Study: Channel Growth Often Directionless | Channelnomics

In business, growth is something that just happens, and it?s more than just increasing the top and bottom lines. Growth is a reflection of sustainability and vitality. Through growth, businesses react and adapt to changing market conditions and maintain their operational security.

Growth is something talked about often in the channel, as vendors push solution providers to produce better sales and revenues to lift the entire value chain. Vendors? focus on partner growth ? often couched in the term ?profitability? ? is reflected in the resources and incentives designed to spur and support partner sales expansion.

Surprisingly, solution providers? interests in and action on growth are two different things, according to the State of Channel Business Acumen Report, a new study by Channelnomics? parent The 2112 Group. The report?s findings show solution providers are often directionless in their growth investments and are not engaging in formal strategic planning that results in growth.

The survey of 160 solution providers finds that 69 percent of respondents believe solution providers should have a formal growth strategy, or a plan that sets growth targets and identifies the elements required to achieve goals. However, that strong believe in strategic planning does not translate into action, as 45 percent of the channel does not have a formal growth strategy.

The lack of business plans and growth strategies are not deterring solution providers from making investments. Ninety-one percent say they?re investing in growth and expending funds from their existing cash flow to pay for new technologies, service capacity and staffing. Most solution providers are investing in services, leveraging vendor technologies as components in a service-delivery platform.

The disconnect between channel investments in growth and strategic planning is seen in the returns on those investments. Most solution providers say an acceptable annual growth rate is 16 percent or higher. However, 46 percent of solution providers? rate of growth is less than 15 percent annually, with the majority of low-growth businesses recording gains of less than 5 percent.

The 2112 State of Channel Business Acumen Report, the latest installment in the 2112 Quarterly Business Review series, details how shortcomings in solution providers? business structure and management practices hinder sales performance and growth. A free summary is available to all vendors and solution providers. Full versions of the report are available to 2112 research subscribers and individual sales.

>> CLICK HERE to order your 2112 State of Channel Business Acumen Report

Source: http://channelnomics.com/2012/11/07/study-channel-growth-directionless/

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