Putting the “VA” in VAR

Maybe the time has come to seriously reconsider the SI/reseller business model. The days of being aligned with one primary vendor are numbered as market transition continues. As the top vendors all seem to have similar features, SIs are looking for ways to drive UC solutions they don’t fully understand while maintaining control of their clients. Vendors are pursuing blended direct sales strategies that increasingly cast SIs as fulfillment partners. This tug of war is a result of the channel losing its value-added relevance to both vendors and enterprises.

Having the name of your preferred vendor on the side of your company truck today is becoming a symbol of days gone by. Loyalties can become liabilities. The reasons for this are twofold: SIs typically make lower margins on integrated solutions and fewer enterprises are demonstrating vendor preferences. And if they are stating vendor preferences, they are more likely to be cloud-based solutions. UC capabilities are becoming commodities. All the more reason to ditch the truck or at least get it repainted. The point is, are you positioning your SI company as a “client-focused solutions” or a “the best solutions [vendor] has to offer” organization? Which do you think enterprises are more interested to do business with? Which model gives you more control of your future?

In Dave Michels’ article about the Amazing Shrinking Channel, he discusses the need to “put the value-add back in VAR.” To summarize Dave’s article: “the channel is shrinking, enterprises are buying less, prices are dropping, and models are changing. There will be fewer dealers tomorrow than there are today.” So, the challenge for the SIs is to evolving their position within their client base to become a trusted partner in applying UC solutions to their enterprise business processes. Of course, this is the ultimate goal for SIs. Becoming a trusted partner is a function of the people, leadership, and operational processes to support your strategic plan. And as we have discussed, all three of those areas need to stay current with the market in order for the SIs to survive. The SI philosophy should be, nothing from the past is sacred. Everything is up for review.

So, how do we do this? The basic definition of value-add varies, but generally centers on:

• What is driving the business need?
• What is supporting the proposed UC solution?
• What does the SI provide above and beyond the hardware and services provided that realize the goal of the UC solution?

To achieve these goals, many vendors require certification and technical support standards to be met by the SIs. The vendor’s reasoning is that in forcing SIs to develop certain technical skills and overall capability, the more likely that the customer will be happy, the more likely the project will be successful, the more likely the solution will work, and the more likely that the vendor’s product will be associated with a positive experience. As SIs move away from a vendor-centric business plan to a more customer-focused orientation, they will have to own, create, and evolve their standards to match the diverse needs of their clients. This is an early step to becoming a client-focused organization.

Beyond technical training and certifications, positioning and developing extended relationships within client organizations is next. The sales processes used by the SIs are the foundation for delivering the positioning messages and developing the relationships. As business process consultants, your organization must support the greater understanding of the key drivers for your client’s business. Then your team needs to do the research and the legwork to create UC solutions to improve their business processes. And you’re still not done. The value hypothesis that you present has to have enough detail and credibility to get your first meeting. If this works, you are on the path of discovery, diagnosis, and solution design with the client.

To do this, here are some key principles you should follow:

1. Look at everything through the eyes of your client’s customers
2. Be collaborative – involve as many people as you can in the discovery and diagnosis of the challenges
3. Be data driven – it takes the emotion out of problem solving
4. Uncover the root causes of the problems
5. Be open minded to new ideas and surprises
6. Simplicity over complex solutions
7. Focus on end-to-end process
8. Listen vs. talk
9. Be operations-minded: create implementations strategies and measure key outcomes
10. Communicate within your organization and with the client
11. Research and immerse yourself in your client’s business
12. Drive focus on action plans and key activities

Your clients are looking to you to leverage UC technologies to save money, maximize productivity, and contribute to their enterprise profitability. It is your obligation to match your capabilities with their needs. Your definition of value-add needs to extend beyond those of your vendor’s and become what defines your organization in your marketplace. This is what I believe success looks like for the future of SIs. 

1 Responses to "Putting the “VA” in VAR" - Add Yours

Art Rosenberg 7/2/2012 8:32:32 AM

Orrin,

Good observations!

However, A key perspective of what SI customers are really looking for in a nutshell is adapting to operational "change." The biggest areas of change for IT will be twofold:

1. End user mobility and BYOD - Mobile UC and mobile apps

2. "Virtualizing" applications for both desktop and mobile usage from "clouds"

Even if new technology and implementations were free, customers will need help in migrating gracefully from what they used to do to how they will things in the new future of mobile, information access, online interactivity, and communication contacts ("collaboration").

What you describe are the ways for SIs to help the customers in the process of change, and, you are right in saying this has little to do with the vendors!