The Automation Game - How partners can boost internal processes

L-R - Barry Assaf (Nexon); Mike Morgan (Insight); Jim Stockwell (iasset.com); Eoin Coghlan (CCNA); Josh Watts (Harbour IT); Andy Hurt (NEC); Scott Frew (iasset.com); Dan Danielli (Arrow); Ronnie Altit (Insentra); James Henderson (ARN); Lucy Knowles (iasset.com); Nick Russell (Katana1); Cam Wayland (Channel Dynamics) and Richard Mitton (Atlas Plato)

As new technologies and business models flood the market, the channel is struggling to keep pace.

With an increased need to drive profitable growth — while increasing customer engagement and retention rates — partners remain challenged to eliminate time-consuming internal processes that escalate costs and drain resources.

Such change requires a shift in focus however, and a reassessment of in-house processes and systems.

Because as cloud adoption increases, recurring revenue models rise in tandem, creating system complexities capable of stalling future growth.

Yet old habits die hard in the Australian channel, with partners advocating automation externally, as arduous internal processes slowly churn in the background.

“That’s what partners advertise to customers,” Atlas Plato CTO, Richard Mitton, acknowledged. “When delivering managed services, partners outline everything they are doing for the customer but underneath there is a lot of scrambling around.

“That’s when you’re trying to ensure nothing is expiring and that everything is in working order. The channel is a trust game because the customer trusts that they will be properly serviced and looked after.

“And while that is true, there’s a lot of hard work in the background and running on treadmills to keep the engine running.”

Akin to the swimming swan analogy, the channel is projecting a picture of professionalism and reliability to the customer, but paddling like crazy just beneath the surface.

Exemplary on the one hand, chaotic on the other.

In short, the channel remains challenged by an inability to capitalise on driving profitable business growth, while increasing customer engagement and retention rates.

In a market made up of varied transaction sizes, proactively managing renewals ahead of expiry dates is often back-breaking work, as the laborious battle to boost revenue while ensuring customer compliance lingers on.

With partners now slaves to spreadsheets, the result is a channel submerged in paperwork and drowned by data.

“There’s so much complexity associated with vendor systems that partners are expected to comply with,” Katana1 managing director, Nick Russell, added. “It’s great to operate in a vacuum and build your own tools but this approach creates complexity and challenges further down the line.

“Vendors expect partners to plug into their own systems yet most partners deal with multiple vendors, hence why scrambling in the background is commonplace.

“But the problem goes deeper because we’ve had vendors call our customers when a renewal is coming up to ask whether our customer would like to renew with us. So, if you don’t have visibility over your services, someone can come in and beat you to the punch.

“Visibility is crucial to get ahead of the situation because on occasions, you might not even realise that a maintenance or renewal was approaching.”

Manual

As end-users actively pursue digital transformation strategies, underpinned by a desire to reduce costs and boost efficiencies, the channel is waiting in the wings to offer strategic advice and guidance.

Assuming the role of trusted advisor, the consultative sell is in vogue with customers open to change and crucially, happy to pay for it.

As outlined via EDGE Research - spanning partners, vendors and customers in Australia - digital transformation strategies are underway and gathering momentum, with 45 per cent of partners “ready and selling” across the country.

Somewhere in the process however, the channel still managed to miss a beat.

Because as pilot initiatives evolve into mainstream digital deployments, and customers reap the rewards of a refreshed technological approach, solution providers are left with the legacy of burdensome back-end systems.

With customers aligning to partners who have embarked on internal digital transformation strategies, such an approach hinders the channel’s ability to offer tried and tested recommendations, while also hampering the delivery of integrated sales and solutions.

Because in the digital age, partners still remain grounded by manual methods.

“It’s very much a manual process for our business,” Matrix CNI managing director, Deni Saupin, said. “But if we forget something, we might not find out until four years later when the contract expires.

“And if you add personnel changes into the mix then that creates a lot of problems for partners. We don’t receive much help or support from the vendors but that’s not a valid option anyways as those systems are typically not very accurate.

“We are a small company and due to a lack of resources, we are very manual in our processes.”

Driven by the primary benefits of cost reduction and improved productivity, partners can also improve customer relations through replacing repetitive processes with software-supported activity.

“Manual processing is a huge problem in the integration space,” CCNA commercial director, Eoin Coghlan, added. “We are outlining customer solutions and roadmaps, and how they might be impacted by new vs. legacy technologies, and manual systems makes this task more difficult.

“But also from a sales point of view, partners must identify the products coming in under renewal, alongside assessing when vendor end of life policies kick-in.

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“This can completely leave my business exposed because this function isn’t always managed by the partner.

"Because of this, the business of our customer could fall over due to an end-of-life on a server or storage solution. This might not be our fault but either way, you are held responsible as a partner.”

Despite a clear indication that challenges occur, the majority of partners are not able to reinvent business processes with any sense of urgency.

“It’s always difficult to integrate new technologies because expense is the biggest challenge,” Nexon managing director, Barry Assaf, said. “How the business adapts to this change is crucial because if you utilise a new platform, how will your organisation react?

“We have our own tools internally but if we were to utilise a new offering in the market, this would require us to cross-train people which is expensive and time consuming. The main issue is that we don’t have an internal IT team and that all of our focus is on the customer and delivering an outcome.”

Running complex business functions through manual processes is not consigned to smaller market players however, with organisations of all shapes and sizes hamstrung by a lack of internal automation.

“We’re dealing with multiple vendors and each one deploys different systems, which are changed constantly,” Insight vice president and managing director of Asia Pacific, Mike Morgan, added. “We’re throwing more and more people at our operations team but now we’re realising that this might not be the best practice.

“In our industry, prices and margins are not going up so the only place to look for efficiencies is in-house. But if we keep throwing people at problems we will struggle to resolve anything.

“Most businesses see operational change as a big box that they would rather not open. Because once it’s opened the problem pulls other parts of the business into the mix and before you realise, the situation turns into a program of work.

“It’s much easier to throw your support behind an idea that is tangible, quick and has return on investment unlike a potential Pandora’s Box scenario.”

Illustrating a wider issue spanning the entire channel spectrum, partners remain blocked by a failure to maintain an effective balance between running legacy systems with utilising innovative technologies.

“We have the same challenges,” Optus head of ICT, Mike Kearney, added. “Businesses also now have the added complexity of not only stepping into a complex environment, but taking on management of cloud subscriptions in addition to licensing and maintenance.

“The reality is that if your business is not heading towards automation and if you haven’t carved out a part of your workforce to deal with that, then you could face problems in the near future.”

Looking outwards, challenges also arise when managing customer environments, with a lack of visibility preventing partners from fully understanding end-user systems and therefore the risks associated.

“The hardest challenge we face is understanding where a business is at today, never mind where they want to go in the future,” NEC Australia director of sales and solutions, Andy Hurt, added. “As an MSP, we’re not taking over a blank sheet of paper, customer operations are already established and well entrenched.

“But we need to carry out an audit to assess the risk, renewals and complexities and determining that risk is one of our hardest challenges. We analyse the risk to our business when taking on large managed services contracts but it can be difficult to understand the customer environment.

“It’s a complex and manual exercise and we need tools to help us through this process. It’s yesterday’s technology doing tomorrow’s work.”

Automation

As Australia advances at pace towards a digital future, the channel must maintain market momentum alongside, through the modernisation of systems and processes.

No longer can a partner be weighed down by legacy, yet still expect to compete.

“New partners are smaller and are not burned by legacy,” Channel Dynamics director, Cam Wayland, said. “They can adopt a whole range of new tools and platforms and become more automated.

“Partners operating across the mid-market are feeling this pain more than most because they know they need to automate, but it’s a painful process. They know change is required but they don’t have the resources to focus on themselves and make the change.

“It’s getting to the point that the more successful a partner becomes the bigger the problem is as they don’t have time to work in the business.”

According to Wayland, change is predominantly being driven at boardroom level across partner organisations, led by a realisation by senior management that operations can be drastically improved through automation.

“We are making big bets over the next 6-12 months to focus on the back-end of our business,” Harbour IT COO, Josh Watts, added. “But this change needs to be driven from the top down.”

In practice, the common view from partners is that consolidating multiple processes represents a complex undertaking, creating business headaches and long-lasting issues.

But low hanging fruit does exist in the form of a range of quick-fire wins.

“Efficiencies within the channel can be applied in multiple ways,” iasset.com CEO, Scott Frew, outlined. “If you take renewals as an example, on average, it takes 22 steps and more than eight independent systems to process a renewal quote the traditional way.

“Or take cloud contracts. Many vendors still rely on manually populating spreadsheets to calculate usage and process their monthly Billings.

Considering the vast amounts of data cloud consumption brings, this can be a recipe for disaster.”

Launched in 2009, iasset.com was created to address the inefficiencies of the renewals process of Distribution Central, increasing the distributor’s renewal rate from 40 per cent to 90 per cent within six months.

In 2018, iasset.com continues to evolve, through designing advanced cloud engines to drive channel efficiencies, serving a global customer base and managing over $10 billion in assets in the process.

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“We could never impact the price of a sale because manufacturers or general market dynamics dictate that,” explained Frew, who spearheads a team with over 70 years of combined channel experience.

“The only way to make more money out of a sale was to drive costs down and improve efficiencies.”

According to Frew, the strength of the platform lies in the automation of a renewals process, backed up by the ability to build accurate installed base information to drive greater efficiencies across the organisation.

“Efficiency is a core value of our business,” Insentra CEO, Ronnie Altit, observed. “As a services business, you can’t increase your rates in the same way that you increase your salaries so everything comes down to efficiencies.

“But the challenge the channel faces is the ‘we’ve always done it that way’ mentality. It’s an industry problem and finding a pain point that is so significant is key, because that is what will trigger a change.

“You can’t sell a solution to someone if they don’t believe they have a problem yet improving partner efficiencies is crucial.”

Echoing Altit’s assessment of the industry, iasset.com vice president of sales, Jim Stockwell, recognised that deeper levels of awareness are necessary to articulate the benefits of pursuing automated internal strategies.

“Everyone encounters the same problem but getting the message to resonate is key,” he explained. “There’s certainly a willingness to adopt an engine such as iasset.com but before we reach this stage, it’s staggering how little a managing director or CEO knows about this aspect of their business.

“The consequences of not renewing result in a lack of customer satisfaction and lost opportunities to drive revenue growth. But automation is in place to address those problems.”

Operating as a specialist network integrator across Australia, Matrix CNI has been in business for more than 15 years, with customers across education, health, government and enterprise organisations.

Since 2017, the provider has started taking on support functions internally, sparking a discussion around the added value of automation.

“We’re not selling TVs here,” Saupin said. “Our customers expect us to tell them when their service has expired and advise them to buy more - that is our role and our responsibility now we have brought our service capabilities in-house.

“Because if something goes wrong then guess what? It’s all on you as the provider. This has triggered deeper discussions around how we better service our existing customer base.”

From a supply chain perspective, iasset.com also allows distributors to take control of valuable data via a single platform, in a bid to boost revenues by proactively processing renewals.

“Business leaders are guilty of spending more time doing as opposed to thinking,” Arrow ECS ANZ general manager of sales, Daniel Danielli, added. “In distribution, data provided through the iasset.com platform offered actionable intelligence for our business.

“The engine goes so deep into the data on a daily basis which helps us cut through the numbers to provide more value back to the channel.”

Opportunities

In holding the front-line position, facing the customer on a daily basis, partners play a critical role in supporting the deployment and upkeep or new technologies and services.

Coupled with ensuring IT environments are both compliant and secure, the tangled web of assets continues to expand as product lifecycles across hardware and software stack up, while cloud assets explode.

“The complexity of managing an IT environment is growing not shrinking,” Frew observed. “Partners have thousands of assets to manage and struggle to ensure each and every one is compliant and secure for their organisations.”

During nine years of operations, iasset.com has evolved from being a small application custom built for the needs of one company, to housing a dedicated team of software developers supporting multiple customers across the global technology channel.

Targeting partners, vendors and distributors, the cloud-based software-as-a-service (SaaS) platform has also been built to manage hardware and software maintenance renewals, alongside cloud consumption contracts.

With 2018 now underway, Frew said the engine can help partners grow transaction values and sustain customer engagement, in addition to implementing win-back campaigns and keeping customers compliant.

“Partners are not isolated islands,” Frew explained. “This is an ecosystem with upstream and downstream suppliers and everyone is in this together.

“The more you embrace the iasset. com engine, the greater competitive advantage partners can have in the market.

“Every business owner should spend some time in the day stepping outside to look back into the business. You’re building a product and that product is your company, so what are you going to do to make that product growth faster and become more successful?

“It’s very easy to get dragged into the business, it happens to everyone, but it’s important to take a step out. When you remove yourself and look back into the business, that’s when you kick-start the innovation process.”

This roundtable was sponsored by iasset.com. Photos by Christine Wong.