Churn Out The Benefits

The economic recession has brought a frown on the faces of all
entre­preneurs. Everyone is faced with the same issue - managing funds in such a
way that it brings value to every expenditure. Until and unless every individual
of an organization contributes ethically to churn out maximum benefits of every
allocated fund, the issue of fund management will keep on arising. During the
discussion 'Fund Management During Turbulent Times', channel partners and
vendors discussed the matter at length. One of the main issues that came up was
that of customers holding on to payments, which was becoming a challenge for
partners due to a problem with payment collections.

Nitin Shah of Allied Digital mentioned that it is all about creating value
out of the fund and one should not only look at the balance sheet. “One should
look at creating more values but unfortunately no one takes this into
consideration. At this stage, solution providers (SPs) should make sure that it
is a case of creating a positive value in the organization through solution. ”

Disagreeing with Shah's view, a channel partner from the audience said that
an entrepreneur, whether he is in solution space or not, is not interested in
the value of his products and services until he gets a profitable balance sheet
at the end of the day.

“One has to keep his eyes open and maintain profitability in his business
deals. When business is slow, a SP has to make sure that he is earning profit
out of every transaction in order to survive in the market.

A no profit margin would eventually make the business worse,” opined a
partner from the audience.

Pradeep Gupta, Publisher, DQ Channels lead the panel which discussed the most pertinent issue of these times-how to effectively manage finances during a slowdown. The other panelist included Nitin Shah of Allied Digital Services, Vijay Wadhi of Locuz and Mandeep Gupta of Emerson

Modifying strategies

As the discussion heated up, it was pointed out that when the annual budget
plan is finalized, everyone looks at the topline rather than the bottomline.
Vijay Wadhi of Locuz made an optimistic remark that SPs will continue to grow
but one has to revise their budget as and when required.

“One has to decide his budget plans according to the marker scenario.
Decisions have to be taken as per the situation and if required, fund allocation
has to be amended also. One has to take various decisions on the the available
resources and select that which would churn out maximum utility,” he said.

Wadhi further opined that one of the ways to check cash flow during times of
crisis was by managing the solution offerings with the available manpower. If
required, employees who have been sluggish in their performance have to be asked
to leave and where possible they have to manage with the available manpower.

While the discussion was underway, the audience listened intently

It was further pointed out that SPs might have to become ruthless with their
employees, and non-performing employees have to tracked down so that their
resources and energy are utilized for the growth of the company. SPs opined that
even if a company is not facing tough times during economic slowdown, they can
create a hype to identify and polish their potentials and resources.

Mandeep Gupta, Country Manager-Channel Business, Emerson said that one should
consider the profitability of a company rather than firing employees.

“Cutting down on the number of manpower is an easy job but the ultimate
objective should be to optimally utilize the available resources. We have to
make sure that we are providing the right solution to customers at the right
cost. Also, making margin should not be the main agenda, rather focus should be
given on other smaller issues. For instance, collecting payments on time could
be one of the ways to utilize your resources. Proper resource utilization and
focus on various issues can help in increasing the profitability of a company,”
he highlighted.

Another issue that came up was that often a partner gets squeezed between the
vendors and the customer for payment collection and earning the margin. To this,
Gupta said that the squeeze is for everyone and not only for channel partners as
even the vendors gets squeezed between the fund management team and customers.

Shah said that business is a risk and before taking any decision one has to
do risk analysis. As there is no single solution, partners have to reduce their
exposure and should concentrate on their expertise.

The pricing factor

Further discussing the pricing strategies, Wadhi noted that when a partner
offers a solution, he can play with its pricing and there are opportunities for
better pricing when the project is a large one.

Shah further opined that this is the time when capital expenditure is under
pressure and this puts a challenge on the solution. Talking about possible
strategies he said, “We need to have a control on customers.

Our solutions are customer-centric and not vendor-centric, therefore business
should not be vendor driven. Vendors are the technology makers but the solution
is developed by us, therefore, we should balance our pricing and the offer to
the customers.”

Payment collection

Gupta added that one should support his loyal customers at the right time
and if needed extend the credit period for them. Sharing his way of working,
Wadhi highlighted that he has devised an incentive scheme for his team. Timely
collection of payments would ensure them additional benefits. He added that
direct orders from vendors help in redeeming the cash crunch in system.

Shah emphasized that one has to maintain relations with customers. A SP
should change his strategy of focusing on customers according to the situation
and should have multiple customers rather than focus on a single client.

Amrita Tejasvi

amritat@cybermedia.co.in