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When the coalition Government publishes its comprehensive spending review on October 20th the axe will finally fall on public sector cuts. Ahead of the big day, Comms Dealer assessed the channel’s mood and gauged the challenges and opportunities linked to swingeing cut backs in Government spending.
E
very department other than Health and International Aid has been
asked to plan for savings of between 25-40 per cent. Efficiencies, states the Treasury, must be found even in ring fenced budgets. However, this belt tightening could play into the comms channel’s hands because solutions that cut costs and boost productivity should be in greater demand.
Any public sector plan will include an overhaul of IT provision, but will the investment in new projects which offer long term gains get the green light? Tom Maxwell, Dealer Sales Director at Nimans, urges the channel to be confident in the face of cuts. He commented: “The recession has already had a dramatic impact on sales throughout the industry and this is the last thing resellers need, particularly those with a strong public sector client base. However, despite all the doom and gloom I believe new sales opportunities will still open up.”
There are strong signals that public sector bodies will be open to arguments that new technology is part of the solution to bringing down spending. RIM is sponsoring a headline debate at the Conservative party conference called ‘High
Tech, Low Cost: Tomorrow’s public services’, at which Oliver Letwin, Minister for Policy, will deliver a speech. According to the Guardian, Tory-led Suffolk Council is planning to outsource everything bar a few hundred core jobs. Presumably, if it is taking the extreme step of selling off its libraries to management companies, it must have considered hosted comms.
Talking comms “We’ve met with the Government several times to talk about how you can use mobile and unified communications to drive productivity up and costs down,” said Vodafone’s Enterprise Director, Peter Kelly. “We think we have amazing capability to bring to the public sector, through the likes of home working, flexible working and the ability to reduce facilities through shared work spaces.”
Maxwell added: “Resellers that can offer managed services may find themselves a lot busier over the next 12 months as local authorities may be forced to abandon or scale back in-house services. This will have an impact on their telecoms and communication departments. Ultimately, large government projects will be reduced but one of the biggest cost savings in situations like this is always manpower. So resellers
will be able to step in and take over telecoms divisions if they are closed down internally.”
In any sector right now, cost is king. Leon Mangan, Sales Director at Siemens Enterprise Communications, noted: “Any public sector or commercial organisation is looking for hard returns on investment as they are facing unique financial squeezes in the spending review,” he says. “Siemens and our partners will have to focus on selling not just the productivity gains, but also cost reductions with a rapid and clear proof of RoI.”
The feeling of cautious confidence is reflected at all levels within the channel. Many companies are still planning for growth and actively bringing in new staff. “I am recruiting at the moment,” stated Wayne Cartwright, Managing Director of Manchester- based Communicate Better. “And I will continue to do so over the next 12 months. We have taken another three people on this month so far in an effort to boost sales and grow the business. My business plan hasn’t changed. It may just take a bit longer to get to where I want to be.”
And there’s no plans to slow down at one of the fastest growing companies in the business, Daisy. “We currently have a sales force
of 180 across all channels,” said Sales Director Karen Ullah. “In order to meet our new business sales targets for the next six months we are now recruiting 28 more sales staff across the country.”
Winning formula If there’s a formula for success, it’s mastering the transition from telecoms supplier to business advisor. Go back to all your clients – whether public and private – and work with them to manage downsizing or expansion, and help them to
consolidate their cost bases and service providers. “My marketing strategy is quite simple,” says Cartwright. “We are getting a lot of success by cross selling our converged suite of products into our existing base. This makes the customers a lot more sticky and less likely to churn.”
Cartwright says that even though several large
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22 COMMS DEALER OCTOBER 2010
customers are cutting back on the number of extensions they lease or not renewing their mobile handsets at the end of a contract, he’s still grown his business and retained customers by selling in more services. Stuart Baikie, Managing Director of Total Telecom, goes even further. He says that developing a specialism with a particular client base has been a saving grace through the worst of the recession, and will continue to be the strategy through whatever comes next.
“We made a decision two years ago to communicate better with our existing customers,” he said. “No- one really knew what was going on, or how bad things were going to get, so our view was that it was pointless going out there hell for leather trying to win new customers. We made a big point of doing a lot more with our existing customer base, talking to
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