DEALER VIEWPOINT - Tomorrow's people - Shah
The latest move towards a merger or acquisition involving CHS Electronics and Metrologie is no surprise. Compared with the Compaq and Digital merger deal, this one may only raise a few eyebrows.
Current business trends, in an industry awash with acquisitions and mergers, are leaving people wondering who they will be working for tomorrow - without changing jobs, that is.
If we take a step back and look at commerce in general, the IT industry no longer feels unique in the changes it is experiencing. Look at all the activity in the City caused by the various mergers and acquisitions of late.
As the IT industry approaches maturity, the major suppliers are going for globalisation and the smaller ones are opting for specialisation.
This is the reality of today's business environment - it has been brought about by mergers and acquisitions, deregulation and new market technology.
In the face of these forces, any commercial organisation must continually renew itself.
What has happened to the role of the traditional dealer, shifting boxes with pile 'em high, sell 'em cheap tactics?
The majority have either wound up or refocused, added services and re-emerged as global players. Evidently, you can't maintain revenues with diminishing margins.
Globalisation certainly has its merits - it creates presence, increased market share and sheer mass. And the trend is set to continue as the larger players swallow up the smaller ones.
So, how can the modern-day dealer survive in today's market conditions, competing with direct suppliers, hybrid distributors, mail-order organisations and large stores? Add to that the following other problems:
- Diminishing market share and margins;
- Increased customer demands and threats that customers will go elsewhere if you don't bow to their needs;
- Product and price changes - merely keeping up with them is a full-time job;
- Holding stocks which will certainly diminish in value with time;
- Other vendors' additional accreditation schemes;
- Suppliers constantly shipping what they want to, as opposed to what you ordered.
Sounds depressing, doesn't it? But there's no need to despair just yet.
There is still plenty of scope to address the needs of commerce.
As we have established, the PC business is still buoyant, so business is booming for those who are good at what they do. The services industry has made extraordinary leaps, almost doubling in size within the last five years.
The key to success is the art of turning the above problems into solutions.
You have to strike a balance between keeping your customers happy and exceeding their service expectations.
The ultimate goal is to achieve further sales and services orders from the same customers. If you don't make money from supplying the hardware, you can certainly benefit from making it work for your customers.
Dealers need to be fast, flexible and responsive to cope with all these changes and customer needs. It is certainly a full-time job for principals to keep abreast of things.
The channel is full of groupware, databases, the internet, the millennium, EMU and networking projects, with Windows 98 and NT5 to keep up the momentum in the short term.
There is a successful future in the emerging and exciting products lurking around the corner. Remote access, video conferencing, e-commerce, document management, the network computer, voice activation and recognisation, interactive media, virtual reality and robotics markets are all predicted to grow substantially in the next few years.
Which horse will yield the best return? Unfortunately, choosing the option with the most potential is pure guesswork.
Whatever emerges as the front-runner clearly depends on circumstances and there will be odds on favourites. The judgement can only be based on the decision of the individual principal as to what they feel comfortable with. Having made that decision, the key factor from then on is dedication. Lack of this factor is the reason why so many projects and companies have fallen by the wayside.
All this confirms is that with the right skills and deliverable quality for your customers, there is a lot of potential for the channel.
Ashwin Shah is managing director of Hemini.