What happens when a group of IT channel partners and vendors get together? Usually it boils down to the channel becoming offensive and the vendors getting defensive.

But sometimes there comes along one such meet that will act as a platform to share and identify the problem areas that exist between them, rather than indulge in a blame game. This meet will also help in improving the service deliveries and coming out with a joint plan to work together as a team.

This is exactly what Madurai witnessed recently, which held the first of its kind confluence between vendors and channels, organized by Confed-ITA. The event-Get Together 2 Grow Together (GT2GT) Summit- saw the participation of vendors like Intel, HP, Epson, HCL, Hitachi, Numeric, Samsung, TVS-E, Wipro, Acer, Canon, K7 Computing, Compact, Seagate and Dell. Executive members, representing the 14 IT associations in Tamil Nadu, which are under Confed, were also present at the occasion.

Introducing the Confed-ITA and the reason for conducting this channel-vendor meet, Suresh Kumar Soni, Chairman, GT2GT Summit said, “There are issues that exist between the channel and vendors. This event is an endeavor to share and identify these problem areas and help in improving the service deliveries and coming out with a joint plan to work together as a team.”

At GT2GT Summit,
S Karthikeyan, President, Confed-ITA said, “The idea of the summit was to identify the smaller problem areas between the two and sort that out in a smooth manner. This is the first time that such a meet is taking place between the two parties. We are looking forward to more such meetings and to making it a regular event for a two-way interaction.”

Karthik Laxman, Country Manager, India and SAARC, Hitachi shares his thoughts at in the summit

At the start of the summit it was made clear that no personalized accusations would be made at any vendor present.

Vendor loyalty
S Prakash, Secretary, Confed-ITA made a couple of presentations on the sales and service issues faced by the channel community and put forward a few recommendations on that front. According to him, the lack of policies in appointing or removing the channel partners was a major drawback for the channel community. He also claimed that there is a huge difference of opinion between both the communities on this front.

“The channel feel that during dull sales month, the vendor executive appoints a new channel partner in order to achieve their target, incentive and promotion in their respective category. The vendors feel that the existing channel are not able to achieve the target and most of them are not loyal and non co-operative to the vendors policies,” Prakash claimed.

He presented a few points on the expectations of channel community on the sales front, such as appointing sub distri­butors according to the city's potential and taking inputs from local associations.

He emphasized the importance of price protection, claiming that it is must for all tiers, similar to the one offered by the mobile phone companies.

Single dealer strategy
Claiming that vendors' multiple dealer strategy for pushing a single product is a huge set back to the small time dealers in the upcountry regions, PN Prasad, VP, Confed-ITA, said, “If vendors adopt single dealer per product strategy in an area, the trade would be more efficient. Involving multiple channels for a single product would eat into the margins of others and channel would sell without any growth.” He stressed the fact that multiple products are available with a vendor and they could tie-up one channel for each of their products.

Dead on arrival (DoA) and warranty issues are the biggest challenges faced by the channel community. “The DoA policy currently available does not satisfy the channel at all. The present DoA policy requires a customer's invoice/bill for DoA, which none of the customers possess. Almost all DoA cases are sales return for the channel and the channel end up having to replace the product,” added Prakash.

Some suggestions for resolving this issue included the issuing of a warranty card with simple and clear terms without too much fine print for every product which is accepted for warranty service. Prasad also requested vendors to bear the warranty expenditures paid by the channel. It was also recommended that vendors appoint sufficient number of Service Facilitation Centers to handle this and requested them to specify the time for completion of warranty service.

The maximum time for warranty replacement should be seven days in remote locations and not more than three days in major cities. Even in the warranty norms, it was suggested that it would be ideal for the vendors to go by the channels norms, as warranty issues were no way smaller than DoA.

Prasad also added that handling consumer court cases were the vendors' responsibility. “Consumer court cases should be handled by vendor directly, especially in cases where the onsite warranty is provided by the vendor. The ownership fully rests with the vendor and not with the dealer or reseller. All consumer protection court actions will have to be taken up by the vendor both physically and financially,” Prakash urged.

Vendors speak
Following the various claims of the channel, vendors voiced their views on issues like margins, price protection and strengthening of relationship between the two communities. Vendors felt that the continuous price drops are made to ensure the channel partners clear the stock. Most vendors agreed to work on price protection and supporting the channel. Vendors also agreed that working with limited set of partners in upcountry would be beneficial in terms of maintaining good relationship with the channel and generating more revenue per dealer.

Pointing out that every issue would finally boil down to margins, vendors suggested that the channel should also look at generating revenue from services as most partners were offering free service to their customers and missing out huge revenue opportunity in the business. Partners agreed unanimously.

From the vendors' side there was hardly any response regarding the claims and suggestions put forward by Confed-ITA on warranty and DoA issues. The meeting pro­ceeded without any altercations from either side. For the channel community, it was an oppor­tunity to talk directly with vendors.

Prasad informed that Confed-ITA would be holding its second Summit in November 2009 where about 1,000 resellers from all over Tamil Nadu and Pondicherry would be present.

NR SETHURAMAN
sethuramannr@cybermedia.co.in

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