MMI Assists Ingram Micro to Establish Service Maintenance Business
Ingram Micro Inc., a Santa Ana, Calif., -headquartered Fortune 100 company, is the world’s largest wholesale technology distributor, serving hundreds of thousands of resellers in approximately 160 countries with a considerable portfolio of IT products and services. Ingram Micro represents some 1,700 IT manufacturers through its 119 distribution centers worldwide.
Ingram Micro’s expertise in IT supply-chain, logistics, marketing, mobile solutions, technical support, financial services, product aggregation, and distribution creates sales and profitability opportunities for vendors and resellers. Its channel partners sell their customers IT hardware and software products, most of which include warranties or software licenses as provided by the manufacturer or enhanced by the reseller.
Ingram Micro wanted to grow its service maintenance sales, and recognized that in order to capture the millions of dollars in revenue being left on the table it would need to leverage the expertise and systems knowledge of a SaaS expert.
In 2009, Ingram Micro, with a referral from manufacturing partner IBM, approached Managed Maintenance Inc. (MMI) for assistance in setting up the proper systems and structure to build an ongoing IT service maintenance business.
Until then, Ingram Micro had worked with a few partners and tried utilizing some internal associates to deploy and manage their service business, but the distributor wanted to significantly grow the business and was intent upon supplying its channel partners with the right tools to succeed.
“It’s extremely important for our reseller partners to stay current on their service contracts simply because these represent low- hanging fruit opportunities,” says Jason Hernandez, Director of Ingram Micro’s IBM Business Unit and Advanced Computing Division, U.S.
“It’s much easier for a reseller to sell into an existing customer than to go find a new customer,” he said. “Secondly, if they’re not pursuing the opportunity, they’re opening the door for one of their competitors.”
Within six months of working with Ingram Micro, MMI compiled a complete listing of IBM hardware and service contract data for all of Ingram Micro’s resellers, organized and structured the information, and educated channel partners and the distributor on IBM’s service options, including its Service Pac and contract model Service Elite offerings.
“Right away, we set up a structure for Ingram Micro to gain a competitive advantage over other IT distributors with an IT service maintenance program and, in addition, enabled them to provide a margin-rich, annuity revenue generating vehicle for their resellers,” says Tina Lux-Boim, MMI President and Chief Executive.
“The warranty process starts with a hardware or software license sale by a reseller to an end customer,” Lux-Boim explains. “Most IT hardware and software licenses include warranties or support components which may need upgrading.”
That is where MMI’s systems and expertise comes in says Lux-Boim. “Most resellers need a post- warranty or post-license maintenance agreement in order to keep them current and evolving with the infrastructure of the end user customer.”
“For IBM equipment, the end user can buy maintenance by SKU or through the contract-based Service Elite, which can be applied to multiple pieces of hardware at one time. The reseller positions one vehicle or another at the time of sale to the end user.”
MMI’s software is geared specifically to enable channel partners to set up enhanced warranty and license agreements with end customers, providing an “annuity stream” for resellers and promoting customer satisfaction because the client “is never left uncovered,” says Lux-Boim.
A growing and profitable relationship
Since 2009, the Ingram Micro – MMI relationship has grown astronomically as the two companies have learned one another’s systems, business automation processes, and most effective ways to communicate. “The nature of a new relationship is a series of steps to learn to work best with one another, to earn each other’s trust,” says Lux-Boim.
The profitable relationship certainly has blossomed quickly. In fact, Ingram Micro’s IT service sales to partners, as assisted by MMI, grew 350 percent by 2010, another three-fold in 2011, and doubled again in 2012. With some 100 Ingram Micro resellers actively involved in IBM service maintenance sales, both the distributor and MMI are confident in their sales growth projections for 2013.
Last April, MMI integrated its flagship ONEview ADDvantage+ SaaS solution into the Ingram Micro service. With Ingram Micro’s channel partners managing multiple technology vendors and tracking even more products, their need for a unified and automated solution for their service contracts became of paramount importance.
“Usually what we see in the IT channel is antiquated, manual solutions for service contract management,” says Lux-Boim. “Businesses are literally using an Excel spreadsheet where they’re putting down a customer, an asset they sold, maybe a serial number, maybe a warranty level.”
“We’ve developed a premier software-as-a-service offering, built in the cloud, written, updated and supported by us, that automates asset tracking to allow channel partners to understand where there is opportunity,” explains Lux-Boim.
“With ONEview, resellers have a headlight and a forecast into their own potential annuity stream and a trigger to the buying process,” she says. “In addition, ONEview features proactive reporting and notifications to the end user customer and allows them 7x24x365 access, which improves customer satisfaction, loyalty and retention rate.”
For Ingram Micro’s part, MMI has helped the distributor build many of the aspects of its service maintenance business, established a recurring revenue source for its channel partners, and enabled it to re-allocate resources back to sales, says Ingram Micro’s Hernandez.
“Managed Maintenance has been extremely impactful in increasing our recurring revenue streams via automated tools and training resources for the Ingram Micro sales team as well as our business partners,” he says.
“Establishing the relationship with MMI has absolutely streamlined our processes,” notes Hernandez. “Prior to this relationship we were working with a number of partners to manage our service maintenance business, but we streamlined with MMI, recognizing their demonstrated expertise in this space. The MMI relationship has allowed us to improve processes and spend time on our sales efforts as opposed to the process end,” says Hernandez.
With a commitment to providing best-in-class processes, and Web-based hosted consulting and management services to help its customers boost revenue while keeping implementation costs low, MMI proved itself to be a profitable alliance for Ingram Micro, its resellers and manufacturing partners.