For channel companies the digital transformation means having to woo business p Thinkstock

Zero One: Digital Business Transformation, A Channel Story

For channel companies, the digital transformation means having to woo business people instead of tech people.

By now, it should be clear we’ve run smack into the digital transformation era. If companies of every size across the country, around the world, and in every industry can’t make the pivot to digital, then they risk being disrupted, either by an innovative startup or an agile competitor.

Oddly, it’s that simple.

It’s why half of the Fortune 500 has disappeared since 2000, according to Accenture CEO Pierre Nanterme. It’s why General Electric, The Home Depot, Coca-Cola and other household brands have made multi-billion-dollar digital bets on innovation. It’s why line-of-business executives are under a digital transformation mandate and now call the shots on tech purchases.

“I was in southern California in front of one of Avnet’s largest partners, and we talked about the importance of being able to speak about the business problems in healthcare for the head of radiology,” says Tim Fitzgerald, vice president of digital transformation at Avnet Technology Solutions, speaking at Channel Visionaries in San Jose, Calif.,  in January 2017.

But what exactly is digital business transformation, and how can channel companies and independent software vendors (ISVs) get in the game? In a word, digital business is a company on SMAC – social, mobile, analytics and cloud.

Digital business can be a marketing department tapping the power of social, mobile and analytics to send the right message to the right person at the right time, essentially transforming the customer experience. It’s so profound and impactful that Gartner says the CMO tech budget will surpass the CIO tech budget this year. Some 4,000 marketing tech vendors have flooded the market in the last few years, including giants like Oracle, Adobe, Salesforce and IBM.

Digital business can be a product development team putting the Internet of Things (IoT) into products—basically, sensors for collecting and analyzing data—to better understand what features are being used most or when products might fail. This can lead to new kinds of products or changes in the business model from selling products to renting them. (For more on this, see Will Internet of Things Ignite “Power by the Hour”?)

Digital business can be an operations group analyzing data from IoT-equipped machines on the factory floor and making decisions for optimizing operations. Predictive maintenance, for instance, can reduce downtime by 50 percent, extend machine life, and lower equipment and capital investment by up to 5 percent, according to McKinsey. All tallied, companies stand to save $630 billion by 2025.

This is just a sliver of digital business transformation examples; SMAC is happening everywhere and in all kinds of ways. But line-of-business executives lack sure-footing amid the chaos. For many, technology is new to them and a little scary. They don’t have the experience to separate technology hype from reality. The tech department, too, might not have the technical skills needed for digital transformation.

Enter channel companies to help line-of-business executives navigate digital business transformation in their vertical niches. CompTIA says 36 percent of companies expect solution providers to profit from IoT alone.

Before shepherding customers, though, channel companies need to educate themselves – and major vendors stand ready to help.

Avnet, for instance, is helping its channel partners speak the language of digital business by arming them with “solutions-oriented” content, including battle cards that guide sales reps on how to talk about solving a business challenge with applications. The Avnet Cloud Marketplace, a foundational element of Avnet’s digital transformation strategy, is also evolving into a digital platform whereby everything will be delivered as a service.

“This platform adds value across not only the reseller partner community but also entities like independent software vendors that might want to represent complimentary solutions to the solution they’re offering,” Avnet's Fitzgerald says.

Microsoft, too, has built a library of “playbooks” that show a channel partner how to build a practice in, say, artificial intelligence in manufacturing. Each playbook is 200 to 300 pages detailing scenarios and personas. It’s just one of many ways Microsoft is helping channel partners and ISVs get their customers on the road to digital transformation.

“The buyers now are not necessarily the tech developers but optimized business users who go into these marketplaces, find and download line-of-business applications, and immediately start using them,” says Larry Persaud, director of Azure strategy at Microsoft, speaking at Channel Visionaries. “That’s the growth in the market, and we’d like our partners to really jump on board with this.”

Based in Silicon Valley, Tom Kaneshige writes the Zero One blog covering digital transformation, big data, AI, marketing tech and the Internet of Things for line-of-business executives. He is eager to hear how digital transformation is impacting your business. You can reach him at [email protected]  

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