Blog | August 27, 2012

What A Former 'Total' IT Solutions Provider Taught Me About Profitability

By Jay McCall

If there's one message Business Solutions makes more than any other, it has to be this: The big winners in the channel are the companies that figure out how to bundle multiple IT hardware and software products, wrap services around these offerings, and sell total solutions. After my interview with Jim Steinlage, president of Choice Solutions, I realized there is a pretty big clarification and caveat we need to make to this claim. For one thing, Choice Solutions' profitability has been doubling every year for the past three years. For another thing, Steinlage has sold off five business technology practices during that time, so he could transition from an IT generalist to a virtualization specialist.

During my interview with Steinlage, I started to wonder to myself: "Is this company the exception to the 'total solutions provider' rule?" By the end of the interview I had my answer: "No."  And, here's why. Choice Solutions still provides customers with total solutions, including: VoIP/unified communications solutions, CRM, MPS (managed print services), ECM (enterprise content management), or Web development. The thing is, however, that if a customer needs these IT solutions or services, Choice Solutions is no longer the company fulfilling every request; they're working with one of their strategic partners -- which is typically another IT specialist that doesn't compete with Choice Solutions' virtualization speciality -- and letting the partner fulfill the customer's need.

So, just to clarify: Being a total solutions provider is absolutely what most of your customer's want (aka one throat to choke). And, it is the best way to avoid competitor creep (e.g. the copier dealer that's vying for your customer's network business; the telecommunications company that wants a piece of the network revenue, too). But, you don't have to provide every IT solution yourself. Taking a few cues from Choice Solutions makes a lot of business sense, especially if you find yourself winning fewer than half of your prospective sales engagements and/or if your competitors are cherry picking your best talent -- two challenges Choice Solutions was faced with a few years ago, but doesn't face now.

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