Is there a future for the financial reseller channel?

Advice 2010-03-01 11:05

Neil Robertson, CEO of Compleat Software says that resellers should diversifying into the automated purchase to pay

As financial directors look to impose cost control over the business, automated purchase to pay solutions are gaining real market traction. Early adopters have a real chance to gain a foothold in what is today a virtually untapped marketplace, says Neil Robertson, CEO, Compleat Software.

Early adopter opportunity

As Geoffrey Moore insists in Crossing the Chasm, understanding the technology adoption lifecycle is key to successfully entering a market. As the adoption lifecycle progresses smoothly from innovators to early adopters, early majority, late majority and, finally, laggards, he says, “The notion that part of what defines a high-tech market is the tendency of its members to reference each other when making buying decisions-- is absolutely key to successful high-tech marketing."

So, for resellers entering the market today the opportunities are significant. For any product, the 80:20 rule applies, with 80 percent of sales derived from 20 percent of resellers. And in the main, the dominant 20 percent are the early adopters. As these organisations build a base of five, ten or 20 customers and can offer strong reference sites and demonstrable experience, they attain a significant edge over new market entrants. The sales momentum really is significant.

And while this market is without a doubt great in size, it will become increasingly more difficult to enter as time goes by. Furthermore, early adopters typically get greater vendor support, with free training, joint marketing workshops to provide customers with clear understanding and ROI messaging, as well as support in delivering early projects.

Those resellers joining later have to work a great deal harder to gain market traction; while the messaging may be more broadly understood, the competition will be tougher and have significantly more experience, and the cost to enter the market will continue to incrementally increase.

In a market today where opportunities are limited, financial resellers need to think seriously about the opportunities offered by a solution that meets customer demands, offers a six month ROI and can be delivered with only a few days consultancy, further maximising resources.

Avoiding insolvency

In 1991, as the UK began to emerge from the last major recession, 40 percent of the accountancy software channel went bust. Will it be as bad this time? The signs are not good. Traditional business is not going to sustain any reseller over the next 12 to 24 months. And simply replacing one accounting solution with another will not stop the rot.

Organisations need a solution that truly addresses the market need. By diversifying into the automated purchase to pay market, resellers have a fast track access to a solution that is both demanded by the installed base and can gain a strong foothold in what is a virtually untapped marketplace.

The benefits will be significant: those resellers that do diversify, that maximise the opportunity, will be fantastically placed going through to 2011 and 2012: as the market picks up and organisations begin to release budget, those resellers that survive the recession will prosper.