COMMS VISION CONVENTION
7-9 NOVEMBER GLENEAGLES Redefining the new Comm
In the ‘Age of the Cloud, the Customer and the Platform’, how will the Communications Value Chain adapt to these new business models? Ask Comms Vision 2012 Content Director John Chapman.
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ince 2006 the Comms Vision Convention has been helping the
directors of communications companies anticipate and plan for the technological and business changes that would affect their companies. In particular, over the last two years the focus on Business Transformation has helped organisations make sense of a whole myriad of developments at all levels of the industry. Now for Comms Vision 2012 we will make our boldest ever step by trying to define the new ‘Comms Value Chain’, in light of enormous changes in the buying behaviour of customers, the changing delivery model brought about by the Cloud and revolutionary business models that challenge our traditional value chains.
In any industry there are usually two value chains, the overall chain that links all the organisations involved in the delivery of the product or service to the end customer and then there is the internal value chain within each organisation that creates their distinct competitive advantage. In the communications channel the overall ‘Comms Value Chain’ has tended to be linear in format with reseller organisations choosing a small number of partners, usually one in each area
such as hardware supplier, lines and minutes service provider, application software company and maintenance provider. Often the only complexity within the chain is the use of distributors to ease access to next-day delivery of products, as well as ancillary products and services.
The relationships between partners in the chain tend to be governed by formal partnership agreements that define the terms and conditions of doing business and include accreditation schemes covering both technical skills and salesmanship. These accreditations are promoted heavily to end customers to establish the overall quality of the product or service and the credibility and competence of the delivery model.
Within each channel organisation management teams tend to use the Porter Value Chain model, whether consciously or unconsciously, to ensure they create their competitive advantage when selling communications solutions to their customers. This model is geared around managing the relationship with suppliers, ensuring internal operations, process and procedures support the delivery of products and services effectively to the end user, and that after sales support is ‘best in class’.
Sales and marketing is the cornerstone in this model ensuring that the quality of products and services and the reputation of the company are promoted aggressively to secure new business and expand the company.
The current ‘Comms Value Chain’, based on these simple structures, has worked relatively successfully for the last 25 years ensuring a healthy channel and some very successful businesses. It has been able to accommodate and support the evolution of new technology offerings, the entry of new vendors and providers as well as the development of new business practices. However, for the first time the confluence of three major business trends is challenging the overall ‘Comms Value Chain’ and at the same time making organisations re-evaluate their own internal value chain in terms of how they create their competitive advantage.
These three new business trends are considered to be so influential they have all had the words ‘the Age of’ attached to them in articles and books trying to define what they are and their likely influence on traditional business models. The first of these business trends and the one most communications channel companies are already
John Chapman
At Comms Vision this year we will make our boldest ever step by trying to define the new ‘Comms Value Chain’
trying to grapple with is the influence of ‘the Cloud’. The reason why ‘the Cloud’ is so important to the comms channel is that it changes the traditional delivery mechanism of the industry, opens the market for new competitors and changes the economics model.
Being able to deliver a solution without the need for large capital outlays and almost with no delay in switching on the service, switching it off or changing supplier challenges both the business model of a traditional company and the
way they build and maintain their customer relationships. ‘The Cloud’ model also removes the barrier for entry for new competitors and allows vendors and service providers to bypass channel partners if they wish and deliver solutions directly to end users.
For most comms channel companies however it is the economics of the cloud that are most challenging. As well as adjusting their business model to accommodate recurring revenue rather than capital sales, they are already finding that ‘the
44 COMMS DEALER AUGUST 2012
www.commsvision.com
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