The non-profit body says as part of embracing new business models, channel firms must optimise operations to maximise profits – and achieving operational efficiency requires “an unflinching examination” of how well, or not, operations run today, especially before taking the plunge into a new business model.
Moheb Moses, director, Channel Dynamics, and ANZ community director, CompTIA, said, “Most channel firms today acknowledge that transforming their business from hardware-centric reselling to a business model that embraces services and recurring revenue is not only the future, but should at this point be the present”.
“However, there are many moving parts involved in the transformation process, notably anything to do with business operations and process efficiency. And, in general, this is a difficult, laborious, expensive, and often frustrating undertaking.”
According to CompTIA, the main reason for this is that customers are pushing them in new directions.
“Customers have myriad choices today, including self-provisioning applications and services. And, as more customers grow accustomed to consuming established and emerging technologies as a service, channel firms will need to embrace the cloud, managed services, and business consulting acumen to deliver,” CompTIA suggests.
CompTIA says two related topics are driving transformation – declining profit margins on existing products and the need to embrace emerging technologies.
“Many of today’s new technologies, from artificial intelligence (AI) to virtual reality to blockchain, will require channel firms to develop new skills and new ways of doing business,” CompTIA says.
CompTIA cites an IDC report that by 2019, 40% of digital transformation initiatives will include AI services and, by 2021, 75% of commercial enterprise applications will use AI, and more than 90% of consumers will interact with customer support bots.
“The faster channel firms learn how to build a business around these emerging areas, the less vulnerable they will be due to weak margins on legacy products,” ComlTIA cautions.
Carolyn April, senior director, industry analysis, CompTIA, said, “As the channel turns to new business models, it’s more essential than ever that firms optimise operations for maximum efficiency to reap the full benefit of revenue intake. A company’s approach to operational efficiency directly impacts how well it maximises profits and transforms the business.”
April says that for managed service providers, data management has provided a way to move up the application stack beyond basic network and device management services, with many MSPs also aspiring to expand their capabilities into data analytics.
“The challenge for channel firms is that managing a data deluge is sophisticated, difficult work. At the very base level it requires investment in technical and business training, hiring skilled staff, and crafting new sales and marketing tactics,” April concludes.
According to CompTIA, “while company leadership can shout the merits of operational efficiency and productivity from the rafters, not much typically comes to fruition without the commitment of employees to the overall effort”.
“Knowing all of this, many channel firms have begun to formalise both the incentives they provide staff to improve and practice efficiency, and the metrics and tools they use to achieve goals and measure progress,” Moses says.