ChannelTrends: Get in Business-Shape for 2012

With two weeks left in the 2011 sales season, most solution providers have their plans in place for the first quarter of the New Year—if not for the next twelve months. Since it’s difficult to make a hard close to December business with the holidays, many are already shifting their focus to 2012—and looking for ways to improve their organization.

This time of year business is typically a little slower, allowing the management team to reflect on past success and challenges before moving into the next quarter. December is also when many executives make their New Year’s resolutions. Rather than making a commitment to drop a few pounds or to give up smoking again, it’s a good time to evaluate what their business needs to make it to the next level.

Much like the lifestyle changes, organizational shifts require a long-term plan to ensure they succeed. That’s why so many resolutions fail—without a daily, weekly and quarterly target; there is no way to track progress. And without those frequent assessments, a pledge made in December will often be forgotten in a few days or weeks. Without a solid business plan in place, solution providers’ priorities can change on a daily basis, especially when client emergencies and other problems surface.

That’s why the commitment to change needs to be tangible—and communicated to all employees. The entire team needs to know the details of any change and understand why it’s important, as well as their part in it. Each member should be empowered to respectfully hold others’ “feet-to-the-fire,” ensuring everyone is working to achieve the intended outcome.

Metrics: No Crystal Ball

The first step to making improvements is to understand the current situation, including jumping on the scales to weigh yourself or determining your business’ customer satisfaction level. But neither of those tells the true story nor do they help create the plan to success. A much deeper dive is required, including an assessment of the issues that contributed to the current figures.

That’s where metrics come into play. Much like an iceberg, many of the critical business measures are often never seen or evaluated. Revenue and profitability figures, for example, are critical to any commercial organization and are extremely easy to understand. If either measure is trending in a negative direction, business owners can make simple course corrections to “right the ship.”

While increasing sales or cutting expenses will typically resolve the issue, how does the business owner know they’re addressing the true problem? Unless a number of the organization’s metrics are evaluated prior to making the changes, they don’t.  For example, a decline in sales with current clients may be due to their dissatisfaction with the service they are currently receiving. So, when the solution provider pushes sales to new customers, the issues may only escalate with the added demands on the support team. As a company adds clients, employees and processes, the real problems often become harder to identify—at least without a good evaluation process (or a crystal ball).

That’s why a full assessment, including all critical metrics, is critical to long term success. Solution providers must evaluate their business’ financial, operational, and client results on a frequent basis to identify trends, both good and bad. That’s not easy to do, but there are systems and support groups available to make that process easier. The Corelytics Financial Dashboard is one of those options, a platform that automatically uploads data from a solution provider’s financial accounting systems to display financial performance, key indicators and forecasts. This gives VARs and MSPs access to the information needed to make sound financial management decisions, helping them to improve the business planning process. CompTIA offers a free version of this platform to its members, which can be easily upgraded to a more comprehensive subscription version.

Peer Groups

Software solutions make great tools, but VARs and MSPs often look to their peers for best practices and new ideas to help improve their operations. No one understands your business like others in the same industry, and the IT channel is no different. CompTIA communities offer a number of collaborative options for solution providers, allowing them to network and access business development tools relating to specific technologies and vertical markets. The Small Business Owners Community is one of these groups, providing emerging IT businesses with best practices, business fundamental education and other valuable resources to improve their organization.

Peer groups vary significantly in both their financial and time requirements, allowing solution providers to choose the right fit for their business needs. HTG and Corelytics each offer communities with a high-level of collaboration and sharing, but in order to receive the benefits members must also be extremely committed to the groups. Success comes from the combined efforts of all, including “homework” and idea generation.

In some peer communities (HTG and some coaching groups), a certain level of financial and operational data is shared with other members, so trust and confidentiality are a requirement. That information is key to properly evaluating each member company’s progress, and critical to helping them reach the next level of success. Without access to each company’s metrics, the discussions become more about theory than action. Those who make a commitment to high-interaction peer groups expect results, and the first step is to allow others to become “stakeholders” who will offer critical advice and evaluate their progress. When solution providers allow others (not competitors) to review somewhat sensitive parts of their operations, the truly commit to the improvement process.

After IT business owners get a firm grasp of their internal metrics, the next step is to benchmark those results with the industry. HTG and Corelytics are two groups committed to that process, collecting data from each member, which allows each business to compare results with both the group and the industry. This quickly identifies problem areas, alerting solution providers to areas where more focus is needed.

This is where the plan to make a change in business-style begins, with the data and information needed to make the right decisions. Do you have that level of insight to your organization? If not, make it a New Year’s resolution and build a solid plan to meet your commitment!

Brian Sherman is founder of Tech Success Communications, specializing in editorial content and consulting for the IT channel. His previous roles include chief editor at Business Solutions magazine and industry alliances director with Autotask. Contact Brian at Bsherman@techsuccesscommunications.com.