Chasing innovation: how partners can create a new customer agenda
Business Management

Chasing innovation: how partners can create a new customer agenda

Customers are craving originality, in the pursuit innovation, differentiation and growth, placing the channel at a crossroads.

To capitalise, partners must create a new identity - driven by unique IP, tailored solutions and customer-centric offerings.

In a move away from traditional practices, a new-look ecosystem is emerging to accelerate such innovation through the cloud, redefining the conventional supply chain in the process.

Today, partners must be builders and creators, delivered through a lens of specialisation in a market consumed by cloud.

“Customers are driving innovation in New Zealand,” observed Warren Nolan, chief commercial officer at Rhipe. “New Zealand has always been at the forefront of innovation, think of the virtualisation uptake, and cloud is no different.

“The market is varied in that one day partners are delivering enterprise-grade solutions at a cloud level, but then also servicing smaller businesses at the same time.”

For Nolan, such a wide-ranging customer spectrum is to be expected, with small enterprises - housing up to 20 employees - playing an important role in the New Zealand economy.

Specifically, and according to data from Statistics New Zealand, small enterprises account for 97 per cent of all enterprises, spanning 487,602 businesses as a result.

Coupled with the large accounts dominating the enterprise space and partners are delivering on the promise of cloud-centric innovation at both ends of the market.

“And partners are not just talking to the IT manager anyone,” added Nolan, suggesting further market disruption. “The channel is no longer just talking to the CIO or CTO, they are engaging with the sales director or CMO, or perhaps even the CEO.

“Throw in the CFO as well, because they are across the change in business model and consumption methods, from CAPEX to OPEX.”

Consequently, and in light of changing market dynamics, Nolan said that customer expectations are “high” and research is “extensive”, driving innovation at break-neck pace irrespective of size, sector or stature.

“Customers have an expectation of what they want, before they have even engaged with a technology provider,” Nolan explained. “This is an exciting time for the channel, partners must be innovative and dynamic while responding to customer demand.”

The common consensus across the country is that cloud is now “deeply embedded” into New Zealand organisations, creating a need for partners to not only advance technology conversations, but seek different levels of end-user engagement.

“There are lots of different buyers to contend with in the market today,” said Shaun Coutts, business development manager at Dynamo6, a cloud specialist firm based in Hamilton.

“These different business units are trying to spin out solutions and build return on investment in isolation, without going through the traditional routes of approval.

“This is a common occurrence in local government for example, in which multiple business units are going ahead and doing their own thing. While innovation is encouraged, this can provide a real challenge.

“Our role is to bring these different units together and encourage collaboration and partnerships.”

According to Derek Leitch - director of Emerging Technology Partners - the onus is now on the channel to “reach out” and find line of business buyers, in a bid to foster greater collaboration across the organisation.

“Customers are responding to this approach,” he said. “Because then you can go back to the CIO and IT department and help align the business towards one common goal.

“People, process and technology are at the heart of everything we do and customer experience covers all of those aspects.

“Innovation is taking over the conversation and as channel partners, we need to focus on delivering the benefits of this to our customers.”

In taking the conversation further, Grant Sweeney - managing director of AC3 New Zealand, formerly Bulletproof - believes that customers are already “coming forward” with new ideas and visions, triggering a need for the channel to keep pace.

“It’s now up to the partner to turn those ideas and visions into business outcomes,” Sweeney said. “Our role is to accelerate that process and demonstrate how it can be done.

“Yes, the market is very customer driven today but they are coming to us with challenges because they know we can help change processes or technology strategies.”

For Sweeney, partners are “well positioned” to build out solutions capable of quenching such a thirst for innovation, providing deep expertise is delivered from the outset.

“We want to increase the pace, we want to develop solutions and we want use smart developers,” Sweeney said. “But the technology piece is the main part, we want to integrate this innovation back into the business to deliver real benefit.”

Customer priorities

Amid frequent industry chatter, cloud continues to dominate the conversation among Kiwi customers.

Yet beneath the surface, at a deeper level, greater considerations are being made to drive value through the business with data at the centrepiece.

“Data is the new black, or the new oil, however you want to phrase it,” said Mike Jenkins, CEO of The Instillery. “But what is the most important aspect of the data and how can you leverage that in a business?

“We come in, take on a business problem and deliver value, and then move onto the next one. We keep delivering value but not just at the end of a five-year project, rather on a daily and weekly basis.”

Collectively, Jenkins acknowledged that the ecosystem as a whole must “change the way we talk to different markets”, citing a need to overhaul outdated terminology and industry jargon.

“We have to act as the translator from the business problem to which solution is best suited to solve that problem,” Jenkins explained. “We see our role as a partner in the up-skilling of our customers, it’s a co-pilot mentality.

“We want our customers to be able to fly their own plane and that’s the different type of approach that the industry requires.”

In assessing the changing customer priorities across the country, Zabeen Hussain - head of cloud at TIMG - said the conversation of today centres around transformation, and a need for businesses to gain competitive advantage in a challenging marketplace.

“But when we talk about cloud specifically, we take our customers through a process in which we identify their core requirements,” Hussain added. “This covers both cloud and data security, alongside the business continuity plan.

“We have to understand the importance of the data and execute in a way which benefits the customer.”

Yet despite a desire to innovate, and excel, through new technologies and solutions, customers in New Zealand still require advice and guidance.

“We have vast experience within the technology market and have been working with our customers for a long time,” explained Phil Martin, CEO of SAS IT. “But while some customers continue to push new ways of innovating, a chasm still remains.

“This chasm is between individuals and companies. We still see that some people actually don’t understand IT management, project management or process management. It’s an ongoing challenge around the education piece.”

As general manager of iT360, David Wilson said growth can be found through partnership, leveraging like-minded specialists to deliver customer value.

“The biggest focus for our business is around building partnerships to allow us to punch above our weight as a provider,” Wilson said. “We have a solid reputation and a strong customer base, and they are seeing us move into markets we have never played in before.

“This means we must quickly grow and adapt, but also partner up to ensure we expand as a business. There is huge value in creating a community to achieve this.”

Going deep

Today, building a deeper relationship with customers means more than merely implementing a Net Promoter Score system.

While satisfaction remains an important aspect of any partnership, the channel can no longer afford to view customers as a single entity, rather individual buyers with specific needs.

“We’re unique in that to a certain degree, we essentially service every customer in the country,” said Phil Goldie, director of One Commercial Partner at Microsoft New Zealand. “Customers can buy Office 365, or Windows 10 or Microsoft Azure, there’s a lot of choice in the market from Microsoft.

“So our conundrum is around how we resource ourselves to service everybody. That’s been a constant challenge over the last couple of years.”

For most partners, having too many customers would constitute as a good problem to have, a display of dominance in a market bursting at the seams with competitors.

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Yet for Microsoft, the issue is centred more around how to better maximise a diverse and disparate base of end-users.

“We’ve actually reduced the number of customers that we have direct relationships with in every market that we serve,” Goldie explained. “As the business has grown we’ve managed less and less customers.”

In New Zealand, Goldie said the vendor manages around 400 customers in total through direct relationships, down from roughly 700 customers 18 months ago.

“But as we’ve done that, our revenue has grown,” Goldie added. “Our revenues are growing faster because we’re managing less customers.

“And the reason for that is because we can have more meaningful partnerships and go much deeper as a result.”

Stemmed from a desire to drive transformation across all aspects of the Kiwi economy, Goldie outlined a Microsoft strategy at-odds with convention; against the grain and diametrically opposed to the traditional technology market.

“In theory, everyone wants to touch more customers but at Microsoft, we’re kind of working the other way,” Goldie said. “There are multiple levels to a customer relationship, the first of which is them simply buying some products.

“The second is around going a little deeper and leveraging more of the Microsoft stack, which will help the customer drive efficiencies in the business. Yes, as a vendor, we obviously want to utilise more of the Microsoft stack.

“The third level is focused on using technology to change a business, while the fourth is around changing an entire industry. We’re playing on the fourth level.”

At the heart of such an approach is customer experience, and a willingness to flip tradition upside down and back to front, disrupting users, businesses and industries in the process.

According to EDGE Research findings - profiling customers, partners, distributors and vendors across Australia and New Zealand (A/NZ) - 65 per cent of partners claim to be “ready and selling” customer experience, highlighting misalignment between channel expectations and market reality.

Because customers don’t agreement with such a statement.

Specifically, and according to findings, buyers want partners to “understand my customer”; “understand my business” and provide “deep solution expertise”.

“Not every customer is advanced and fully understanding of customer experience, which means we must align ourselves carefully in the market,” Goldie added.

“We service every customer and we cannot choose every customer experience, but we’re starting to become more deliberate in who we go deeper with.”

Specific to the topic of innovation, Jason Kelly - product manager of network solutions and procurement services at SecureCom - said challenges can surface through a lack of definition at end-user level, resulting in multiple interpretations and expectation levels.

“Innovation for a company is a better way of doing what they are currently doing,” he clarified. “The only people that can really innovate for a business is those within the business, they have to trust the process.

“We can help through providing cloud services, or an API, or a specific solution, and as businesses grow, our offerings must evolve.”

Taking the conversation further, Tovia Va'aelua, newly appointed as country manager of Rhipe in New Zealand, outlined Amazon in retail as a leading example of “innovation at work”.

“In a third-world country in which it takes three hours to travel 15km, suddenly a new experience is available through a new online retailer,” Va'aelua said.

“This experience allows you to pick and choose products, then have it delivered to you which is a whole new experience. And crucially, this experience gets transferred onto everything else.

“This isn’t just retail on retail. It’s retail on IT, retail on manufacturing, retail on everything. Therefore, businesses suddenly no longer have a choice as to whether they will transform or not because guess what, the bar has already been raised.”

Citing a local example, Va'aelua outlined the changing construction industry in New Zealand, an industry succumbing to transformation through technology.

“In construction, guys build relationships with the hardware store down the road,” Va'aelua explained. “They go in and pick their timber and that’s how they do things.

“But now, a younger generation is emerging and they don’t want to go down to the hardware store. Why would they do that if they can pick all the timber, screws and nuts on their iPad, and then just send someone down to pick up the order?

“So is the business driving change or the user? I think to some degree change sits with the end-user, that’s the real mentality which is shifting in New Zealand.”

New approach

In speaking as general manager of Lancom Technology, Waruna Kirimetiyawa, acknowledged a Kiwi market which has “changed significantly” during the past five years, driven by a change in buying behaviour.

“Customers no longer have to spend a massive amount to be able to try something out,” Kirimetiyawa said. “In fact, most businesses don’t work that way at all today because of a new influx of leaders.

“CEOs today are coming in and looking to consume three or four cloud applications, wanting to get them up and running quickly. And they expect polished applications and a high level of quality.”

Kirimetiyawa recalled an era in which a “couple of wire frames” would suffice for most end-users, yet with 2019 around the corner, Kiwi customers are becoming more demanding.

“They want to consume technology in small chunks and for a very short period of time,” he explained. “Take something for marketing, something for engineering and something for sales - across various different departments small teams are working with technology.

“Customers want to engage with partners that show experience and have essentially ‘been there and done that’.”

Kirimetiyawa said the hallmark of a solid technology partner lies in its ability to challenge customer thinking and question the status quo, an approach which continues to resonate across the local market.

“Customers want you to challenge them,” Kirimetiyawa insisted. "They want you to question whether they should be going down a particular path, they require that feedback.”

Echoing Kirimetiyawa’s observations, Tony Mitchell - country manager of New Zealand at Fusion 5 - also cautioned against all-out transformation, insisting that transitioning away from legacy technologies takes time, resources and investment.

“Fail fast is one approach but there’s still a lot of six, nine and 12-month projects in the works which requires a huge amount of ongoing work,” Mitchell explained. “We absolutely encourage innovation but at times, we are almost bringing things back to reality and correcting the innovation of customers.

“You’ve really got to be able to walk before you can run in some cases otherwise the business will trip up. We’re very structured when we turn on our intellectual juices because our focus is delivering world-class solutions to our customers.”

Challenges around speed of innovation are furthered hampered by a fear of change, cited as a common cause for lack of growth by Devin Deen, director of data and analytics at Enterprise IT.

“Through our approach, our business continues to grow in New Zealand,” Deen said. “We’re punching above our weight but we’re still encountering challenges around people and how they use technology systems.

“The business as usual process has slowed innovation because on the face of it, humans don’t like change too much.

“In fact, people are resistant because they are scared. Customers are scared of change and scared of the influx of new technologies, such as big data, machine learning and AI.

“Their natural reaction is to therefore do nothing, which is the biggest inhibitor to future growth in New Zealand.”

This roundtable was in association with Rhipe and Microsoft.

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