Today most VAR owners are saying with a sigh of relief that they have survived 2009, are glad that it is behind them and are looking forward to brighter days ahead. While our economy is not out of the woods yet, many believe 2010 will be more promising than 2009.
However, we unfortunately all too often examine the impact the economy is having on our businesses through a single lens, that of our customers. Are my customers willing to resume purchasing my goods and services? Do my customers consider me their trusted advisor or am I just a transactional supplier or provider? While it is reasonable to look at our model through a “Customer” lens, it should not be the only lens we use to examine our business model.
The missing lens to which I refer is that of our vendor. It is prudent to ask ourselves what about our Vendor? Where are they headed in their channel strategy? Are we developing net new business? What about providing true value in their supply chain? Or are we simply acting in a fulfillment capacity?
A leading software company announced earlier this year that it was going to establish a direct relationship with its top accounts, thereby sending fear throughout their channel partners. The word for this type of action is Disintermediation. Disintermediation is the removal of intermediaries in a supply chain "cutting out the middleman". Rather than going through traditional distribution channels, which had some type of intermediary (eg: distributor, wholesaler, reseller, broker, agent, etc.), companies may now deal with every customer directly.
Many industries have time and time again failed to heed the warning signs of possible disintermediation (Automobile Dealerships, Travel Agencies etc…). Owners of these businesses did not adapt themselves to changes in their environment. Many have compared this to the aphorism of boiling a frog. The strategy is to start the cooking process by placing the frogs (us) in cold water and slowly turning up the heat up. The complacent frogs enjoy the warmer water at first. By the time the frogs realize what has happened, it is too late.
Only time will tell what the impact from these actions will have in the marketplace, but Business Owners need to exercise a healthy dose of skepticism when drinking the vendor’s kool-aid. Remember “It’s not what people say but what they do when no one is looking that counts”.
About the Author: Warren R. Turner is the Managing Partner of Cardinal Points Group. He coauthored and teaches “ Managing a Profitable Services Practice”. The course has been delivered to over 4,000 VAR and SP business owners in 25 different countries. He may be reached via email at wturner@cardinalpointsgroup.com or by telephone 770-913-0048.
