Digital Transformation and the Channel

digital transformation


Digital transformation (DX) has evolved from simply being a buzz word to a reality for any business striving to remain competitive. As organizations explore how to interpret and undertake digital transformation, the technology industry is presented with a significant opportunity to drive, guide, and profit from the digital future. And this potential will only continue to increase as the drive toward digital transformation gains momentum.

We are currently at the starting block. Even in today’s mobile and connected environment, the reliance on legacy technology hinders the CIOs' ability to successfully embark on a digital transformation. Research from Forrester suggests that CIOs spend an average of 72 percent of their budgets on existing IT concerns, while only 28 percent goes to new projects and innovation.

There is massive potential for the channel to ride the wave of digital transformation for the foreseeable future. Yet among the hot topic of digital transformation at channel conferences, webinars and events over the last year has been mostly focused on the benefits of digital transformation for business customers. Little discussion addressed the necessity for – and path to – realizing the same changes within the channel itself.

How can the channel undertake its own process of digital transformation? 

Analysts expect that customers will soon prioritize suppliers who have undergone their own digital transformation and are therefore capable of providing consultancy and strategic guidance through the process. Vendors will also expect partners to adapt their businesses to demonstrate their capability to break down silos and provide customers with integrated sales and solution delivery.

There are three initial strategies that can help the channel dip its toes into the waters of digital transformation: 

  1. Move to a subscription-based model
  2. Invest in the right kind of staff
  3. Enhance the customer experience with automation
1. Move to a Subscription-Based Model 

It is commonly accepted that cloud subscription and consumption usage is the (present and) future of IT delivery. The cloud is quickly maturing, as demonstrated by the 70 percent of Red Hat survey respondents who have a planned investment focus on cloud infrastructure in 2017. 

As evidence of this trend, VMware announced last month that it will make more of its products available as a service, anticipating that within three years some customers will do all of their VMware purchasing through a subscription model.

We expect that the cloud will play a critical role in the move to digital transformation, enabling organizations to be more agile and scale as needed, fast.  

2. Invest in the Right Kind of Staff

Organizations seek partners that can advise and assist with their digital transformation journey. This has created an opportunity, particularly for VARs, to provide additional consulting services and become trusted advisors. But to make this shift, they must review their entire organizational structure and be smarter about their human resources.

For example, replacing staff handling legacy time-consuming business processes - as this can be automated (with the right tools), and invest in more skilled resources (ie. consultants/specialists) that will help drive revenue for their business.

3. Enhance the Customer Experience with Automation

McKinsey suggests replacing labor-intensive activity with software-supported activity, either through full automation or through improving the productivity of individual workers in their jobs. Not only does this entail significant cost savings, but it also enhances the customer experience as it speeds up lengthy processes and enables greater efficiencies.

The term “customer experience can mean many things for the channel. It can refer to the interaction amongst organizations within the channel (vendors, distributors/aggregators, VARs, MSPs), or to the product or service end customer. Ultimately, the former always impacts the latter. That is why it is so important for the channel ecosystem to run as smoothly as possible - and automation is essential to achieving this.

Let’s consider how efficiencies can be applied within the channel.

Renewals: On average, it takes 22 steps and more than 8 independent systems to process a renewal quote the traditional way. Sound crazy? Absolutely!

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. teams with channel organizations to apply automation to their sales and renewal processes, consolidating data from ERP, CRM and other sources and automatically generating quotes based on defined business rules and requirements. This automation eliminates the administrative and data management work associated with processing renewals, drastically reduces the potential for human error, and maximizes reoccurring revenue.

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