Quick Start Guide to Business Agility Creating an Environment for Successful Business Transformations for Solution Providers

Quick Start Guide to Business Agility Creating an Environment for Successful Business Transformations for Solution Providers Moheb Moses Director, CompTIA ANZ Channel Community 22 Oct 2015 Director, Channel Dynamics

CompTIA Channel Training About This Education The content and materials featured in this presentation are the result of a CompTIA community-led, collaborative development effort. An advisory group of channel leaders and technical experts identified training goals and objectives, while education specialists carried out development work based on the insights and information provided by the advisory group and other subject-matter experts. About CompTIA CompTIA is the voice of the world's information technology industry. As a non-profit trade association advancing the global interests of IT professionals and companies, we focus our programs on four main areas: education, certification, advocacy and philanthropy.

About CompTIA Certifications Largest independent training certification organisation in the world A + Server + Security + Network + Linux + CTT+ CDIA+ PDI+ Project+ Storage+ CASP Cloud + Mobility + Mobile App Security + CompTIA creates exams and sells vouchers IT Professionals prepare for exams through self study, training, books, 3 rd party learning partners, or CertMaster, the new CompTIA learning portal Communities! Membership Vendor-Neutral Channel Education! Networking & Events! Member to Member Directory! Industry & Channel Research! Tools to Manage YOUR Channel! Philanthropic Activities Global Resources! Resources are funded by Certification revenue! 3

What is the ANZ Channel Community? A CompTIA Community Dedicated to the Australian and New Zealand IT channel Vendor-neutral forum for ANZ channel discussion & action Guides CompTIA in how to best serve the ANZ Channel By the members, for the members, aligned to organizational objectives 4

Agenda Planning the future of your business Why change? Understanding the dynamics Part 1 Determining your course of action Part 2 What s your organization s capacity for change? Part 3 Creating greater agility in your business Part 4 Making the right decisions Part 5 5

It is not the strongest of the species that survive, nor the most intelligent... but the one most responsive to change. -Charles Darwin 7

Why change? Business transformation is typically a response to one (or more) of these key factors: Client/End User Needs Customer Preferences Competitive Positioning External Market Factors Innovation 8

The context of today s market It s not about a product, it s about what you do with it 3 rd platform maturing: mobile, cloud, big data, social Changing buyers and drivers mean shifting budgets Security: Physical, IT, and information Product margins under pressure, not a cyclical decline 9

The stakes of market transitions Change Too Soon Change Too Often Change Too Late Change Too Slowly Make Wrong Change Many businesses abandon a market at the first signs of difficulty & miss the meat of the market While diversification is good, pursuing too many options will burn our your resources & brand Spend too much money chasing an aging market & miss the opportunity to invest in new markets Delay your return on investment, fall behind competitors & lose confidence of customers Chase a market you re not likely to win in (because it s popular) & wind up out of place 10

Build a successful strategy for change Add A New Profit Center Change Your Customer Target Expand Your Solutions Portfolio Expand Geographically Merge or Be Acquired 12

What type of change is best for you? 1. Add a new profit center 2. Expand your portfolio 3. Change your customer target 4. Expand Geographically 5. Merge / Be Acquired Add a managed services practice Launch a new technology Build solution a billable service operation Add Build hosted a specific cloud vertical tech market Charge offerings practice for pre-sales services Open a remote office in a Expand Adjust solution your target scope from in SMB to different market transactions Mid-Market Target remote customers with Target new decision makers / a remote delivery model budgets in customer segments Sub-contract with another provider to address remote customers 16

What type of change is best for you? 1. Add a new profit center 2. Expand your portfolio 3. Change your customer target 4. Expand Geographically 5. Merge / Be Acquired Add a managed services practice Launch a new technology Build solution a billable service operation Add Build hosted a specific cloud vertical tech market Charge offerings practice for pre-sales services Open a remote office in a Expand Adjust solution your target scope from in SMB to different market transactions Mid-Market Target Purchase remote another customers business with to Target new decision makers / a remote add strategic delivery capabilities model budgets in customer segments Sub-contract Sell your business with another to another provider company to address as a growth remote strategy customers Establish a strategic partnership with another company 17

Business reality No matter how sound the business model, your business cannot succeed until your team is engaged. Business transformation 101 19

Measuring the ability to change What is your organization s appetite for change? What recent changes have you experienced? What is the core temperature of your organization? How has your company culture or personality changed in the past one or two years? Engagement and commitment are exhaustible resources. 20

Reaching your goals TARGET MODEL CURRENT MODEL How healthy is your business? How different is your goal? How effectively can you change? New resources? New customers? New cash model? New people? New skills? 21

Engagement Specific Direction Emotional Buy-In Logical Capability 23

3 critical concepts of change There is always an alternative. No matter their job, people may chose to leave. Everyone and everything can be replaced. Multi-tasking is the enemy of effectiveness. Productivity is diminished when people try to do multiple activities at one. Multi-tasking speeds burnout. Environment matters. What looks like a people problem is often situation problem. Even the best can t perform in a bad environment. 24

Assess your true business capabilities The Business Operating System 25

Evaluating your position Business operating system Detailed inventory of components Specific definitions of functions and capabilities Efficient organization of all the pieces Precise definitions of roles and their interactions Flexibility to configure and control the processes 26

Business operating system considerations Market Alignment Opportunity Engine Delivery Capacity Business Operations Strategy & Leadership Customer Segmentation Demand Generation Customer On-boarding HR & Recruiting Business Model Defined Deliverables Sales Activity Service Operations Finance / Accounting Organizational Development Competitive Position Account Management Methodology & Processes IT, Facilities & Support Culture & Community Pricing & Packaging Sales Operations Customer Support Legal Resources Planning & Execution Research & Development Branding & Positioning Skills, Tools & Resources Supply Chain Management Management & Metrics 27

Choose your adaption strategy Total business overhaul All at once Incremental Small changes to existing resources Small team of specialists (SWAT) Expert help Acquisition Buy a proven solution resource 29

Justifying the business change The INCOME Calculation The CASH FLOW Calculation REVENUE COGS GROSS MARGIN SG&A NET INCOME I & T NOPAT Invoice Date Collection Date RECEIVABLE DAYS Purchase Date Payment Date PAYABLE DAYS Receivable Days Payable Days WORKING CAPITAL GAP 30

Justifying the business change How significantly different is the new model? How quickly will investments be required? How quickly will revenue start to accrue? Size Matters How effective are you at change and execution? 31

Adjacent vs. distant opportunity Business Transformation Assessment Option 1 Option 2 Option 3 BUSINESS SYSTEM CURRENT DESCRIPTION Add Solution? New Segment (Upmarket)? New Office in New Market? Market Alignment SMB customers; Data center infrastructure (servers, storage, networking); Sell combination of products and services in a both project/transaction and mgd services/recurring model NO CHANGE: Common set of customers CHANGE: No standing with new customers CHANGE: No standing with new customers Opportunity Generation Combination of field sales reps + inside sales support; Part time marketing resource CHANGE: New product / service offerings CHANGE: New sales resources & skills CHANGE: New sales reps to cover new territory Development & Delivery Team of project delivery techs + help desk / support CHANGE: New product / service offerings CHANGE: New delivery & support expectations CHANGE: New tech resources to support Operational Support Office manager responsible for purchasing / supplies; Facilities are cramped and outdated NO CHANGE: Current facilities and resources NO CHANGE: Current facilities & resources CHANGE: New facility required Finance & Accounting Office manager responsible for invoicing projects and receivables; also manages accounting firm & banking relationship NO CHANGE: Common finance model & margins CHANGE: New T&C conditions & margins CHANGE: Requires investment of costs Management & Strategy One owner focused on staff management, recruiting & hiring, financial decisions, etc.; Primary Objective: Improve profit margins CHANGE: Oversee new practice area CHANGE: Oversee new customer management CHANGE: More management bandwidth 32

Calculating the change Financial Opportunity Calculation Model High Level REVENUE MODEL YEAR 1 YEAR 2 YEAR 3 Average Deal Size Deal Timing and Frequency No. of Deals per Rep No. of Sales Reps TOTAL REVENUE PERFORMANCE COST MODEL YEAR 1 YEAR 2 YEAR 3 Training / Development Costs Sales Rep Salaries / Expenses Technical Support Salaries / Expenses Tools / Resources Costs TOTAL COST AND EXPENSES MARGIN MODEL YEAR 1 YEAR 2 YEAR 3 Average Deal Margin Profit per Quarter Time to Investment Payback Business Growth Model TOTAL PROFIT POTENTIAL 33

Calculating your opportunity Can you afford to change? 34

Financing the change What Will You Need Money For? Where Will You Get The Money? 1. Acquiring New Resources 2. Reduced Productivity 1. Self financing 2. Cash flow from operations 3. Training / Skills Development 3. LOC from bank 4. Marketing / Branding / Tools 5. New Cash Flow / New Revenue Cycle 4. Third party outside investor 5. From supply chain partners (co-op dollars) 35

Summary: Are you ready to change? Define Market Forces Select Adaptation Option Define Target Requirements Assess your Core Systems Gap Areas and Ripple Effect Decide: Go / No-go 36

(All) change, even very large and powerful change, begins when a few people start talking with one another about something they care about. -Margaret J. Wheatley 37

Find out more Find more great resources at comptia.org CompTIA Quick Start Guide to Business Agility 38

ANZ Channel Community Meeting and XMAS Party Sydney 24 November Sheraton on the Park 3:30 9:00 pm http://bit.ly/1jumuvr Melbourne 25 November Grand Hyatt 2:30 9:00 pm http://bit.ly/1mfdx5e Or visit: https://www.comptia.org/communities/anz-channel 39

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QUESTIONS? 41

For more information contact: Moheb Moses Phone: 0418 207 804 Email: mmoses@channeldynamics.com.au LinkedIn: linkedin.com/in/moheb Get the latest IT business and career advice from CompTIA 42

Thank you.