IT and Business Insights for SMB Solution Providers

The Wheels on the Bus: Navigating Change (part 2)

In my first post in this series on navigating change, I shared the history of the business model transformations that the IT industry has seen over the past few decades.   I predicted that our ever evolving industry will continue to change but will do so faster and faster.

While we have encountered change before and learned to navigate change while maintaining our current operation, this shift will be different.  Why?

Never before have we had technology, business model, workplace, and marketplace forces all shift at the same time.

Let me share a bit more about these four key transitions:

  1. Workforce – there is a shift coming in the makeup of our workforce – by 2020 over 50% of those actively working will be millennials.  It’s unfair to paint them with a broad brush other than to say it will be different from the baby boomer dominated workforce we’ve had for some time.
  2. Marketplace – buyer behavior is rapidly shifting.  Some of that is related to the transition of power inside customer organizations to younger buyers, but the major shift is how these new purchasers want to do business.  The move is from outbound marketing where the customer gets found to inbound marketing where they find us.  The old approach of face-to-face, phone and direct is changing to online, text, and indirect.  Social media continues to play an important and ever increasing role in the market.  New skills, new sales process, and a new marketing approach are only a few of the ways we must adapt to remain relevant.
  3. Technology – this is a continual part of the business so we’re most accustomed to this shift.  But it is broader than ever before and the technology changes are disrupting much of what we’ve come to think are somewhat stable and secure.  In the next few years we’ll have to address a rapidly growing cloud infrastructure, IoT, blockchain, managed security, autonomy, wireless coverage, business intelligence, and bandwidth to name a few.
  4. Business model – we’ve addressed this numerous times in the past, but this time the major change is how money is transferred from the customer to the service provider.  Our industry has primarily been funded in a couple ways.
    • Distribution has served in many ways as the bank of the IT channel offering credit to resellers as part of their service portfolio.  As less things are purchased through distribution and less of what is being purchased is paid for up front, that funding mechanism that has offered cash for partners to operate is going to change.
    • The second critical financial area has been the way we’ve made money traditionally – selling projects and services at the front of a refresh cycle and using that to fund ongoing operations until the next refresh.  Cloud takes that project revenue and turns it into a recurring monthly fee which works out fine over time, but the change from one to the other requires strong balance sheets or other sources of cash which many companies do not have.

These four shifts have far reaching impact on all of our companies in the days ahead.  And while this blog post has provided a perspective on how these shifts will affect the IT industry, the impact will be across all companies in the marketplace which adds another layer of complexity.

Most of these changes are not isolated to the IT industry but will be universal in their impact.  That said, IT companies are uniquely positioned to lead through these changes.

It’s a different need requiring some different skills, so we need to address how we’ll change the tires on our own bus in these four key areas.

But we also need to build a team that can help our customers change the tires on their busses as well.  That’s where the real opportunity lies.  If we help end customers address these challenges, we will be at a far deeper and more strategic level than ever before.

Now is the time to prepare so you can seize the opportunity that is here!  In the next posts we will look deeper at each of these four coming shifts.


About the Author

Arlin Sorensen's picture

Arlin Sorensen serves as the CEO and Founder of the Heartland Companies which includes HTG Peer Groups. When he is not traveling to speak and consult, he is home on his farm in Iowa with his wife Nancy. He is a proud “Pop” to four precocious grandchildren who serve as daily reminders of why he is intentionally living to leave a strong legacy of faith and integrity. He loves making a difference in the lives and businesses of small business owners. You can reach him at or on Twitter @asorensen.

ChannelPro SMB Magazine

Get an edge on the competition

With each issue packed full of powerful news, reviews, analysis, and advice targeting IT channel professionals, ChannelPro-SMB will help you cultivate your SMB customers and run your business more profitably.