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Uniting For A Cause

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DQC News Bureau
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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.

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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.”

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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.

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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.

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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.

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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.

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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.

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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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