[Strategy interview] Value-as-a-service

Ingram Micro’s head of supplies, Kelvin Paterson, told to Nell Walker in June’s issue of Dealer Support about the current trends in IT and why dealers should be utilising their distributors’ offerings

A Fortune 100 company, Ingram Micro is the world’s largest distributor of technology and IT products – yet, still, the customer comes first. Kelvin Paterson is the UK arm’s head of supplies, who fell into print and supplies in 1988 after a brief footballing career. Now, in his 31st year in the sector, times have certainly changed and his second year with Ingram Micro sees Kelvin in charge of supplies, from supply chain through to sales, covering SKU forecasting, vendor management, customer visits – and everything in between.

“Having worked in both distribution and reseller environments I do understand a lot of the challenges out there,” he explains. However, to truly keep on top of the industry’s evolution, it’s the customer he needs to keep in touch with. “If I want to improve our service it’s vital that I speak to resellers, as this is the only way we can match their expectations. Having been a customer of Ingram Micro I was also aware of certain areas where we needed to improve, especially around holding the correct products and then delivering them in an acceptable way.”

While Kelvin keeps in touch with what the dealer needs and wants, Ingram Micro more broadly remains on top of the trends in the fast-changing world of technology across all regions. Its central function for the EMEA region, based in Munich, helps the business to monitor changes across all geographical areas but, the key to everything for Ingram, is its vendor relationships. “Without the OEM vendor relationships, we would fall behind our competition,” says Kelvin.

Challenges in the IT landscape

Despite Ingram Micro’s size and influence, the modern IT landscape can still be challenging. “In my area, the challenges have been around the ability to print what you need, where you need it, while doing so securely,” Kelvin explains. Margin erosion and Brexit uncertainty has impacted IT distribution across the board but, Kelvin says, it’s how that is managed that will keep a business at number one. In fact, he believes that distribution now needs to change how it works and presents itself in order to remain relevant.

“Distribution has realised that just selling a box is a costly experience and that there needs to be other offerings such as finance, fulfilment, recycling and so on,” he explains. “It can be difficult for distributors to be agile, depending on their size. Ingram is in 129 countries and we, in the UK, have autonomy, so we can be agile when we need to – but syncing up with what everyone else is doing, globally, can be tricky. Sometimes countries, such as America, are adapting more quickly than we will in the UK but we have to look at that change, and prepare for it to happen to us, even if it’s a few years down the line.”

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Selling trends

At the forefront of current selling trends Kelvin sees selling happening via social media more and more, and most businesses offering more than one route to buy through. Margin erosion is also seeing resellers move to consignment stock, using distribution as their own personal warehouse, while services are increasingly taking over product-selling. Print as a service, in particular, is on the rise and it’s something Ingram is making sure it gets involved with as the industry shifts.

“We’re seeing companies trying to take costs out of the business, and one of the best ways to do this is taking print and putting it into a service,” Kelvin says. “I don’t think it’s restricting the amount of printing that’s happening – I just think people are being a little more wise around their budgets and spreading costs over 3-5 years. Also, by offering services, you’re helping to tie the customer to a vendor, which encourages them to stick to original consumables.”

Despite this rise, Ingram hasn’t seen a decline in traditional box-shifting – in fact, it’s seen excellent growth – but it is very aware that it needs to offer value-added services – as do its customers. It’s the businesses embracing innovation, keeping up with trends and changing the culture and behaviour of their sales teams that will do well as the IT industry progresses, yet some companies still fall behind due to stubbornness, complacency or lack of education.

“If a reseller has been around for decades, they might struggle to understand what is needed by current end-customers and employees,” Kelvin says, as an example. “However, those that have kept up with changes over time will obviously move quicker. Some are resistant to change and still believe ‘old school’ methods are best, but they may struggle in the future if they stay siloed in one category, sector or vertical.”

Easy wins

So, in the fast-shifting world of IT, is there such a thing as an ‘easy win’ for resellers? Kelvin isn’t so sure. “With the internet making the environment such a small place, I don’t think easy wins really exist,” he explains. “The key is relationships with customers and understanding their needs and constraints. The print market is buoyant; despite many false warnings, customers are still printing – they’re just doing so more mindfully. The key drivers in the print industry right now are innovation, security and as-a-service.”

While many dealers can be reluctant to take advice from distributors, Kelvin urges them to utilise the tools and knowledge available to them – even if they don’t come from another dealer. “Sometimes they may think that distribution channels are trying to make extra money by attempting to help – and, on some level, that’s true,” he says. “But it’s also about getting them to understand that it’s a benefit to them as well. There are advantages that distributors can provide, so use those services as add-ons!”

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