Ingram Moves: Ripple Effect?

"The Ingram management team and the Ingram board of directors are fully committed to making sure this is seamless and that the customer gets the same level of service and the exact same level of customer experience they do today," said Keith Bradley, president of North America for the Santa Ana, Calif.-based distributor.

Ingram said the offshoring and restructuring moves will cost $26 million and are expected to generate savings of $10 million in 2005, ramping up to annualized savings of $25 million by the first quarter of 2006.

As part of the changes, Ingram is set to ink what is expected to be a five-year deal with an outsource provider by the end of the month. Among the positions slated to be moved offshore are a number of inside-sales rep positions. Ingram will have strict service-level agreements with its outsource provider and plans to run parallel operations to ensure a smooth transition, Bradley said.

VARs will be affected more by the North America inside-sales force changes—which will reassign the inside sales for West Coast and Government/Education to Ingram's Buffalo, N.Y., facility—than by the offshoring initiative, he said. About 2,000 VARs will get new inside-sales reps through the end of the year, and only a small number of those VARs will be handled by the outsource provider, Ingram said. Still, some solution providers are concerned that customer service will be impacted. "This is an example of why we're running away from them," said Jay Tipton, owner of Technology Specialists, a Fort Wayne, Ind.-based solution provider. "Synnex [outsources] the back-end stuff from [Asia]. That's fine. We don't have to deal with them. Now Ingram is getting rid of people in the line of fire that we have to deal with. I think it's stupid."

Ingram rival Tech Data, for its part, said it has no plans to outsource any of its sales operations. "Our inside-sales resources are critical to any sales relationship," said Tom Ducatelli, senior vice president of U.S. sales. "It is not something we believe can be outsourced."