VAR business decisions: Investing in a new IT practice area

Read up on IT solution providers' decision-making processes for investing in new practice areas.

It should go without saying that a solution provider's existing and potential accounts will drive the evolution of its services and solutions.

But solution providers encounter plenty of pressure from technology vendors to invest in new IT practice areas. That's either because investment by solution providers would help meet vendors' sales quotas or because the vendors need more channel partners out there, evangelizing a new sort of technology."

Given the substantial investment usually required to ramp up in a new IT practice area -- not just in technical skills but in management processes, pricing and sales messaging -- pressure from IT vendors is exactly the wrong reason to take on a new technology line. Even if a vendor is promising market development funds to help.

"You can't allow a vendor to influence business decisions, although some solution providers may find it difficult to compartmentalize this conversation," said Tim Hebert, CEO of Atrion Networking Corp., an integrator in Warwick, R.I. "Design around the client first, and then put the vendor into the decision," he advised.

Every employee who has contact with customers should be on the lookout for potential opportunities, according to Hebert, and that means keeping them abreast of your company's high-level strategy and mission. What's more, strong research, gleaned from credible market research firms and trade sources, should inform VAR business decisions, he said.

"Based on all of those factors, you can make an informed decision about whether or not to get involved," Hebert said.

Baroan Technologies in Elmwood Park, N.J., meets with all of its clients on an ongoing basis to gather this sort of market intelligence. Those discussions, some of which happen quarterly, are called BizTech Reviews. They cover industry trends and customer concerns, said Guy Baroan, founder and CEO of the solution provider.

"This is the best opportunity for us to understand what it is that they need [and] if something is missing," he said. "We focus not just on technology, but on how we can help their business."

Ask your team, "Do we have to be first?"

Another major thing to consider carefully is how much marketing, evangelism and internal development it will take to make a new solution or services line profitable.

Can your company stomach the time it takes -- usually far more than just one quarter -- to train employees, ramp up internal support processes and educate prospective customers? Can you learn from the mistakes or successes of other solution providers that are making a similar investment?

More on VAR business decision resources

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"When you are the first person to develop a practice, you can't rely on the experience of others," said Jane Cage, former chief operating officer and now a consultant to Heartland Technology Solutions of Joplin, Mo. "[Technology solution providers] have a culture of being peer-driven."

It comes down to how much risk your company's management team is willing to take on. But some new practices don't have to be completely revolutionary or require a substantial financial investment to be worthwhile, solution providers said.

One example is the managed print services that Baroan Technologies now offers to handle printer maintenance and supplies orders. This was an operational function the company's clients were talking about, but not something customer management teams felt warranted a huge internal resource commitment. So, Baroan Technologies opted to represent Xerox's branded services in cases where customers really want to outsource printer management chores.

"This is an unbelievable option that makes it easy [for us] to address [customers' needs]," Baroan said. "I don't want my clients talking to anyone else about what they need."

Do you have an internal champion?

The success of a new IT practice can also come down to whether or not someone can lead the charge internally, said Jennifer Mazzanti, president of eMazzanti Technologies, based in Hoboken, N.J.

In some instances, this may be the same individual who originally advocated a new service or product line because he or she will have the right passion to inspire enthusiasm with both employees and customers.

Alternatively, it can be someone who has a good sense of how to create the well-defined business processes and to develop the resources your company will need to execute, she said.

"You want the experience to become seamless, so don't forget training, and keep everyone in close communication," she said.

This was first published in March 2013

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