The Method Behind the Madness – Part 2
In part one of this series I explored how corporate culture makes us different on the inside. In this part, I will explore our business model and the impact it has had on our growth. To do so, it is important to understand why we started this business….
In a previous life, I was GM for a business unit for a large integrator. No matter how many staff we had, we would consistently run into the problem of not having pre-sales resource available as and when they were needed. Worse, when we won a deal, we would often not have the right person with the right skills at the right place at the right time to deliver the services. Fixing these skills gaps was not easy, with the following infeasible options available:
- Contract market – when a contractor is available either you are lucky or there is a good reason for it!
- Ask the vendor if they had people on the bench – at a buy price up to 50% greater than my sell to the client.. hmmm not great
- Hire – not quick enough or easy to get headcount approved, or
- Ask a competitor if they had available resource – not likely.
I thought to myself, if we have this problem and with 70+ staff of a large integrator, surely this problem must be rife throughout the industry and there had to be a way to fix it.
The problem compounded
I also noticed that vendors struggled to get resellers to adopt and embrace their products quickly enough, learning that it generally takes a vendor 12 months to get partners enabled and capable to sell and deliver their solutions. Even then, traction is not usually great for another six months. Furthermore, I noticed that customers were (and still are) looking to reduce the number of companies they procured from.
It was these inputs that led me to identify that there was definitely a gap in the market and six years later it is evident there was a market in the gap as well. So how did we plug this gap?
We set up a model that would not compete with the already mobbed market. How did we do that?
- Insentra has a wholesale approach, transacting and delivering our services exclusively via Vendors, Distributors, Resellers and Managed Services Providers.
- We do not transact directly with end-user organisations, nor do we sell licenses or product that our partners would otherwise sell themselves.
- We are a pure play services organisation, providing pre-sales assistance at no cost to our partners with a view to helping them deliver outstanding services engagements for their client base.
- We are not a “body shop” of contractors…the vast majority of our engagements are fixed cost where we take on the risk.
This business model was not a unique idea. It had been tried before and in almost all cases, the companies who started with a wholesale model either changed to a direct model of sales or morphed into a hybrid model of both wholesale and direct. Regardless, they deviated from their core. With a history like that, it was significantly harder to gain trust from the market – they had been bitten more than once before. The only way was to be consistent in our behaviours and true to our wholesale model. It took nearly three years for that trust to be broadly established and we value that trust as the crown jewels of our business.
The leverage of a non-competitive, value driven wholesale services business model has been a wonderful thing, particularly as we have grown rapidly and is absolutely positively correlated with our growth trajectory. Why so?
- It has enabled us to perform some of the most complex and high profile projects, in the largest corporations and government agencies
- We don’t employ a sales force which keeps our costs low
- We are not, nor do we need to be, on any panel contracts.
- Working with a network of over 130 partners, we are exposed to and deliver work in all verticals and a great variety of different sized clients, providing a breadth of skill and capability at all ends of the market. It is this network of partners that has enabled us to deliver over 1200 projects in six years to over 500 end user organisations.
- As the market shifts to the cloud, more and more partners are less and less interested in selling traditional professional services. When staff resign, more and more partners are turning to Insentra rather than replacing the resources.
It is these points and particularly the last one that have influenced our growth over the years. Having been true to our model has been pivotal in our success. Sticking to our guns and not budging from our 100% channel based go to market model has held us in good stead and is core to our growth to date and plans for the future.
Look out for part three…. How vendors have influenced our growth