Baillie didn’t mince his words in telling Walters that he had a problem and needed help fixing it. Walters was sold and joined Tech Pacific as commercial sales director in May 2002. In order to rebuild confidence with regional resellers that had voted with their wallets and abandoned Tech Pac, Walters and Baillie set out to meet them and listen to their concerns.
“They were exciting times. Kerry’s idea was for the two of us to go out together and find out what was wrong so we could fix it. I’ll never forget how bruised my chest was from the first round of customer visits around Australia in June and July,” Walters said. “Resellers were very harsh in their criticism but they were honest and that was what we required.
“We made practical decisions quickly and delivered on what we said we were going to do.” This included removing minimum order fees and launching its AustraliaWide program to re-engage regional SMB resellers. Six months later, Baillie and Walters went out visiting the same resellers for an update on their progress and were greeted with warm handshakes instead of fingers in the chest. The strategy of empowering staff throughout was clearly working.
A new world order
Over the next couple of years, Tech Pac established itself firmly at the head of the Australian distribution table. Global giant, Ingram Micro, had been in the market for a while now following its purchase of ERA and ITG but had struggled to make the most of its scale across Asia-Pacific. In November 2004, it completed the purchase of Tech Pacific for $700 million and local IT distribution had a new superpower.
“I think the timing [of Baillie’s arrival] was probably bad for Steve Rust and the crew at Ingram,” Walters said. “If Kerry had come in a year later, they would have had a lot more momentum but we had increased our sales by 66 per cent over two years from a big base of $1 billion. That shut Ingram out to a certain extent and they decided the best option was to get the chequebook out. It also gave them a much more strategic play in the huge Asian growth markets.”
Although the newly merged company was flying an Ingram Micro banner, Steve Rust and Matt Sanderson were the only two senior executives that came from that side of the fence.
“The cultural change wasn’t very significant because it was mostly the old Tech Pac senior management team, we stayed in the same premises, we kept Adonis [Tech Pac’s ERP system] and we kept Tech-Link [Tech Pac’s website],” Walters said. “We tried to limit the impact on our customers and vendors but banging two big companies together that had been competing led to some interesting times in the next few months as people jostled for position.”
