commentary In September Dell announced that it had signed Harris Technology as its major reseller partner for the SME channel.
Deborah Harrigan, general manager at Dell SMB Australia and New Zealand told CRN both companies came together because they had "excellent synergy" in terms of business models, customer focus and delivering value to the SMB market. "Harris' specialty in servicing the sub-150 market was particularly interesting for Dell," she said.
Eron Plumb, national manager at Harris Technology, told CRN the reseller would handle the implementation and servicing of Dell's products. "We have our own technical services team," he said. "However, we do use third-party service companies in certain regions like far-western Queensland where we don't have a centre."
Given the key role of small to medium enterprises (SME) in the Australian market the announcement was of particular interest to Longhaus. While it appears that the deal might be good for Dell in our mind, it still perpetuates a retail mentality within the SME sector, which must change.
That may sound strange, given that the formal agreement sits within the commercial side of Dell's channel program and not the retail side. Many major vendors either don't get why this is bad for the industry or are exploiting the situation for their own gain.
You see, SMEs typically buy technology like consumers.
While we agree with Harris that many SMEs have what they refer to as a pro-sumer (a tech-savvy consumer without formal ICT education or training) in their ranks, the presence of this type of buyer does not improve decision making relating to the strategic role of technology inside their business.
In Australia, the SME market's approach to ICT can be summed up in four words: no plan, no budget. And in most cases you can add to that no technologist (someone with formal ICT education and training).
Yet the answer to improving productivity, cost savings and business growth within this sector through ICT is simple: less technology, more expertise. As ICT has risen to meet the demands of the SME business owner, many savvy companies find themselves at a crossroad of technology maturity.
In Australia, the SME market's approach to ICT can be summed up in four words: no plan, no budget.
And with little to no true independence in the vendor channel, and certainly not from the retail channel where outcome is driven on sales incentives, the vast majority of SMEs lack comprehension of the best direction to take. We are not for one second condemning the channel and retailers for selling another piece of hardware or licensed software, or even basic installation services.
Where we do have a problem is when an SME is having business process and service-oriented issues, but are being given only product-oriented options. For example, when an SME hits data storage and backup issues, simply buying another server or NAS may not, in fact will not, be the right solution most of the time to address their fundamental requirement to protect information and sustain their business operations.
Similarly for software, SMEs we encounter continue to struggle with non-integrated core business applications. For example, their MYOB doesn't link to their Sage CRM. While Harris has services that focus on "installation, configuration, transfer and health-check", there are no parameters for an SME to engage a strategic discussion around structure and strategy.
This highlights perfectly the difference between "services" and "advisory" in the mid-market, and the glaring lack of the latter when it comes to the strategic application of ICT. In the June edition of CRN there was an article reprinted courtesy of Business Victoria called Why Should I Use an Accountant? It was only about 100 words long but provided a clear definition for how an SME could apply the services of a professional accountant to the benefit of their business.
However on first reading the article, it wasn't an accountant that came to mind; nor even a lawyer. Instead it brought to mind the mid-market clients that Longhaus has helped over the past few months. Five of the key points for why an SME should use an accountant in their business are listed in the table below and compared as statements relevant to other professional advisors and services.
(Credit: Longhaus)
Based on our own experience and the data we have collected over the last few years, Longhaus believes the following provides a great starting point for SMEs seeking decision-making support related to the core areas of a modern business. It is clearly not the intent of this analysis to challenge the benefit of the channel market in Australia as providers of value to the mid-market.
The economy would stagnate without them. However, the very transactional nature of supplier relationships that the mid-market facilitates with their channel partners means there is little chance of maintaining independence of the specific business situation of the customer in support for situation number 4 above.
From our research we know that 80 per cent of Australia's SME market has neither an ICT budget nor an articulated strategy. The direct result of this has emerged in several instances we have encountered this year where spurred on by the stimulus grants channel partners have encouraged hardware refreshes within the smaller end of the market.
After all, a $70,000 investment in new servers that are granted a 50 per cent tax incentive, backed up by first year depreciation and paid for on an easy multi-year instalment plan sounds like a good idea to many SMEs. Unless of course, with the right advice they come to the assisted realisation that they only need a $7000 spend on new hardware and can make real business change through investing the same again in software development or online services.
There are as always exceptions, but most vendors are simply not doing the right thing by the thousands of SME customers in Australia and New Zealand. Knowing better and doing nothing is no defence. It is widely recognised in the enterprise market that buying technology right off the shelf and simply installing it alongside everything in the legacy portfolio will buy inefficiencies every time.
It is time for the purveyors of the technology to raise the bar or stand to lose market share. It is time to match the right services for SMEs to the appropriate marketing message. The challenges of the SME market from a strategy perspective are consistent and addressable by the right partner: hardware and maintenance, networks and continuity, telephony and mobility, storage and back-up, and business process supporting applications.
We get tired of hearing how big technology companies are addressing the mid market. Quite frankly, in many cases they are exploiting the retail mentality of the mid-market and doing little more than promoting a happy brand experience.
This article is by Queensland-based ICT analyst firm Longhaus. It first appeared in the company's journal Longview and is published on ZDNet.com.au with Longhaus' permission.
