PARTNERS ’ PERSPECTIVE
When it comes to the MEA market , the channel has not taken any action to investigate the downside risk caused by the current geo-political situation and global Coronavirus pandemic . For example , the currency deprecation in most African countries has exacerbated the issue of credit terms and insurance as no IT distributor or insurance firm is willing to extend terms in an uncertain market .
Credit insurers are now staying clear from insuring or enhancing credit limit for the reseller segment due to multiple runaway cases , especially in most Gulf markets .
Given the entrepreneurial spirit found in the Middle East IT market , to stay competitive and attract vendors to deal with local solution providers , resellers and IT dealers , local distributors have to move away from traditional box-shifting to full Value Add offerings , which opens up new revenue streams specifically with professional services and training to ease cash flow and retain customers .
To achieve this , vendors and distributors alike need to be transparent with each other , especially about their forecasts and cash flow , to ensure the correct expectations are set within the market so that the whole sales
It is undeniable that the IT sector is spearheading the changes happening in society today – be it personal , enterprise or government .
chain , from vendor to distributor to reseller is open to proper management scrutiny and business oversight .
In the long run , the channel will survive this period , which has been challenging as sales cycles have been longer , with cashflow impacted in some cases . Ethical resellers who run their business in a professional way , manage their finances and commitment well , don ’ t take undue financial risk , keep financial records and regularly audit their books , will have access to credit despite the prevailing market conditions .
It is clear that business will go on and continue to be done . The onus is on IT distributors , vendors , banks and finance companies to continue supporting good players in the market . With the IT industry calling for broader business reforms in the channel and credit models to adapt quickly enough to the changing economic climate across the MEA region , experts contend that any delays will hamper progress of transforming the market .
It is undeniable that the IT sector is spearheading the changes happening in society today – be it personal , enterprise or government . The sheer potential the IT sector has in the coming years will ensure vendors , distributors , resellers and endusers work together and come up with credit solutions which work and push the MEA channel forward .
As this progress is happening , vendors and distributors have to change their business models from focusing so much on sell-in ( just to grab market share ) to sell-out-based models . Sales to consumers is action measurement of sales for any brand , contrary to the current business model in MEA which is based on how much inventory that can be sold into the channel with no efforts to enhance the sales to end-users . With a sell-out-based model , cash flow management will be enhanced , better control on days sales outstanding and inventory will help the cause to revive the channel industry . •
INTELLIGENT TECH CHANNELS
INTELLIGENT TECH CHANNELS Issue 36
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