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Consolidation

When we think about this term we could be taken down many paths. I’m going to deal briefly with three of these.
John Grant | Managing Director, Data<sup>#</sup>3 Limited

Market Consolidation

In tough market conditions, history will tell us that some businesses will struggle more than others and that this will lead to failure or acquisition. Both of these serve to consolidate or reduce the number of organisations operating in any particular sector.

The ICT sector is no exception. Already we are seeing consolidation in both the local and global arenas. The failure of a business is clearly dramatic with calamitous impacts on employees, customers and vendors as the network woven around each and every business is destroyed and must be totally rebuilt elsewhere. Acquisitions, while normally less dramatic, come with their own challenges.

To have any chance of success, they demand the acquiring party be well led, be a very strong business financially with embedded and sophisticated business processes and that both organisations be culturally aligned or able to be aligned. During the challenging process of physical and philosophical merger there can still be significant impact on employees, customers and manufacturers and unfortunately and factually there are many more failures than successes during this process.

I believe that through necessity rather than intent we will see much more market consolidation in Australia over the next 12 – 24 months. Fortunately Data#3 is financially strong and well positioned to avoid or take advantage of this situation as the case may be and importantly, to maintain or improve levels of service to our customers and our manufacturer partners.

Technology Consolidation

With IT departments and budgets under significant pressure to do more with less, consolidation of technology through virtualisation and blade computing is delivering many of our customers relatively immediate and significant returns. If it’s not on your agenda at the moment we’d be delighted to show you how impactful virtualisation can be.

Procurement Consolidation

As an ASX listed company Data#3’s financial performance is public information. A quick look shows we operate on relatively thin profit margins. Consequently, customers can rightly conclude that prices they are paying for goods and services from Data#3 are very competitive. As such, presuming little difference in product quality, procurement of products and services is more about process efficiency than it is about price. The process of dealing with multiple suppliers is expensive and one way of reducing that expense is to consolidate procurement across fewer suppliers.

Increasingly we are finding this to be the case with many of our customers and as a consequence we are increasing investment in systems and facilities to enable this. If you see this as an opportunity for your organisation talk to your Data#3 account manager 1300 23 28 23, or Enquire Online.

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