Too many VARs lack the solution-selling orientation increasingly necessary to remain in business and provide a reliable channel for manufacturers, according to industry trade association CompTIA.
To remedy the situation, the association is forming a committee of manufacturer representatives who will assess current VAR business models and make recommendations on how to successfully switch to a solution provider model.
CompTIA, which boasts 20,000 members in 102 countries, plans to put together a complete pallet of tools and resources VARs can use to make the necessary changes.
To start, the association just launched a Web-based tool that resellers can use to compare their business strategies and financial performance against a solution provider model of the industry's best performers, said William Vanderbilt, vice president of education and training at the Oakbrook Terrace, Ill.-based CompTIA.
"It is an assessment of a reseller's business model," Vanderbilt said. "It is based on data that has been collected from hundreds of solution providers."
Resellers who use the tool are asked 15 questions about their business model, covering key performance areas such as the revenue mix generated from services versus product, types of customers, organizational structure ,and whether sales representatives are compensated on commission or set salary.
Once all questions are answered, the Business Model Self-Assessment Tool immediately analyzes them and generates a score and set of recommendations on how to make the transition to a more solutions-focused model.
Asra Zaheeruddin, CompTIA's education business development manager, said the assessment tool was a direct result of a session the organization held in March with vendors to discuss the health of the reseller channel. Meeting participants analyzed the challenges and business requirements resellers are facing, and started discussing ways of how best to support resellers as they adjust to current market needs.
In a report released after the March meeting, CompTIA concluded that VARs operate in an increasingly complex business environment, in which the failure to make the transition to a solutions focus results in downsizing or going out of business, providing a less reliable channel for selling technology, and disappointing end customers, who get product-oriented answers when expecting business solutions.
Challenges faced by VARs that CompTIA hopes to help them address with collaboration from vendors include learning to sell consultatively, identifying and securing service opportunities, and managing expenses through variable cost models where applicable.
Zaheeruddin said the vendor committee CompTIA has formed will develop a framework to help guide VARs in the right direction with white papers and a host of other resources and tools geared to improving productivity.
The business assessment tool is accessible online at www.comptia.org/education. More than 100 resellers already have logged on to use the tool, which is free of charge, said Vanderbilt.
One of those resellers is Chris Redshaw, president of Future Vision Inc., of Raleigh, N.C., who said it took three minutes to access the tool and answer the questions. Future Vision has put a lot of effort in recent years into shifting from a product focus to a solutions and services model.
"I can see how this tool could be beneficial in assisting resellers transition to a solutions provider model," she said. "It is helpful to compare what we are doing to others in the industry, and of course we are always looking for ways to increase our profitability."
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