IT channel businesses struggling to stay relevant and cope with customers’ constantly-evolving demands while maintaining their own efficiency and profitability can implement business transformation models with the right approach.
The pace of change is only getting faster and it’s certainly unlikely to slow down anytime soon. Channel businesses need to build agility and responsiveness into their operating models, focusing on their own transformation even as they help customers on their transformation journeys.
We have identified five steps channel businesses should take to help them understand the changes that will help them compete more effectively.
1. Build a business case
Before re-tooling the business or making significant strategy changes, channel organisations need to ensure they fully understand their customers’ needs as well as how they can transform to meet those needs. That means building a business case for transformation. Businesses should see how their existing products, services and capabilities map to existing customer needs; they should then investigate how future customer needs may require a different set of products, services, or capabilities. The business can then build a case to support investment that puts the company in the right position to become a trusted adviser to its current and potential customers.
2. Develop a transformation strategy
A solid plan of attack is essential before committing to any major investments. For business transformation, the first step in the process is determining the firm’s goal. This could mean improving operational efficiencies, expanding investments or establishing strategic partnerships. Significant changes also require a fair amount of time capital and patience. Simply stated, there is not one-size-fits all strategy for change. Some are big, some are small and the available options are virtually endless.
3. Reflect, strengthen and plan
A successful channel business transformation requires careful planning, effective management and periodic evaluation. The strategy must include a clear definition of roles and responsibilities, with each task assigned to someone with time and talent to complete the mission effectively.
4. Choose the right team
Change is often met with resistance and it’s optimistic to think that every employee is equally qualified to help drive transformation. Employees and management teams that have successfully shepherded business transformations in the past are more likely to help current initiatives succeed. Ideally, business leaders should choose flexible, optimistic employees to take a greater role in the business transformation process. They will bring their more reluctant colleagues along with them.
5. Expect to pay for change
The biggest challenges for IT services businesses often involve capital. Even with the best business transformation strategy, companies will have to consider what changes they can afford to make. For example, it can take a year or more before revenue reaches breakeven when building a new managed or cloud services practice. Consequently, businesses should plan for an infusion of cash to acquire new resources, compensate for reduced productivity during the transition, invest in training and education, and boost marketing and branding.
Rather than blindly reacting to market changes, IT services firms should carefully consider the pros and cons of a transformation. There are risks inherent in any new business initiative or venture; the channel business must take a clear-eyed approach and only make the changes if they are likely to deliver strong results within an acceptable timeframe.
It’s important to remember that, regardless of how much time went into planning and how much money was funnelled into the organisational transformation, its success depends on execution and the adjustments made along the way.
Moheb Moses, ANZ Community Director, CompTIA
