after the NASA mission , where they had to overcome various challenges to put a man on the moon, there are effectively 4 different stages.
Launch: Identify your customer needs and focus on that area. Develop and declare your company`s point of view. Do not try to be everything to everybody. A case in point would be e-commerce. Everyone is climbing on the bandwagon, but pretty soon it will be yet another commodity as client-server and a given in any company`s business model. In this case scenario, rather position yourself as a Web integrator focussing on supply-chain management. Here you have identified a need and delivered a classical solution where procurement over the Web will cut costs for a company.
Fire: Ensure that you are constantly promoting yourself via the media, key influencers and customers events to create visibility for your issue.
Navigate: True deliverables speaks a thousand words. If you can not honour your commitments, you are merely creating perception, not reality.
Accelerate: Leverage your momentum and constantly strive to enhance and improve your solution. Remember, your competitors sleep at night. Be ready to change your business strategy, whether that is product, marketing or operation, at the drop of a hat in order to stay agile enough in an ever changing marketplace. Believe in yourself, get others to evangelise your solution and ensure that that critical mass pushes you constantly forward.
In summary some critical advice for the VARs. In order for IT to align itself to business, ensure that your account managers and consulting engineers utilise the same language as the client. That means, cut the techie-speak and understand the client`s business processes.
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