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The Margin Q4 2017

The Margin Q4 2017

A franchised channel

In preparing the editorial plan for this issue, I had an ‘aha moment’, an epiphany if you will. I had a vision for saving the South African economy, helping to reduce the challenges of the digital divide and skills shortage, empowering a generation of entrepreneurs and, in so doing, enlarging the channel.

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There were a few factors in my thought process that led me to arrive at this momentous conclusion:
• South Africa faces a skills shortage in the technology space
• There’s a government imperative to grow SMEs. But we can’t expect these entrepreneurs to just make it flying solo some of them would benefit from a mentor to provide them with advice
• South Africans are brand-conscious. You only have to look at the queues outside newly-opened US-brand restaurants
• With the right business model, there’s the potential to grow beyond our local borders up into Africa, and tap that wider opportunity.

So what was my economic saviour solution? Simply, it was the franchise model applied to the tech space. Having a centralised support function would enable certain technology queries to be escalated when the branch team isn’t able to resolve them, thus helping to get over some of the challenges of the skills shortage. In a similar fashion, a centralised business support function would provide a shoulder of comfort for the entrepreneurs if they needed it.

Much like the old argument for businesses outsourcing IT functions to service providers, so that the business can concentrate on what it does best, a central franchise operation would lead marketing and brand issues, leaving the local franchisee to worry about running their business.

Then, there’s the international growth story. With a workable model, and strong central branding team, an army of franchisees provides a franchising brand business with the opportunity to grow into new locations with reduced financial risk. It also presents the franchisee with reduced capital risk, as they’re buying into a proven business model, and, in theory are simply following a tried and tested formula.

Of course, the franchise model does already exist in some channel businesses, so I can’t claim that I’ve linked two separate worlds in some revolutionary brainstorm. But I did wonder if it’s a model that we could see grow further. It’s an area, I felt, warranted some further investigation. Which types of channel business did it suit best? Where was it working? Where had it failed? So, in this edition, we look at the franchise model and apply it to the local context.

In these pages, you’ll also find some insight on digital transformation. Specifically, there’s an article with the different perspectives on a couple of the leading analyst companies; there's also the second in our three-part series on how to transform your channel business – this one’s looking at the back office; and finally, there’s a thought leadership piece by Axiz’ CEO Craig Brunsden, who gets underneath what digital transformation could actually mean for the broader channel. You’ll also find stories on targeting the IT decision-maker, quantum computing and our roundtable is on the collaboration market.

I hope there’s something in here that interests you or even provokes an idea or thought for your channel business.

Happy reading.

Adrian Hinchcliffe
Editor
adrian@itweb.co.za

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