October 1997

Distributors Lead The Way In Telecom Integration

BY LAURA SKINNER

The marriage of these industries is creating a bounty of opportunities for purveyors of both technologies — telecom interconnects and computer valueadded resellers (VARs). In the past three years, revenues from the comput-er telephony integration (CTI) market have tripled, and are expected to do so again by the turn of the century. These revenues create unique opportunities for computer and technology distributors — opportunities to retain loyal customers, maintain existing supplier relationships, build on current product offerings, and develop new relationships with telephony manufacturers. These opportunities also present exciting prospects for technology resellers — both interconnects and VARs.

HITTING THE SWEET SPOT
A comprehensive technology distributor can assist resellers in targeting the right markets for computertelephony products. VARs and telecom resellers will most likely focus future CTI sales efforts on small and midsize businesses and the small office/home office (SOHO) market, which, in this age of telecommuting, is exploding.

Almost 97 percent of all businesses in the United States are small businesses. How’s that for a market “sweet spot?” This is where consumer excitement is going to catch fire because of the increased level of customer service and office productivity this technology offers. CTI has the potential to enable resellers to meet the demands of their end-user customers. The technology allows small and midsize businesses to differentiate their ability to serve customers and to maximize their technology investment in the process.

A good example of this customer service aspect is Lands’ End catalog sales. Using computer telephony products, that company has gone beyond customer service to what some refer to as customer intimacy. When a customer calls Lands’ End to order something from the catalog, the call-center agents know — before they answer the call — who the caller is, what garment size he or she wears, and what colors he or she likes. They may also know that the caller always buys socks to match his or her slacks. It makes you, as a consumer, feel cared for, and you will want to call again. Of course it benefits Lands’ End — their sales and profits are erupting.

This new level of customer service points to the fact that, as life gets more hectic and as technology brings us closer together, the more we, as consumers, rebel and want to make it simpler. When VARs and interconnects are developing a solution for a client, one approach would be to look at the situation from the consumer’s eyes and work backwards. They should ask themselves questions such as, “What will make me feel good as a consumer?” and then, “How can I enable my customer to make that happen more easily for their customers?” The opportunities are endless.

That’s one of the things that makes the CTI market so exciting and attractive to VARs and telecom resellers alike. It gives them the opportunity to go back to their customers every day and sell them a new product or application each and every time. Computer-telephony integration is no longer just an enterprise solution; it can be a desktop solution as well, so resellers can always go back and sell new applications. Whether it’s fax, voice processing, interactive voice response, screen pops or autodial through a computer, there are an infinite number of applications that you can go back and sell to your customer. Best of all, they will appreciate your solving a problem for them.

MEETING CUSTOMERS’ NEEDS
Resellers and VARs wanting to get into the CTI market need a business partner that can make it easier for them. Developing a relationship with a distributor can be as beneficial and valuable as any other business partnership.

In the past, any interconnect or VAR bold enough to be an early adopter of CTI had to go to several different distributors and manufacturers to put together the customer solution. Because CTI is a total solution, the VAR or interconnect would have to assemble the disparate elements from multivendor sources. The most significant benefit of using a comprehensive technology distributor is that it offers a onestop shop. VARs and interconnects have access to a multimanufacturer line that includes access to each component of the solution, be it voice, data or video products, plus pre- and postsale technical support to make sure the application works.

A distributor can also offer valueadded services to support a complete CTI sale. That sale should include data services, financing, provisioning, support, and education. Technical support and education are critical at this early stage of market development. The distributor that is successful offering CTI solutions must be familiar with the technology and educated about everything that’s available for resellers. In that fashion, the distributor is able to educate resellers about selling a total solution and can assist resellers in finding the niche they might fill in the industry.

BRIDGING THE GAP
Many VARs are getting involved in the CTI market not only to increase their product portfolio, but their service revenues as well. Because many are coming from the micro-computing area, they are frequently Novell- or Microsoft-certified and understand local-area networks (LANs). But they want to learn about telecommunications. Likewise, many interconnects that are successful in selling telecommunications technology want to learn more about the data or networking side of the equation. Either type of business can benefit from the education, technical support, and financial services that a full-line distributor can offer. These services are designed to support a variety of technologies, including voice, LANs, WANs (widearea networks), internetworking, and video and data services provisioning.

Many top-line manufacturers are developing elegant applications and products that are perfect for the new, service-oriented business. However, although the need exists, no one has put all the pieces together for resellers until recently. Resellers have the ear of the end users, but manufacturers develop the products, and the link between them has been missing. That’s where the comprehensive distributor comes in. A distributor can act as the bridge between the manufacturers and resellers. This link, by which the products and services reach the resellers and, eventually, the end users, is critical.

SERVICE AND EDUCATION
Resellers face two primary obstacles as they enter the CTI market: service and education. VARs are finding that they must change the way they do business in order to meet the demand for service in this arena. Because many VARs are looking to decrease their reliance on hardware revenue, most are interested in expanding their margins through service capabilities. This market forces that change. VARs and telecom resellers increasingly will focus on the behind-the line incremental revenue that comes from new service offerings.

In order to service their customers, however, interconnects and VARs must become educated, and that is really the biggest barrier to entering the CTI market. Resellers must learn to sell a new technology, and that means selling a total solution, not a single product. Resellers have to find out what issues their customers are facing, and then figure out how this technology can be used to solve those problems. A distributor can provide the tools to educate VARs and interconnects, and provide an array of products to supply everything needed to sell the solution. A distributor can also help resellers support customers before and after the sale.

TECHNICAL SUPPORT YOU CAN DEPEND ON
An integral element in the successful convergence of voice and data technologies is technical support. Your customers need assistance when the technology fails; you need assistance in offering an appropriate solution and knowing what products work together successfully. That’s why it’s important for technical support professionals to be involved in the sale as well as available at the help desk. They, more than anyone else, know the technology and how it integrates with a legacy environment.

FINANCING TO BACK YOU UP
No matter what knowledge you bring to the table, the difference between closing a sale and losing it often hinges on your financial backing. VARs and interconnects can take advantage of the myriad financial services offered by a comprehensive technology distributor. A leading distributor can provide the financial support you need, especially when entering a new market. The available services range from credit card and electronic funds transfer programs to floor planning and purchase order financing — all designed to help you increase your business.

GETTING YOUR FEET WET
VARs and interconnects wanting to test the waters of this exciting new market should start by picking a product application or market segment and then learn to execute it exceptionally well. This may mean mastering voice processing, for example. But it could be IVR, desktop video, faxback services, Internet telephony, PBX systems or any number of other applications. All of these applications should be available at a comprehensive technology distributor. The important thing is to start with something simple, and then sell that concept to your existing customer base, keeping your competition at bay. Unified messaging is an excellent place to start. There, the computer industry has already converged the technology. For example, voice mail integrated with a PC enables a customer to access voice mail, fax, and e-mail messages without using the telephone. Another obvious example is faxing, especially broadcast and faxback. Anything the reseller already is comfortable with is a good place to start.

VARs may also want to start providing the voice solution with voiceonly installations. In this case, try a small or low-end hybrid key or PBX system. Don’t go in and try to sell a complex PBX or CTI application. Try a lowend application with one of your best small accounts. For example, if you know they’re moving, you could ask to do the phone system for them. That would allow you to begin learning voiceonly applications. As your level of expertise grows, start exploring some of the integrated solutions that are available.

WHERE MYSTERY AND MARGINS MEET
Where there’s mystery, there are margins. There’s really no easy way to learn the technology, and there’s no simple or fast way of learning to sell the total solution, other than to just dive in. The time to get started is now. Partnering with a comprehensive technology distributor will help.

Every time there’s confusion in the marketplace, that means one thing: increased opportunities and increased margins. That’s the reason for resellers to play, and for manufacturers and distributors to get involved. Because of the strategic relationships, knowledge base, and product line they offer, distributors may just lead this convergence.

Laura Skinner is the vice president and general manager of the Telecom Integration Division at Ingram Micro, the world’s largest distributor of technology products and services. Ingram Micro’s inventory includes over 36,000 products from more than 1,100 of the world’s leading suppliers. For more information, visit the company’s Web site at www.ingrammicro.com.