Why is finding the right IT Supplier so difficult?

11 March 2020

 Finding an IT Supplier | Embedded IT

This blog was written by Phil Clark, Embedded IT Founder and Director.

Since starting the Embedded Directory (our IT Services Comparison Tool) we’ve had quite a few interesting dialogues with Buyers and IT Managers about why it is so hard to find the right IT or Telecoms Supplier, when it comes to a new service or improving the existing provision. Some people deny there is a problem, and have never had an issue, but most will agree that it is enormously difficult to engage the market with what should be a fairly simply process.

The initial, and most tangible, problem is one of volume. The UK has approximated 150,000 IT and Telecoms companies currently trading. This is a lot.  At one stage, Microsoft claimed to have approximately 30,000 registered UK partners, AWS about 4,000, and most major vendors in the high hundreds or low thousands. 

Problem statement number one: how do you identify which you select?

This leads us to the second problem - differentiation. No matter how hard you try, it is enormously difficult to differentiate the messaging between technology providers. Think of this as a number of layers - if you assume the “Vendor” is the manufacturer or developer of a piece of technology, there is a tangible differentiator in their specific product. For the layer in the middle however, “the Channel”, a reseller of a laptop is pretty much the same as the next reseller of a laptop. Within the Channel therefore, differentiation is a tough and complex beast. And as a Buyer, its nigh on impossible other than focussing on Price - which is wrong.

The Channel marketing teams have been trying to grapple with this for decades and usually focus on a number of options:

  1. Breadth – look how many other products I sell. This makes me better than the others!
  2. Quality – look at how lovely my engineers are… this definitely makes me better than the rest!
  3. “Trusted Advisor” – look at how trustworthy my employees are, entirely undriven by the management or profit seeking shareholders to offer impartial advice. We are the best!
  4. Size – look at how stable I am, turning over a gazillion pounds a year, you’d be silly not to pick me!

In truth, all of these aspects are important. Breadth is a factor of the number of products that you are either authorised to sell, or actively do sell. There are some enormous Channel Partners in the UK who sell most things, but you would have to question whether this breadth compromises depth. One thing this does provide is options, transacting with a single Reseller / Channel Partner who can represent multiple Vendors is a substantial benefit over a single Vendor Reseller.

Quality, by definition, is entirely subjective and is usually the preserve of an individual engineer or account manager over the entire culture of a company.  It is enormously difficult to measure, let alone articulate in a fact based representation, so is therefore a difficult factor to consider as a Buyer.

Size is also an important metric, but it can work against a company. Whereas most larger companies offer more stability (risk is mitigated across more customers), they also come with a potential for dilution of quality / focus. A midmarket retailer looking to buy a firewall for £2k isn’t going to receive fantastic high priority service from an organisation that turns over £2bn.

Even if these were the major factors, you’d still struggle to get an honest appraisal of their capabilities. Generally, their web sites or collateral are devoid of facts associated with these things.  If you look at a typical Channel partner’s website, it will contain:

  • A Products or Services area – pages and pages if phrases like “achieving your business requirements through hyper service-centric computing”, whilst failing to crisply articulate actually what they do. What’s wrong with “We install Citrix”?
  • An About Us area – contrived rubbish about the meaning of the company culture, the “top team” with embellished CV’s, and zero financial information because they are a privately owned company and don’t want to look too small, too big, or too unprofitable.
  • An ‘Our Partners’ area – a list of vendor logos, which provide zero confirmation of whether they have ever transacted a single project with said Vendor. Interestingly, Embedded IT are a Microsoft partner (we signed up a few years ago to see how their partner programme worked), and we’ve never sold a bean of Microsoft stuff.
  • An ‘Our Clients’ area – a list of highly redacted / well worded customer stories, picking only those where the customer has negotiated a reduction in price for giving a glowing reference.

So Buyers - how do you find an IT or Telecoms supplier that can service your requirement, without necessarily falling foul of the industries lack of differentiation and trying to ascertain some facts around a company?

Why - the Embedded Directory of course! The Directory is a centralised repository of information about technology providers that Buyers should care about, namely:

  • Capability – what they actually do and a list of Vendors and the services they layer across each
  • Age and size (in turnover, employee and number of customers terms)
  • Location – buying local is still valid for technology companies to reduce supply chain footprint and support improved relationships with the supplier
  • The industries they target – by definition, if you fall into a focal industry for a company you’ll receive better service
  • The accreditations they hold – both industry (e.g. HIPAA), quality (e.g. ISO) and technology certifications (e.g. Microsoft Gold Partners)

The Directory takes these facts and matches them to the Buyer. We have developed an algorithm which calculates a score – this is based on, for example, if a £10mpa turnover Agricultural Services client in Scotland is looking for a Citrix reseller, they are probably better serviced by a £1mpa turnover Citrix reseller in Newcastle Upon Tyne than a £2bn broad brush reseller in London. This matching score is the basis on which companies are ordered for the buyer.

How do you know that every seller on the Directory is genuine? Embedded IT take the time to talk to all of the suppliers registered to understand who they are and what they can do. We then check their entry criteria and highlight any anomalies. The fact they are all entering their company capability and focus into a standardised format makes it easy to spot! We have also developed a method of formally verifying each entry by checking the company’s finances according to Companies House, their vendor certificates on vendor partner pages, website, social media and finally – we analyse the customer journey with that company.

Used correctly, the Directory is designed to perfectly match Buyers and Suppliers across IT and Telecoms depending on Buyer Requirements and Seller Specifications. Over time, we’re going to improve the service with validated client references and scores - fand other objective and verified measures of a company’s genuine breadth, quality and size.

Embedded Directory - Try it for yourself

 As of today, the Directory caters for 100% of the most common requirements, but we are actively recruiting each day.The Embedded dream is to catalogue and map the whole UK Channel, so that Buyers have sufficient tangible information to make informed choices about the right supplier for their business, not just the one they’ve always used.

We are proud that, in the first 6 months of the Directory launching, we have saved our clients’ money (the current recorded maximum being 42%), improved service (swapped a supplier that was failing with any innovation with another that was commercially incentivised to do so!), reduced carbon footprint (finding local suppliers) - and we’re only at the beginning of what promises to be a long and rewarding journey.

Please do get in touch if you’d like to discuss any parts of the UK Supply Chain for Technology (IT and Telecoms).  As you can probably tell, it’s a bit of a passion of ours.

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