Technology distributors and resellers that want to survive the current turbulence in the global and South African economies should seize the opportunity to improve operational efficiency and customer focus in the months ahead. Those that adapt fastest to the realities of a downturn in the market will emerge as strong players once the shakeout is complete.
This is the view of Gary Pickford, chief commercial officer at Tarsus Distribution, who says that challenging market conditions offer an opportunity to create a more efficient business without compromising the customer experience.
“We’re looking at the current conditions as a rich opportunity to segment our customer base and strengthen the business using a range of levers,” says Pickford.
“Because we’re operating in an environment expecting negative to flat growth, we have taken steps to improve working capital efficiency, reduce debtors’ days, restructure costs and improve margins. These steps will not only help us to defend profitability in the short-term, but also to ensure sustainability in an increasingly competitive industry in the medium-term.”
Pickford says as global economies are negatively affected by the Covid-19 pandemic and pushed to adjust strategies to cope with the new normal, IT companies should not allow their course to be set by external events and stakeholders over which they have no control.
Instead, they need to look at the factors they can control – their customer experience, their use of credit, their cost to serve – and optimise them as far as possible.
“In the present environment, the goal for most companies is to survive in the shorter term without taking their eye off medium-term sustainability,” he adds. “It’s about protecting jobs and profitability, while putting the customer at the centre of the business.
“We are looking past industry and economic conditions to focus first of all on the customer.”
Pickford says that resellers and distributors alike need to look carefully at what customers need and deliver it at an appropriate cost to serve. “We’re spending a lot of time understanding what our partners and their end users need in order to perform better,” says Pickford.
“We need to do more than just get the right stock to the right place at the right time and at the right price without fail.”
Key to meeting this objective is to maintain rather than degrade our focus on our customer value proposition, he adds. “We can’t unilaterally take costs out when this will impact on our customer service objectives,” says Pickford. “Rather than looking at areas that affect the customer experience, we have looked at efficiencies derived from our digital transformation.”
One of the keys to thriving in this market, says Pickford, is to deliver a better customer service, offering solutions rather than just product.
“This approach enables us to work closely with our reseller partners to reduce cost-to-serve while doing a better job of jointly serving the end user,” says Pickford. “The benefits of a more solutions-oriented approach flow from stronger long-term relationships with the end user customer and higher margins.”