Aban­don old IT busi­ness mod­els

CRN - - CONTENTS -

VENGUSWAMY RA­MASWAMY Global Head, iON TCS

The year 2013 proved that cloud com­put­ing was no mere buzz­word. We have crossed the phase when we needed to ed­u­cate cus­tomers about the ben­e­fits of the cloud. To­day, cus­tomers look at the cloud as a valid tech­nol­ogy op­tion.

An­other trend in 2013 was the com­modi­ti­za­tion of mo­bil­ity. Mo­bile apps are fast be­com­ing a main­stream chan­nel for com­put­ing. Busi­ness ap­pli­ca­tions are in­creas­ingly be­ing ported to mo­bile, and in the process many ap­pli­ca­tions and busi­ness pro­cesses are be­ing re­de­fined.

Then there is the in­creas­ing im­por­tance of the so­cial data which has ac­cu­mu­lated on the In­ter­net. Spe­cial­iza­tions are emerg­ing in how to trans­late this data into busi­ness value, big data be­ing one such stream. Lis­ten­ing posts on the In­ter­net is a key de­vel­op­ment that feeds the true im­pres­sion of prod­ucts and ser­vices.

Learn­ings for chan­nels

For IT chan­nels, the key learn­ing lies in aban­don­ing old mod­els of the IT busi­ness. Sell­ing on-premise soft­ware with ex­pen­sive hard­ware is go­ing to hit back on chan­nel rep­u­ta­tion when there are clear cost-ben­e­fits as­so­ci­ated with cloud op­tions.

Cloud, mo­bil­ity and big data are all con­nected within a tech­nol­ogy ecosys­tem. Chan­nels need to em­brace this ecosys­tem and make a port­fo­lio of of­fer­ings. Cus­tomers to­day are more ed­u­cated and ex­pect time-proof so­lu­tions. This means a dif­fer­ent method­ol­ogy for sell­ing IT. Chan­nels need to lever­age part­ner ecosys­tems and li­ai­son, some­times at the cost of can­ni­bal­iz­ing their tra­di­tional ser­vices.

I would rec­om­mend two key prin­ci­ples for the chan­nels. First, align with com­pa­nies which are driv­ing a change in the mar­ket with ser­vices that ben­e­fit the cus­tomer’s cus­tomer. Sec­ond, re­mem­ber that the value to your cus­tomers is not just in trad­ing a prod­uct or ser­vice but in build­ing a niche value on top of what you trade.

Eco­nomic out­look

The eco­nomic out­look is cer­tainly good, and the IT in­dus­try will grow in tan­dem. While the eco­nomic growth rate has been slug­gish, there is a high de­gree of op­ti­mism. Or­ga­ni­za­tions are not shy­ing away from ad­ver­tis­ing, cam­paign­ing and spend­ing on tech­nol­ogy.

Tech spend is typ­i­cally be­ing driven by firms want­ing to in­crease their pro­duc­tiv­ity with­out in­creas­ing their work­force. At the same time, small firms are gear­ing to scale up, and are em­ploy­ing tech­nolo­gies such as ERP.

Chan­nels should align with com­pa­nies which are driv­ing change with ser­vices that ben­e­fit the cus­tomer’s cus­tomer. The value of­fered to cus­tomers is not in trad­ing a prod­uct but in build­ing a niche value

Mar­ket driv­ers

One of the most im­por­tant mar­ket trends that will drive the con­sump­tion of IT is the growth of in­ter­na­tional trade. Do­mes­tic firms are in­creas­ingly de­pen­dent on for­eign mar­kets. Some sec­tors like phar­ma­ceu­ti­cals are thriv­ing on above-60 per­cent ex­ports. Businesses driven by in­ter­na­tional trade are in­creas­ing the de­mand for IT so­phis­ti­ca­tion to stay con­nected with their coun­ter­parts and man­age over­seas op­er­a­tions.

The sec­ond im­por­tant trend is mo­bil­ity. Businesses have started see­ing mo­bil­ity as a means of fast de­ci­sion­mak­ing by re­main­ing in­formed. New gad­gets and apps are be­com­ing main­stream com­put­ing me­dia.

The next one is B2B growth. Small firms are look­ing be­yond ef­fi­ciency. They are also look­ing at bet­ter ways to con­nect with sup­pli­ers for bet­ter cost ad­van­tages. On the de­mand side, they are look­ing at al­ter­na­tive chan­nels to sell. B2B tech­nolo­gies and B2B chan­nels will be the next wave of busi­ness in­no­va­tion.

Chan­nel Op­por­tu­ni­ties

Tra­di­tional forms of com­put­ing un­der-uti­lize the busi­ness po­ten­tial we see to­day. Be­sides, cus­tomers are tech-savvy and ex­pect us to sug­gest time-proof so­lu­tions.

SIs need to de­velop com­pe­ten­cies to lever­age the ecosys­tem of tech­nolo­gies. The abil­ity to con­nect cloud so­lu­tions and de­vices into a chain of busi­ness pro­cesses is the key com­pe­tency in de­mand to­day.

The chal­lenge is in aban­don­ing tra­di­tional ser­vices which may get can­ni­bal­ized as chan­nels move up the value chain. But this chal­lenge is also an op­por­tu­nity.

VENGUSWAMY RA­MASWAMY

GLOBAL HEAD, ION, TCS

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