The ICT channel must adapt to business partnership model

TechLive Future Channel
(Image: Mediateam)

TechLive Future Channel event hears that deeper, longer term relationships are necessary to aid CIOs

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22 February 2019 | 0

The information and communications (ICT) channel must adapt to the new reality of business partnerships, if they are to meet the needs of today’s CIOs.

That was a clear theme running through the presentations and CIO interviews at the TechLive Future Channel event in Croke Park.

A range of vendors, distributors and CIOs all emphasised the need to ensure that an ongoing, frank and open communication is maintained, as the market shifts to ever more service-based consumption.

Norman Newell, sales director with distributor Renaissance, said that managed service providers often tend to have less engagement post sale.

He argued that it is vitally important to maintain relationships in this case, by making contact with customers and ensuring they know they are being looked after and that lines of communication are open to them. 

“You must put a process in place to make sure that, on a regular basis, you are in touch with that customer,” said Newell.

Newell was speaking in the context of what he termed the necessary transition of value-added resellers (VAR) to managed service providers (MSP).

He argued that those VARs that are unable to make that transition risk a dwindling business model and ultimate extinction, as less organisations wish to buy products or services on the old annual or biannual licence basis.

Renaissance, he said, had developed a five-step programme to help VARs make the transition, allowing them to adapt to the new procurement and consumption models.

The steps involved are:

  • Change strategy
  • Package products
  • Financial solutions
  • Automate processes
  • Find the audience

This is a major change for any organisation, said Newell, with many implications, not least of which are financial in nature.

Organisations have got to be able to talk to the banks, said Newell, and the various people involved with the financing of the company to realise that there is going to be a step change, as they need to transition in to a monthly, quarterly income scenario.

“Your financial processes and systems will have to change to accommodate this,” said Newell.

The evolving relationship between businesses and their channel partners and service providers was further explored in conversations with CIOs.

David Cadenhead, CIO of CityJet, said that change was being seen across all sectors.

“I think it has changed, not just within the airline industry, but it is changing in all industries really, in the methods of engagement.”

David Cadenhead, CityJet

The way that business now acquire technology, said Cadenhead, has gone beyond the old processes. Though there is still some place for them, new engagement models are now being adopted he said, that focus more on the entire lifecycle of the solutions and services, and how they embed in the client organisation. This requires better, closer relationships and greater understanding from vendors of the clients’ business and sector.

Vendors have got a lot better at identifying and focusing on product solutions, rather than just a technical system, said Cadenhead.

This was echoed by Ashling Cunningham, CIO of Ervia, the utilities semi-state.

“Historically, our vendors provided us with product which we implemented, and we paid a support and maintenance fee on an annual basis. We also had services provided to us, predominantly ‘body shopping’ — people came in on an as-needed basis and then they left.”

Ashling Cunningham, Ervia

This led, said Cunningham to a vendor list of more than 300, and less than desirable levels of communication.

Vendor relations were not good, she said, we weren’t communication effectively and there tended to be a blame culture when things went wrong. 

In 2016, Cunningham said a new approach based on the model developed by Peter Kraljic, was adopted that led to new classification of vendors as strategic, key, tactical or niche.

This, she said, facilitated a review process with meetings on a quarterly basis to share strategies, business and corporate plans and asking vendors and partners where they feel they could add value. 

A key element of this process was also to ask the vendors where else, outside of IT, they are speaking to the organisation. Cunningham said this was vital in being able to understand the engagements and provide IT with a clear picture of what was going on.

Cunningham said there was also a significant upskilling internally to be able to operate this system and improve vendor engagement, develop the longer term relationship and allow frank discussion when things were suboptimal or going wrong.

A similar methodology was adopted within the Health Service Executive (HSE), said Jane Carolan, national director, Health Business Services, HSE. Carolan said that as the service was modernising, its level of funding relative to its size meant that it needed better vendor relations for closer working and better leverage of vendor expertise to achieve its goals.

Jane Carolan, HSE

“We were able to leapfrog some of the learning that other organisations had done, which really was ‘why do it yourself when there are experts out there who can deliver for us’. It was about developing the right partnerships with the right people, knowing what our internal resources should be — what we are good at and what we are not — and where possible buying in a service and managing that relationship,” said Carolan.

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