Channel lacks basic business planning practices

Study of North America-based VARs, service providers and integrators shows lack of business acumen is holding channel firms back

Sloppy business practices within VAR organisations are ultimately costing them, their vendors and their distributors money by holding back their potential, a study in the US has revealed.

Research specialist The 2112 Group questioned a broad range of North America-based VARs, service providers and integrators for its State of the Channel Business Acumen report, finding 25 per cent of those questioned have no business plan in place to help drive future growth.

This is ultimately hitting them in the pocket, the report claimed, because many resellers do not have the knowledge or experience to craft strategic visions and execution plans to drive their businesses forward.

In addition, The 2112 Group found that 38 per cent do not set sales objectives and revenue goals, with 40 per cent failing to make long-term strategic plans and a whopping 65 per cent lacking a business development plan of any sort.

On the positive side, 53 per cent of firms said they had a formal growth strategy in place.

The biggest challenge for IT vendors, cloud providers and distributors, the report claimed, is getting more productivity out of existing partners.

Worryingly, the report predicted the problem will only get worse as the evolution from tin shifting to services-led sales continues, because value is derived from how technology can improve a customer’s performance, rather than saving money on new equipment.

In conclusion, The 2112 Group said channel firms need to focus more on instilling basic business practices to provide structure to their business operations.

To download the full report click here.