As customers’ requirements go beyond a single point product, partners are increasingly looking to scale up through solution selling. We take a look at how the regional IT channel can move towards this business model in the most effective manner.
The fact that the regional IT industry is moving towards solution selling is now becoming a known fact. Customers want answers to their business problems, solutions to make the functioning of day-to-day business as efficient as possible. And here is where partners can stand out by offering comprehensive solutions, which till then the customer may not be aware he needs.
Moreover, the technological landscape has transformed to a great extent over the last couple of years. Businesses are facing the challenge and complexities of emerging trends such as cloud, Big Data, mobility and virtualisation to name a few.
David Postel, Partner and Alliances Leader, Middle East and Africa, Red Hat, says, “Channel partners need to always look ahead and work to ‘adapt’ their skill sets and businesses to address the needs of their customers in light of the availability of new technologies and solutions, and changing business imperatives.
“The ability to place a finger on the market pulse and identify customer pain points is what should drive this adaptation. Customers rely on partners who act as consultants rather than box movers. One of the serious pain points that customers have today for example is shrinking CAPEX budgets. The channel can convert this into an opportunity by offering something new and different in terms of a new pricing model i.e. offer a subscription or utility-based pricing model.”
With customers hunting for best-in-class solutions, vendors will be compelled to deliver solutions that are more open, flexible and cost-effective.
“Channel needs to play the role of integrator, trusted advisor and expert. Partners can help bring old infrastructure and new together to deliver performance improvements, cut complexity, reduce management and maintenance costs, and enable enterprises to take advantage of all the latest technology trends,” Postel adds.
Jose Thomas, Managing Director, Bulwark Technologies, agrees that solution selling is one of the most noteworthy development among resellers to sell complete solutions, rather than standalone products.
“This is one of the most effective techniques to enhance sales opportunities starting from understanding the specific IT needs of customers, to providing a complete solution to a customer, resulting in a satisfied customer, and ultimately increasing sales opportunities.”
But do partners understand these benefits of solution selling and how many are moving towards this approach?
According to Vibhu Kapoor, Director, Channel Recruitment and Enablement for Middle East and India, Infor, the evolution of partners in the region from ‘box pushers’ to ‘trusted advisors’ has been more rapid just in the past five years than in the previous 15 to 20 years.
He adds, “This has primarily been because the channel players have seen the shift in customer purchasing process and decision making and have, to their credit, realised that if they do not adapt, they will be just another ‘has been’.”
Meanwhile, Postel believes that although many partners do think about scaling up to solution selling, in reality very few follow this approach.
“Most are still product-oriented. Resellers particularly are used to a box-selling approach. And the box-selling model isn’t really there anymore. Today what customers require is much more of a consultative approach. Partners need to be able to advise the CIO of how to structure projects, not just from a technology perspective, but also from a financial perspective.
“Resellers are also used to a licensing model for their revenues. But they need to understand that if they move away from a licensing model and create professional services revenue streams, that will not only benefit customers, but they will also be winners in the long term,” he adds.
What happens when a reseller adopts a more consultative approach is that customers tend to open up better and allow sales to qualify leads better.
Thomas says, “They trust and rely on such approaches, thereby helping partners align solutions to a customer’s requirement from a more holistic approach than pushing point products. Hence there are a significant number of channel partners who are adopting the benefits of solution selling and are moving towards that approach.”
But in order to be a true solution provider, there are certain challenges that the partners grapple with. The first problem is the need for partners to evolve the business model from reselling product to one that is focused on serving as a trusted advisor.
“The next challenge is around investment,” says Kapoor.
Partners will need to invest in hiring skilled human resources who not only have the technical know-how but are also business savvy, if they choose to opt for a solution selling approach.
“They will also need to continue to invest in skill building for these resources to make sure they stay up to date with the technology, market and industry trends, and customer needs.
“The third challenge, and this is closely linked to the previous one, is around lack of skilled resources in the region. Even if partners are willing to invest in resources, they struggle to find qualified resources or if they do, they are usually cost prohibitive. One way for partners to overcome this is to either train in-house resources or ‘import’ talent from places like India and Africa,” he says.
The biggest challenge does come down to the quality of talent because this makes all the difference for the success of a partner’s business in a value-driven business model.
Another challenge that resellers may face is the right kind of support offering provided by their vendor partners.
Postel says, “On the business side, it is important for vendors to engage with the most senior executives within their partner organisations and help them to understand that it is no longer prudent to go to customers and talk about boxes. They need to go into a meeting and be able to talk about financials like OPEX, CAPEX as well as technology.”
Over the next few years, we can expect the trend of moving towards solution selling to continue within the regional channel. What will now matter more are the niches the resellers will carve for themselves. Customers are on the lookout for those partners who are experts in particular fields and can offer end-to-end solutions.
Kapoor adds, “Partners will focus on building industry or line-of-business domains within their organisation. In parallel, as cloud adoption in the region continues to rise, I also expect partners to invest in a cloud practice as they help their customers on their journey to the cloud.”
The concept of evolving into a ‘trusted advisor’ for a customer is not a new one, however, partners need to consciously make this transformation if they wish to capitalise on the opportunities that a value-driven business model have to offer.
