Five years ago, the managing director of City-based reseller Trans European Technology (TET) had a decision to make - either carry on rolling out technology to its customer base or take a strategic shift and focus on services.
To remain to all intents and purposes a box shifter would have been easy but would have provided only limited growth, whereas to move into value-added services would have been a harder slog but would give the group a chance to move beyond the point it was already at, i.e. unable to expand any further.
In early 2002, with a headcount of around 60, a turnover pushing £15m, one regional office and another on the horizon, the decision Dave Joyce arrived at has clearly paid off. With services now making up 30 per cent of its overall revenues and a 50/50 split between sales and technical staff, the company believes it is headed in the right direction.
TET projects and quality manager Peter Squire (above right), who joined Joyce and the group three years ago from one of its key customers, says the strategic decision to add services to its portfolio was designed to turn the group into a supplier customers could use to provide a complete IT package.
Bettering its rivals
One of the key achievements laid out by Squire is something he also sees as one of TET's main advantages over the competition - its independent ISO 9000 quality assurance standard. "The main reason for achieving ISO 9000 was to put a quality structure into the company. It's a statement to our customers that we can provide a consistent level of service and means we have to constantly look at our working methods as the company grows, particularly as we diverge into consultancy services," he says.
Squire adds the accreditation - over and above the usual vendor plaques on the wall - sends a strong signal to its customer base, which focuses on the top end of the SME market and vertical sectors and includes four or five large City law firms. It also means the reseller must have its own strict quality control standards in place, so regular customer surveys are carried out to check it is hitting targets.
"Over the past year, we have been carrying out telephone-based customer satisfaction surveys, covering how accounts are run, including account management, use of our help desk, efficiency in processing orders and so on. It is a way of being proactive and it keeps us focused," he says.
TET sales manager and Computacenter veteran Paul Mitchell (above left) claims the company has been picking up business that larger City players - including his previous employer - let fall through the net because of their size: "Computacenter and the like have a target market and a cut-off point. The business that doesn't fall into those companies' target markets - that is high end for us - is our sort of customer and there's a lot of business there."
Mitchell and Squire agree TET has been successful in attracting customers at the top end of the SME market because it can provide the flexibility and responsiveness that larger players would simply be unable or unwilling to match.
Mitchell claims the difference between an operation the size of TET and one further up the food chain is based around quality of service. "When customers with around 250 employees want kit, they need it straight away because it is critical to their business. They need a quick reaction and I think some of the larger companies would struggle to help them," he says.
TET's services revolve around the IT lifecycle and cover the usual areas of procurement, maintenance, training, support and consultancy, but Mitchell wants customers in the SME space to look at the company as a sole supplier. "We supply everything from procurement to maintenance and onsite support. We make an effort to understand customers' business to see exactly what they need and help them define their IT requirements," he says.
In terms of relationships with other levels of the industry, Mitchell names Computer 2000 and ETC as suppliers he's happy to do business with and claims TET is a rare beast in that it values loyalty in supplier relationships.
But he adds the company is not adverse to putting distributors through their paces to make sure it's getting the kind of service it prides itself on.
"We survey our suppliers to find out about things such as delivery times, stock availability and so on, so we can pass that service on to our own customers. It's not about screwing them on price, it's about a mutually beneficial relationship," Mitchell says.
Squire claims the company expects service and mutual respect to work both ways, but admits relationships have broken down on occasions because of a vendor or partner trying to poach accounts for themselves - an ever-present danger for resellers which is all too common. "We've been skinned a couple of times in the past. Sometimes, we sub-contract something like cabling and find the supplier has been quoting on routers and other kit, so we have to make it clear that's not how we work. It's still an issue and it's bound to continue to be one as the market gets tougher," he says.
In terms of the future, TET has its eyes set on further services growth and more comprehensive national coverage. The group has a satellite office in Kent and plans to open another one soon to service customers in the Thames Valley area. "If you're just supplying kit, you can do that from anywhere in the country, but as we try and move towards more managed services we need national coverage," Mitchell says.
He adds the company plans to "aggressively expand" and claims that although the market is tight at the moment, new business for the right sort of company offering the right sort of service is never far away. "I know it's a cliché, but to be honest there is so much business out there," he says.