An ever-increasing array of new products make it easy to focus on the technical side of the IT business, but true success will come to solution providers who focus more on changing their business models to meet future requirements.
That’s the word from Ryan Morris, principal consultant of Morris Management Partners, who took the stage at the Xchange Tech Innovators conference to tell solution providers the thought process and steps needed to find the business model that best suits their customers.
Xchange Tech Innovators is hosted this week in Las Vegas by Everything Channel, which also publishes CRN.
Morris said that having a “cool” product is nice, but only if one can sell it, and that just being a smart technician is no longer good enough for success.
What is necessary, Morris said, is for solution providers to understand that the business world today is characterized by uncertainty in terms of how to tackle such issues as the slow economic recovery and whether and how such new technologies as cloud computing will impact customer choices.
Successful solution providers will embrace uncertainty by moving to learn how to grow before their peers do. “If you want to grow better than anyone else, you have to embrace growth and find how to grow while everybody else is trying to figure out what is happening,” Morris said.
However, that does not mean solution providers should look for a first-mover advantage. “That doesn’t happen in an uncertain economy when (business model) innovation gets absorbed into everything else that is happening,” he said.
New technologies such as virtualization and cloud computing should not be embraced just because they are good for solution providers, Morris said. “It’s not important what everyone else does,” he said. “What matters is what’s right in your own market.”
Solution providers cannot just wait for the economy to get better, or for vendors to tell them what to do, Morris said.
Instead, he said, they need to ask themselves some simple questions, such as: which business model should I be operating? How can I get my business moving in that direction? How will I thrive as I move in that direction?
There are people, including vendors, who have a vested interest in believing that a solution provider has only one valid business model, Morris said.
However, customers have a variety of needs, including someone to help them understand the technology, provide information about the value of their technology, help operate their technology, help manage their technology, help optimize their technology for their business, and do all the things a traditional solution provider did, he said.
“We ask end users what they will pay for,” Morris said. “And they tell us, they will pay for all six . . . Don’t think you have to do all six. You can do any in isolation, as long as you can provide value.”
Morris also outlined five steps solution providers can do to manage change in their business.
The first is to stand up and publically tell customers and employees where the business currently is and where it is going.
The second is change what employees do based on what was publically announced as the business’ new direction.
The third is to provide the skills, training, resources, and mentors to show employees they are invested as individuals in the change process. “Change management begins by giving people the needed skills,” he said.
The fourth is to change the mind set of the employees by getting them involved in changing the business processes. “Because if they aren’t involved, they don’t own (the change),” he said.
Finally, solution providers need to show employees what is expected of them once the change happens by defining the plan, setting metrics to show how it is progressing, and track the performance of the change.
Once that change happens, solution providers need to understand their business in detail in order to thrive, Morris said.
“You must understand your business, your P&L (profit and loss), your routes to market,” he said. “You need to define your billing procedures down to 15-minute increments. You need to know you are not just another point in someone else’s business, but instead that you are a business.”
Bradley Van Peursem, CEO of iTelework, a Seattle-based provider of tech support, IT services, and VoIP phone systems, was surprised how focused Morris was on the business of being a solution provider.
“It was a better presentation than I thought it would be,” Van Peursem said. “I’m always afraid that consultants will be too far removed from the actual business they are talking about.”
Morris did a good job of explaining the process a solution provider much go through to change their business to meet customer needs, Van Peursem said. “He makes me realize I need to be a better manager,” he said. “I see the looks in the eyes of my employees, and I realize they are not getting what we are doing.”
