For businesses of any size, collaboration is nothing new in the channel. Companies working alongside each other will always be commonplace, whether it’s a logistics relationship, a 24/7 partnership providing end-to-end solutions, or the delivery of financial or admin support.
As a result, trying to shape a company into one that operates entirely self-sufficiently from other channel companies rarely works. Developing a skill-set or channel provision that would be more efficient and easy to manage through outsourcing is a no-brainer, especially as the end-customer’s appetite for a widening remit of services increases.
While there are many in the IT channel that have the resource to invest in adding these varied solutions to their portfolio, it can still place a strain on time and financials, with the ability to launch and test a new service – within the customer’s desired timeframe – frequently proving difficult. Therefore, it’s much easier to engage with other channel entities who specialise in delivering these services.
In a channel landscape where financial pressures are always present, research shows that over a quarter of the revenue in a channel business is generated through the utilisation of skills from other companies. The channel has always taken a glass-half-full approach to delivering an enhanced, customer-focused service; it’s no surprise therefore that the number of these partnerships are forecast to increase within the next year.
The exact needs of the customer must be adhered to; if they require a service that its current channel partner(s) cannot directly offer, they must work to deliver this though inter-channel collaboration, ensuring the customer does not become disillusioned with their partner. Out-of-the-box solutions are no longer viable; customers want a tailored solution that meets their ultimate business objectives, not where they are currently.
Due to the on-demand nature of the IT channel, the need for channel firms to provide an increasingly flexible service, adapting to the way in which customers consume services, is crucial. Businesses no longer want to be tied down in long-term fixed contracts which gives them little option to scale up and down. Within the channel, this has largely been facilitated through an outcome-based service delivery model.
It is clear that existing and new-to-market providers need to assess how they can adapt and operate, whilst the more ‘traditional’ vendors must develop their proposition. This could potentially change the way the business deliver in-house developed services or when they are reaching out to potential partners. If businesses achieve this change and continue to grow, it may leave them with no option but to enter into increased partnerships with other companies.
The chances of an organisation thriving by delivering a one-stop-shop suite of solutions is rare. They must identify the core services that they can continue to deliver to a high standard, while looking at those solutions that can be outsourced to strategic partners, offering this is a white-labelled service to customers.
There has however been some scepticism within the channel when it comes to channels embracing collaboration. Just a third of channel companies in partnerships are comfortable with informing customers that some of their services are being delivered to them through a third-party. This reluctance can be due to the fear of appearing weak, uninfluential to others or not keeping pace with customer demands by developing services in-house.
Customers will rarely baulk at their channel partners entering into partnership with other companies; it will ultimately help them to offer a more rounded solution. As a result, collaboration should continue to be embraced as a positive concept, as should total transparency.
In order to fulfill their agreed Service Level Agreements (SLAs), it is strategically more beneficial for channel organisations to enter into multi-vendor/technology partnerships utilising existing skills within another company. Channel organisations should never forget their aforementioned core services; focusing on delivering these to a high standard, while entering into partnerships to offer extra solutions, will enhance their reputation and positioning within the market.
In addition, if the outsourced solution is an area in which a core IT channel partner has never operated within, this will only help to give them a competitive advantage when securing and retaining new business partnerships.
This has been strongly echoed within industry research, suggesting that over half of IT channel leaders believe that their customers would be happy with channel suppliers collaborating together to deliver services, if SLAs were still met, reflecting the growing appetite for an increase in collaborative channel support-based services, in delivering tailored packages to customers.
Although most businesses like to pride themselves on developing solutions in-house, a flexible service delivery model is becoming increasingly common for businesses; in-house solutions doesn’t necessarily mean they are advantageous when compared to outsourced alternatives. Providing measurable benefits for both the organisation and the customer, collaboration is undoubtedly the best way for channel companies to deliver outcome-based services to customers.