CRN Interview: Jeff Howells, Tech Data

Jeff Howells, CFO at Tech Data, sat down with Editor/News Steven Burke at the distributor's recent conference for TechSelect members, a group of solution providers that serve the SMB and enterprise markets. Among the topics they discussed were the distributor's plans for and expectations from the group in the coming year.

CRN: How important are the TechSelect members to Tech Data?

HOWELLS: All customers are important. However, the customers in this audience have the ability to grow their businesses. They have vertical niche applications. Many of them continue to grow their businesses even [amid the malaise of the IT industry. For whatever reason,geography, product set, customer set,many of these companies have continued to do better than the average. They're very important.

CRN: It seems as if Tech Data is putting more resources into the group.

HOWELLS: It's increased resources, but it's also more clarity in the resource allocation. I think [Senior Vice President of U.S. Sales Terry [Bazzone's new organization has made it more clear to everyone how important it is and what their responsibility is to the resellers and vendors of the organization.

CRN: When you look at the group as a whole, are you measuring its performance? What do you expect from them as we move into 2003?

HOWELLS: We don't look at just one group; we look at all our customer and vendor sets. I think the key is to look at the volume of business each member does with Tech Data. Our goal is for them to continue to grow their business with Tech Data. Of course, the goal is to have them switch business with competitors over to Tech Data because of our full suite of services and the ease of doing business with us.

CRN: Can you gauge how many solution providers are switching?

HOWELLS: I don't have any numbers to share, but at this point, in a tough economy, we're most interested in just sustaining business with strong customers.

We're poised, as their businesses grow, to take more of that share. We're not out to steal share based on price. We're out to sell every day at a fair price and to surround them with all the services we do, whether it's with our credit organization, tech support or the vendors. [Solution providers know who to get to. They know who to call, and our understanding is that it may not be as clear with some of our competitors because of a variety of changes in terms of people or programs.

CRN: Is there an increased focus on service areas such as credit?

HOWELLS: Half of our business is about providing credit,being the bank to our resellers so they can provide the products and services to their end-user customers. We focus on getting out to these customers, getting to know their businesses so we know who we're going to extend credit above and beyond to. Many of them in this room, if you asked them, they would attribute their success to the credit we extended to them and to the belief we had in them. On the flip side, we are not here to sustain a model that won't work. We're not here to provide extraordinary credit to customers that have a business model that won't survive in this climate.

CRN: Is there one reseller model that you look at and say, 'That's the one that has legs'?

HOWELLS: I wouldn't say it's that narrow. We're dealing with many people here who come from a technical background. Their forte is not all the back-office operations to run their company. So we have programs that teach them how to improve the cash cycle within their business so it improves the cash cycle of our business. It's more of those that are attentive, those that are interested, those that work with us and those that are willing to know when they're having problems so we can work through those problems vs. hearing stories about why they're not paying. It all gets back to integrity, credibility and knowing your customers.

CRN: What's your mood going into 2003?

HOWELLS: Our mood will be cautious, but we'll be optimistic that at some point we'll see a turn for the [better. We're cautious because our business is a very leveraged one based on expense. We'll [keep our expenses very low and reasonable, but we'll have the capacity to handle incremental business as it becomes available to us. As people look at the productivity of their staffs and the downtime of not having an up-to-date network, we hope to see at least a trickling increase in [IT spend rates.