Costigan: Avnet restructure is great for partners

By Chris Jager on Sep 18, 2012 12:49 PM
Filed under Hardware

Exclusive: Interim A/NZ boss talks up business overhaul.

Avnet's acting A/NZ GM, Michael Costigan, has painted a rosy picture of the company's future following a major business restructure this month.

The restructure, which resulted in several redundancies and newly created business units, was prompted by Avnet's acquisition of itX Group back in 2010, which has now been integrated into Avnet's Sydney headquarters.

Costigan said the restructure was the final stage of the itX acquisition following a lengthy systems migration process to align both businesses.

"We've basically flattened the organisation, made it more organic and made it more partner and supplier friendly," Costigan told CRN.

"We deliberately took our time on this to make sure that we got things migrated properly. Now that we've done that and got the acquisition bedded down, we've aligned our business to take advantage of those acquisition synergies."

The restructure sees the creation of eight new business units: IBM, HP and Oracle (which combine hardware and software teams), Networking, Services, Technology Products, Technology Infrastructure Solutions (TIS) and Software Solutions.      

Business benefits

Costigan said the business alignment had helped Avnet to cut operational costs by around 10 percent.

"We had two premises and two warehouses here in Sydney, so we've realised synergies through that which has really helped us," he said.  

In addition to reducing overheads, Costigan said the restructure has allowed Avnet to align its business to core suppliers and channel partners more effectively.

"Coming from two systems, we can now have a single invoice for our business partners. In the past, if they procured through the old itX and through Avnet they used to need to have two invoices, now it's all Avnet business. So there's definitely more ease of doing business for our partners."

Costigan said the new business alignment also provided Avnet partners with greater solutions to go out and sell.

"One of the key reasons why we acquired the itX Group was their software solutions and services portfolio. The traditional Avnet business was very strong in the server, storage and networking technologies – now we have software solutions and cloud services.   

"So we can offer our partners greater solutions to take to their end users backed by the industry's leading suppliers. We've got a great value proposition for our business partners so we can let them enter new markets with less upfront investment and less cost and also driving those solutions path programs on behalf of our partners."    

Avnet has also created new account management and inside sales teams to ease its business partners into the new selling environment and service them in proactively selling solutions, Costigan said.

"We've also extended the coverage model; the account management team are based all over Australia; Brisbane, Sydney, Melbourne, the ACT, Adelaide and Western Australia. And we're also making a concerted push into the New Zealand market as well."

Costigan told CRN the distie's partner count had not been lessened as a result of the restructure.

"If anything, we've probably got more partners. Combined now, we have over 2000 business partners that now trade with Avnet here in Australia."

Staff losses

The business restructure resulted in a number of departures. Notable exits from the company include itX general manager Greg Newham, business units national manager Fred King and local marketing and communications manager Paul Sadler, as well as former itX CEO Laurie Sellers. Sellers announced his retirement in June but committed to stay on until the itX integration was complete. He will formally retire at the end of the month.

"We've had some people leave us, but there was no major restructuring or redundancies or things like that on the table. Now that we've got the one system up and running, the key for us it to go out there and sell the full suite of solutions to our business partners.

"We see this as a big opportunity right now in getting the synergy through the former itX organisation. We're quite buoyant and bullish about this year. We just started our FY13 and we're quite excited about that."

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