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CHANNEL FINANCE SUMMIT AIMS TO HELP RESELLERS GET IMPROVED CREDIT Resellers must redefine themselves as "experts in relationship management". Financial Accord is promised. "Concrete help through this difficult economic time". The Finance Summit, sponsored by Intel, Bell Micro, Widget, KMS, Midwich, Eurotech, P&A, Graydon, AON and Siceo, included representatives from reseller groups Synaxon & NBG. The views of the independent reseller were voiced by Bear IT. The objective of the meeting was to discover what actions the IT supply channel might take to help itself in the current financial crisis. Delegates were sufficiently encouraged by their discussions and planned actions that they have agreed to hold a follow-up meeting in July and aim to include more channel representatives. Whilst it would be premature to release details of the intended outcomes, which will require considerable work over the coming weeks, it is intended they will include: a model for a Financial Accord, which resellers and distributors should aim to conform to. The objective of the Financial Accord is to encourage the highest standards of professionalism in financial management within the channel. There will also be a Guide to the Calculation of Credit Limits, a (financial) Guide to Survival and a Guide to Obtaining Funding. In his introduction to the event PCA CEO Keith Warburton asked whether it was right to blame credit insurers for pulling the plug, or whether the root causes of the problem were more to do with our methods of trading, which have relied too much on credit that has been too easily available. The ubiquitous nature and cheapness of often complex technology hasn't helped. "We seem to have become a market that relies on credit insurance. Years ago businesses carried the largest portion of their own financial risk. First and foremost owners would invest in their own businesses, before they adopted a luxury lifestyle. Many ICT enterprises seem to get that the other way round - at the first sniff of money buy a Porsche or BMW." "Historically, if risks were carried by a third party it would be by the banks lending to their customers, but in those days banks had managers who knew their clients' business inside out. But over the years a lot of business relationships have become mere statistics on a balance sheet, and decisions are taken according to a computer programme. The computer really does say "no" or indeed "yes". It could be argued that those businesses that have worked to maintain personal relationships are best placed to weather to current financial storm. A community, whether of individuals or of businesspeople, should not necessarily expect to have its problems solved by outsiders, rather it should look close to home wherever possible, and call upon its own resources, whether intellectual or financial to provide the foundation of its ongoing health. And trade associations, by their very nature not for profit organisations, can play a key role in fostering solutions to the problems within trading community." Some bullet points from the summit: Credit isn't an island - it's the core of good business Well run resellers that are heavily into services are often doing quite well, whereas any that are still heavily into shifting tin are being hit hard. Things will be worse next year. Biggest challenge facing most resellers is credit lines, allied with the distributors approach to credit. The disties mustn't change the rules without informing the resellers in advance; give them time to present their financials in the required manner, rather than saying that the arbitrarily changed rules don't support the required line of credit. More transparency, in both directions, is required. Truism: businesses that fail to produce timely / accurate accounts are those most likely to fail. It is a fact that some businesses will fail and it's not necessarily the suppliers or insurers fault. The SME community generally requires education re finance, especially with the need to produce accurate accounts. If they are more transparent they'll get better limits The banks must start lending again - their attitude is a major problem. This is a critical key to us getting out of the recession Changes in business practice mean it would be useful if management accounts including statements regarding cash management are made available as standard practice Credit insurers are not asking all the right questions. Annuity income and income from SAAS are not recognised by the insurers, but may make up a large part of the turnover and a major part of the profitability of many resellers. There is a new model of business, characterised by reduced credit lines and financial uncertainty. Some enterprises are finding ways to work with this new environment, including "coopertition" between the vertical elements of the channel, and also between the horizontal ones. It's a trust issue (within the channel). We're entering the era of coopertition. Coopertition isn't recognised by credit insurers End users are always looking to save money and will cut out the middle man where feasible; it's inevitable this pattern will continue and grow. The channel must investigate and develop strategies, as part of the new model, which will enable all parts to continue to benefit. For instance, don't define yourself (internally or externally) as a reseller - be "an expert in relationship management" - this will open new doors, and define new horizons. "KPMG says that 69% of SMB's have made no change to their business forecasts since the recession". Is this the ostrich syndrome, or merely short-sightedness? Don't be critical of the distributors - the larger ones are bankrolling thousands of businesses. The key question is: will it (can they) continue, and if so for how long? There are still other options for finance. In the telecoms arena business is 30% leasing, the IT channel is lagging way behind. In order to ensure best support from suppliers, dealers need guidance on financial matters. Laurie Beagle, director of PandA the summit's co-host and a co-opted director PCA said of the event "Starting a new forum such as this is always a somewhat uncertain venture, but there is definitely and quite obviously a need and so I was happy for P&A and the ECF to support the event. As we built the format for the day it became apparent that the attendee mix was going to be all important. And we seem to have got it just about right. After the initial introductions and scene setting it started like a train getting up to speed. Everybody without exception provided their view of the problem and we started to gravitate towards specific areas such as financial transparency, credit insurance and routes to market. I can only say how pleased I was at the outcome. We now have some concrete actions that I believe will make a difference and lead to Better Business Practices - some concrete help to support the Channel though this difficult economic time." PGE VANISHES. NO RIPPLES EXPECTED LCD maker PGE Corporation is withdrawing from the UK market. The company has, however, done what very few other businesses in our market seem to achieve, in that it seems to be making and orderly and honourable withdrawal. It has put in place a contract with RepairTech to handle all warranty work for the next three years. From 1st May, anyone with faulty PGE product should contact RepairTech on 0871 231 3043 or pgeaftercare@repairtech.co.uk CHANNEL EXPO HOSPITALITY INVITATI0N All PCA members are invited to enjoy the hospitality on the PCA's stand at Channel Expo. As well as meeting members of the PCA team and directors, you'll be able chat with our sponsors Talk Internet, Synaxon, FixItLocal, PandA Receivables. Make the most of your visit! Book your accommodation and your place at the networking dinner on the 20th here: Booking Form OBITUARY - CHARLES FORSYTH Charles Alastair Petcheva-Forsyth died in north London on 5th September 2008 following a brief illness. Vendors in the UK PC-building marketplace of the 1990's knew "Charles" as one of its most notable figures. On first acquaintance a likeable, plausible and well spoken heir to the chieftainship of the clan Forsyth, by the time his career in the channel had ended he had alienated all of his suppliers and many corporate customers and major retailers, including Tesco, Makro and Argos, not to mention thousands of individual customers and staff. In April 2005 Charles Forsyth pleaded guilty to five counts of fraud relating to the collapse in 1999 of his "£30 million" company Personal Computer Sciences, and was sentenced to three and a half years in prison. PCS was simply the latest in a chain of computer business stretching back into the 1980's that had failed while Charles has lined his own pockets. His previous company, Multiplex, had gone down for £1.4m, which happened to be approximately the same amount that he had taken from the business during the previous 18 months. At one stage he, or his businesses on his behalf, had owned both a French chateau and a large motor cruiser. In between computer companies Charles, an aficionado of luxury vehicles, had operated an automobile sales business. During the early 1990's the UK had a vibrant domestic personal computer marketplace, with multiple brands being sold via the pages of several very thick computer magazines. At that time the most common method of payment was by personal cheque, with no recourse should the computer builder fail in its obligations. Publishers, competitors and component suppliers could often spot the indicators of a company in trouble, but couldn't advertise that fact for fear of a claim for damages being made by the company when it did go bust "we failed because you told people we would, and so they stopped buying from us". This was one of the reasons why in 1993 several of the leading direct sellers got together as a trade association with strict rules for membership and a Code of Practice; we knew that Multiplex would not be able to join the Personal Computer Direct Marketers Association (as the PCA was at that time) and thus the "good guys" could publicly differentiate themselves from flaky companies such as Multiplex. The Serious Fraud Office mounted an enquiry into the collapse of PCS and by October 2001 believed they had a good case against Forsyth, however he fled the country a week or so before he was due to be interviewed, travelling to Bulgaria and Russia and then shuttling frequently between Eastern Europe and Australasia. Charles was finally detained in Australia in 2002 and extradited to the UK. Whilst awaiting extradition he underwent surgery for a serious illness. For those who might still harbour anger towards Charles Forsyth, a glimpse of his handing over to the British police may mitigate those feelings, as the SFO report says "The handover of the prisoner took place at Sydney Airport, but as the Australian police walked towards (them) the three North Yorkshire officers momentarily thought that there had been some kind of last minute problem. Where was Forsyth? "He'd lost almost half his body weight in prison and at first we didn't recognise him," recalls DC McGrail. "He seemed a changed man and not just in his appearance. As the aircraft door closed, and we were on British 'soil' again, we formally arrested him and all he said was: 'Thank you for being so courteous to me'." As PCS was peaking the PCA took the difficult step writing up Charles' career as a matter of public record (resulting in a small flurry of solicitor's letters), and thus we feel it proper to publish this conclusion to his saga. He was a notable character in our marketplace for two decades, and we should mark his passing. Several of Charles Forsyth's business contacts have, over the years, speculated as to what drove him, a well educated and intelligent man, to diverge from the straight and narrow. Some surmise that it was a monumental ego and disdain for other people's needs and wellbeing, others think that he was driven by a need to prove himself as successful as his forbears, who had (it is said) built fortunes in tea and retailing. Perhaps he needed to show that he was a self-made man worthy to inherit the clan chieftain title "Forsyth, of that Ilk". One of his former business partners, damaged financially and in reputation by association with Charles was keen to try to track him down on his release from prison "in order to tell him I forgive him, and thus gain closure". He wasn't able to find him. His first marriage having failed, at some stage subsequent to his flight from justice he married a university lecturer from Sofia and it may have been a welcome anonymity upon his release from jail to be able to place his surname behind his wife's. At the time of his death he was described as an unemployed car salesman. Charles Forsyth 13th June 1959 - 5th September 2008 Some of the information herein is drawn from the lengthy & informative Anatomy of a Fraud Case in the SFO's Annual report for 2005-2006 VIP REJIGS Ts & Cs Plainer English but reawakens the debate about returns. All credit to VIP for making their terms and conditions easier and clearer to understand. But there's one element of distributor's (and vendor's) terms - not just applying to VIP but to the whole channel as far as we know - that remain cloudy and the source of potential problems. "5.3 If the defect could not reasonably have been discovered on delivery of the Goods, then You shall be entitled to return the Goods within a reasonable time of purchase provided that You notify Us within 2 (two) Working Days of discovering the defect and the Goods are still covered by the particular manufacturer's warranty period. " This is excellent. However … 5.4 If Your claim that the Goods are defective is valid then We will repair or replace the Goods. If this is not possible, We will refund You the current market value of the defective Goods. So then, a reseller takes a notebook into stock knowing they've got a hot-to-trot prospect. A week later the consumer confirms and the computer is shipped. A couple of days after that the customer reports that it keeps crashing & returns it to the reseller as faulty and demands a refund or replacement, as is their right under sale of good legislation. The reseller does some quick checks and finds that yes indeed, it does seem to be faulty (let's say a HDD is suspect). Reseller then has the option to refund the customer, or to get the customer to wait a day or two until he can get a replacement - customer accepts the latter option. It's going to take a week or four to get any result from the manufacturer, and so reseller orders another system from the distributor which is then supplied to the happy customer. Eventually, and in accordance with vendor and reseller terms, the repaired unit is returned to the reseller. Within the law the reseller cannot now sell this unit as new and will have to reduce the price in order to cover the fact. Reseller wanted just one notebook and has had to buy two, one of which will have to be sold at a reduced price - potentially at a loss. It is a simple fact that the reseller loses out, pinched between the law and the need of the vendors and distributors to ensure they maximise their profit potential. Any vendor that effectively addresses this issue is bound to gain business from a grateful reseller community. IT CHANNEL GOLF DAY 2009 PCA does it again! Superb venue, great value, and a networking event for everyone to enjoy - even the non-golfers! Thursday 9th July. Staverton Park, Daventry, Northamptonshire, NN11 6JT Rising to the challenge of improving upon our previously superb golf events, the PCA's annual Industry Golf Day is a very special occasion in 2009. As well as providing two rounds of great golf with some superb prizes to be won (and a goodie bag you won't find anywhere else), this year we are extending the offerings to ensure there's plenty to do for those who aren't confident enough in their golf to go round the course. You can polish your golf with the pro. Learn the basics or tweak the finer points with a morning and/or afternoon session of professional tuition. Maybe you'll win the chipping or putting competitions? Or you can relax in style in the pool area and take advantage of a treatment in the Spa. You even have the option of doing both. And of course you'll still join in the fun of the prize giving, the dinner, the networking and the charity pool tournament. And whether you are playing golf or taking part in the other leisure options it should cost you no more than £99 a head! There isn't a better sporting & networking event in the channel! Just 10 minutes from the M1, Staverton Park is a mature, championship level 18 hole course set in rolling Northamptonshire countryside. As well as immaculate greens and fairways and some cunningly placed bunkers there's plenty of practice areas, together with a well stocked pro shop and a superb clubhouse & bar. The golfers' restaurant has a terrace overlooking the course that simply invites you to enjoy a barbeque dinner after your triumphant round. After your bacon roll and coffee in the morning you'll enjoy the warm-up of a 9 hole Texas Scramble, followed by lunch and then the PCA Open in the afternoon, where you'll compete for team and individual honours, as well as the usual prizes for nearest, longest, straightest etc. Once you've finished playing you can relive your best (or worst) shots in the players bar, before enjoying the traditional PCA networking dinner. As usual, we encourage you to stay overnight so that you can enjoy a fully relaxed evening. As the evening progresses you'll probably want to embarrass yourself / exhibit your skill in the charity pool competition Book now! Golf Leisure & Accommodation booking MICROSOFT ASKS: Did you know that last year: Software piracy costs the UK £855 million*- 27% of all units of software put into use were pirated - Illegally obtained software accounted for 5% of all software installed on PCs worldwide - Global software piracy losses amount to £20.5 billion. However 37% of our partners don't realise that counterfeit software has an impact on the channel. If you think that software counterfeiters are a small-scale nuisance that don't really affect your business, then think again, piracy isn't just a Microsoft problem or a vendor problem - it affects everyone in the channel. *Source Annual BSA and IDC Global Software Piracy Study 2006 Know the Types of Software Piracy Software counterfeiters often take advantage of businesses seeking to cut their software-acquisition costs. Don't let your customers be fooled. As their trusted advisor, you can help them by identifying the different kinds of software piracy and the associated risks they pose - including legal action. Copying or distributing copyrighted software without license is one kind of piracy, but it's not the only kind. Simple possession of unauthorised software is also piracy. Familiarity with these and other forms of piracy can help protect you and your customers from the potential repercussions of intellectual property theft. Software piracy includes:
Genuine Microsoft Software Initiative Unlicensed and pirated software threatens the entire software industry. Communicate the benefits of genuine software to your customers. Know the Risks of Counterfeit Software Software piracy undercuts your business - costing you the revenue you deserve - while threatening the security and integrity of your customers' IT assets. Protect your brand, as well as your bottom line, by helping your customers understand the risks of using counterfeit software. Educate Customers to Join Effort to Prevent Software Piracy The widespread use of counterfeit software has immediate and long-term impact on your business, your customers' IT assets and your customer relationships. Recent global studies indicate that much of the counterfeit software available simply doesn't work, so customers' investments are immediately wasted. Counterfeit software that does work may pose serious threats. And can prevent your customers from receiving critical updates, further affecting system performance and security. Help your customers avoid upfront investment waste, downtime and maintenance costs. With genuine Microsoft software, your customers receive:
Genuine Microsoft software can also help maintain your customers' professional reputations, protect them from legal action, and reduce their lifetime cost of ownership. Microsoft is committed to preventing piracy from hurting legitimate software users. By showing your customers how to avoid the costs of software piracy, you can enhance your customer relationships and drive revenue from continued licensing and support services. *Studies conducted by IDC Genuine Microsoft Software Initiative Unlicensed and pirated software threatens the entire software industry. Communicate the benefits of genuine software to your customers. Find out more about the Microsoft Genuine Software Initiative. Protect Your Business and Your Customers from Piracy Software piracy harms your business by undercutting your ability to offer genuine Microsoft solutions and licensing services to your customers. And the use of unlicensed software can expose your customers to damaging code, prevent critical updates of their systems, or leave them without fully functional applications. Your expertise can help prevent software piracy, alleviating customer risks and protecting your bottom line. You can leverage your expertise and customer relationships to help prevent software piracy before it starts - and capitalise on licensing revenue opportunities. Mention the risks of software piracy during sales calls and offer appropriate licensing services as alternatives to using unauthorised software. Be alert when customers request PCs without an operating-system licence. If they plan to install Windows on those PCs, let them know the risks and consequencies of using unlicensed software. Make sure your customers know about the Windows Genuine Advantage (WGA) program. This online validation program determines whether installed Microsoft software is genuine. Your customers' copies of Windows software will automatically undergo WGA validation when they visit the Microsoft Download Center and Windows Update sites. Remind your customers that if their software can't be validated, they won't be able to get downloads, software patches and critical updates from Microsoft. Report Piracy Email ukpiracy@microsoft.com Make sure you are buying genuine Microsoft software by working with an authorised Microsoft distributor, click here for more information. Market Genuine Software The Microsoft Genuine Software Initiative can help you demonstrate the long-term value of your solution built on Genuine licensed Microsoft software. Leverage new campaign videos and customisable marketing templates to educate customers about the risks and costs of pirated software. The Microsoft Genuine Software Initiative can help you make the case for using only licensed software. Download customisable email and flyer templates to advise customers against using pirated software and to promote your genuine software, software support and licensing services. New Videos: Leverage the Facts to Promote Genuine Software A new graphic-novel-style video series, 'Genuine Fact Files', illustrates the risks that counterfeit and pirated software presents to your customers. Add these short video stories to your website, or share them with customers in person: Proper Licensing Myths - helps correct common misunderstandings your customers may have about Microsoft Windows licensing. Counterfeit Confidential - reveals the risks of counterfeit and other types of pirated software, and demonstrates the value of using genuine Microsoft licensed software. The Legal Edge - shows how customers who have counterfeit software can acquire properly licensed copies with the Microsoft Get Genuine Kit. Get Genuine Windows Agreement Take advantage of a new opportunity to drive revenue by legalising unlicensed copies of Microsoft software on your customers' PCs. Help them correct Windows XP Professional desktop licensing deficiencies using the Get Genuine Windows Agreement (GGWA), a solution available through Microsoft Volume Licensing corporate programmes. New Compliance Solution, New Partner Opportunity According to a study published by the Business Software Alliance (BSA), one third of all the packaged software installed on PCs worldwide is pirated. This represents up to US$40 billion annually that could be earned by Microsoft partners and other authorised resellers of licenced software - but is, in effect, being stolen by individuals and businesses. Now, you have an opportunity to provide customers who have been victims of piracy a compliance solution through Volume Licensing and capture otherwise lost revenue. GGWA can help you:
A longer version of this item appeared in Microscope. |
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Professional Computing Association, PO Box 48, Royston, Herts, SG8 6JS Tel: 0845 634 9245 Fax: 0845 634 9247 Email: admin@pcauk.org |
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