Health Care, Financial Services 101 With Verizon, JMARK

The rapidly expanding health-care and financial-services verticals present a myriad of opportunities for channel partners if they know what they’re doing and avoid pitfalls along the way.

This week, third-party technology distributor TBI is hosting a two-day forum to educate partners on how to confidently speak their customers’ language and address increased technology demands in those two vertical markets. The BIG Event takes place May 11-12 in Rosemont, Illinois.

“TBI works in a rapidly changing marketplace and we constantly adapt to these industry changes,” said Geoff Shepstone, TBI’s president. “We are solely focused on helping our partners grow their businesses. The more confident we can make our partners, the better business discussions we will all have, the more we will all win and it’s the end-user who benefits the most.”

Speaking at the event are: Thomas Douglas, president and CEO of JMARK Business Solutions; Helen Donnelly, executive director of strategic messaging and communications at Verizon; and Mike McAlpen, head of security, compliance and international data privacy at 8×8. He’s also a member of President Obama’s strategic infrastructure cyberdefense InfraGard Group.

In a Q&A with Channel Partners, Douglas and Donnelly talk about the attractiveness and challenges associated with the two verticals.

Channel Partners: Why focus on these two verticals?{ad}

Douglas: They are some of the fastest-growing market sectors, as you can imagine. When you really break down the financial sector, it’s a $1.26 trillion industry that employs close to 6 million people. You get into the health-care arena and it’s an over $3 trillion industry. So the opportunities that exist for the channel community to expand the services that they offer these industries is quite substantial.

Channel Partners: Is it a challenge for partners to focus on these vertical markets, and does it require a change in how they do business and serve customers?

Douglas: It’s not new business or new relationships, but it’s an expansion of services that they’ve already provided. As we all know, the traditional circuits are getting commoditized, and it’s harder and harder to make reasonable margins just by doing that. So this provides them with an opportunity to not have to generate new business, but to expand the business that they already have in these two industries.

Donnelly: I think it can seem daunting because these are obviously very large industries; they have a lot of complexity and different dimensions to them. In health care, for example, there obviously are these large players in this industry, but there’s a whole other level, if you will, of participants that actually are more nimble and agile, and are looking to leverage technology to disrupt how health care is delivered, and how insurance and things are processed and delivered. So I think there’s actually more opportunity than it would appear on the surface because …

{vpipagebreak}

… of the pace of change, and the opportunity for disruption and the role that technology plays in both financial services and health care.

Channel Partners: How would a channel partner go about forming a vertical-market strategy?

Douglas: The first thing is to identify your target customer profile: if you’re going to go into a vertical market, or you’re going to go into a bank that has five locations or you’re going to look for a larger-size organization that has 20-plus locations. And once you understand that, you have to delve into the personas of the different people in that organization.

As an example, some banks don’t have a CIO; they have a compliance officer that deals with all the regulatory concerns associated with their organization. When you get into the larger banks, they do have that CIO role. So it’s identifying within the bank who it is that you need to develop those relationships with and then understand what it’s like to be that person.

Donnelly: There [are] different ends to the spectrum. So at the extreme end of a vertical strategy you have deep subject-matter expertise; you are taking that consultative role to a much higher level from a business context, and you’re actually delivering integrated, verticalized solutions, turnkey solutions that bring together a number of components and capabilities into a turnkey sort of offering and delivering it as a service.

I think there is opportunity at the lower end of the spectrum to put a go-to-market message and context around who you serve and the value you bring to them, and bring together horizontal-type capabilities. So cloud-based infrastructure, storage, collaboration, communications, software, tools, networking, wireless connectivity, these are sort of enabling technologies and you can have a “vertical” sales strategy and marketing strategy without necessarily going as far as creating a turnkey sales offering. 

Channel Partners: Is there a lot of progress being made in terms of partners serving verticals and succeeding? Any examples?

Donnelly: Verizon, as a technology provider, is not creating that sort of turnkey offering to the end customer, but we are providing and enabling technology, and helping to show how it can be applied.

There was a very successful program where we worked with the city of Houston and [its] EMS department. They deployed tablets to the paramedics working in the ambulances that established a video-chat conversation with the different emergency rooms depending on where they were picking up the person from a 911 call; and using that as an opportunity to keep triage and determine whether the patient actually even needed to be transported to the ER. Roughly 80 percent of those 911 calls can be resolved without a costly trip to the hospital. That was a partnership with the end customer, Verizon as the technology provider, and the application and tools by a …

{vpipagebreak}

… channel partner to help facilitate the deployment and implementation, maintenance and the environment for the customer. So we do a lot of that through our channel where the channel partner actually has the relationship with the customer and we’re the technology provider, and they’re not just recording the sale, but they’re maintaining the service relationship with the customer. 

Channel Partners: Are these two verticals dealing with more compliance and regulatory issues than other verticals?

Douglas: They are. Because of those requirements … they are forced to spend their budget on technology. They can’t not do it. If they choose to not get current or not pay for the updates, or whatever may be in question, then eventually their audit findings are going to come back in a negative way and it’s going to impact them somehow, either through a fine or a downgrade. So because they are absolutely forced by the government to spend that budget, they’re better targets for verticalization than a lot of other industries.

Donnelly: I think there is a base level of understanding that every organization that is selling technology to enterprise companies, mid-to-large enterprise companies, has to be aware of. I think when you start to deal with cloud-based infrastructure and data storage, there are some specific requirements in these industries. But again, I think the technology providers can provide a lot of insight. When we work with our partners, we really know what’s expected of the technology capabilities that we’re driving and that’s a value added to the channel partner, that we understand what the customer is going to need whether they’re going to use this in health care or financial services.

Channel Partners: Is there a lot of competition in these verticals, and therefore is it tough for a partner to stand out?

Douglas: There’s a reasonable amount of competition because everybody recognizes that these industries are ripe for the picking, so to speak. But people still do business with people, and that’s why I think these agents have such an opportunity, because they already have those relationships; it’s not like they have to go forge a brand-new phone call and try to prove who they are. All they’re doing is taking existing relationships and expanding it with new services and offerings, and products.

Donnelly: I think these markets are competitive if you are a commodity player. If you are in the pipes and wires, and plumbing business, there [are] a lot of options for companies in these verticals to pursue and consider. So I think the breadth of need of both of these sectors creates an opportunity for a channel [partner] to identify one or two aspects of … a core business workflow and really understand that and align your …

{vpipagebreak}

… sales and marketing, and technology partnerships to help solve those problems. And then you develop a reputation and track record for being a value-added or trusted advisor to the customer, and not just a commodity supplier. And then you become more differentiated.

Channel Partners: Are there possible pitfalls, things for partners to watch out for when pursuing a vertical?

Douglas: Absolutely, especially when it comes to Health Insurance Portability and Accountability Act (HIPAA) compliance and things like that. As an example, you can sell a cloud service that says it’s secure, but if they can’t prove it through internal assessments and outside audits … it’s not. So then you have to vet out the partners who you’re working with to ensure that they have the proper credentials, and security policies and procedure certifications in place so that you don’t get egg on your face when it comes down to that audit. When it comes to simple things like encrypting data for laptops and things, there [are] best practices that need to occur in these environments, and therefore, if you’re not bringing people to the table and partnering with the right groups, then you can put your business at risk as well. So you need to do your homework on who you partner with.

Donnelly: One of the pitfalls is when you’re selecting a technology provider to partner with to target a vertical, and you take things at face value. Be discerning around the expertise that the partner has around the opportunities and the trends, and the pitfalls within a particular vertical, and where the gaps are and where the deficit is for what that customer is trying to solve.

One of the other potential pitfalls can be making broad assumptions around one-size-fits-all. Some of the smaller, midsize financial-services organizations have similar challenges, but maybe are at a different point in their maturation, or their leverage or use of technology. Sometimes we think that the bigger, larger established enterprises – financial services institutions for example – are at an advantage because they have all this technology and they have such a lead if you will. But there’s actually quite a lot of interesting and exciting disruption going on in the midmarket because they don’t have any baggage. So they can really come up with a new business model and they can come out with a new way of delivering financial advisory services that are much lower cost and have a much straightforward path to what kind of enabling technology they need.