Key challenges
While channel confidence is looking up, challenges remain. The backlog of the sudden slowdown witnessed in  the H22008 is being carried forward. The biggest challenge of all is payment delays by customers, with 67 percent rating it as the one challenge that could hamper their growth prospects. “Movement of cash is still not on track. Our average payment cycle is 60 days, and this continues to hamper our cash flow. I don’t see this scenario changing soon, not before the end of 2009,” says Jha.
Analyzes Diwakar Khatri, CEO, Microclinic, “The payment delays seen so far have been primarily due to the credit crunch witnessed owing to the tightening of bank credit and loans over the last six months. It’s not that customers don’t have money to pay. Rather, they are sitting on cash till the credit scenario improves, which is now happening. With positivity all around, banks will start lending again, and we expect the situation to improve in the next three months.”
Nevertheless, payment defaults by customers are also on the rise, and this threatens the health of the channels. “Payment defaults have been taking place,” says Ketan Khimani, Director, Microlink Solutions. “One has to be careful while dealing with customers in such times. These cases happen only with lesser known companies in the  market. I believe that this scenario should change for the better within a couple of months.”
Also, the tightening of distribution credit has still not stopped, and this is further adding to the cash-flow woes of partners.
The other big challenge is the lack of the right skill-sets. Nearly 52 percent of the respondents say that they don’t have the right skill-sets to provide the solutions and services that customers are asking for. Comments L Ashok, CEO, Futurenet Technologies, “Customers are demanding services and solutions that help optimize costs and enhance productivity. For partners this means we need to have the skill-sets to provide what the customers are asking for, and this is the biggest challenge. It requires a new approach to business, it means training or retraining your staff. For instance, we have seen more customers seeking cost-
effective solutions, and hence we are building solutions on open source to address this demand.”
Shanbhag has a similar view. “We are looking at making an entry into services such as RIMS (remote infrastructure management services) and SaaS (software-as-a-service), and for this we have to either acquire new skill-sets or retrain our employees.”
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