By K.T Lim, VP, Human Resources, Avnet Technology Solutions, Asia Pacific
The top-notch service, support and expertise that we provide to partners and customers will not be possible without our self-motivated and professional employees who live up to the core values of Avnet.
Travelling around Avnet’s offices around the APAC region, I am always delighted to meet and have conversations with our young, energetic and professional team. With trust and respect to their leadership team, our young crew feels comfortable and readily shares their thoughts and career aspirations to me. To be able to have such open and honest conversations with people is important in the success of any organization. From an HR perspective, the ability to speak openly accelerates the speed at which concerns and issues are identified, managed and resolved.
To showcase our appreciation to employees’ loyalty to Avnet, we take the lead in rewarding the hardworking men and women who make Avnet the excellent organization that it is now. Avnet has in place various programs at global, regional and local levels to constantly recognize our star performers. We have exchange programs that expose the potential leaders to different challenges and opportunities so they could grow out of their comfort zone and have a more panoramic view of the market and the organization.
The ever-changing technology landscape gives rise to a need to continuously invest in the training and development of our staff. To help our employees develop professionally and personally, Avnet provides custom professional training and certification as well as self-improvement training opportunities.
For a number of years now, Avnet has been conducting annual global surveys to make sure employees feedback and grievances are heard and addressed, and improvements are made. So far the results have been positive. Our employees stay with Avnet for the following reasons: firstly, they derive great satisfaction from the challenging work as the company always aspires to be forward-looking and innovative; secondly, there is healthy and constant communication between the leaders and the employees; thirdly, the company makes sure our staff attains good work-life harmony.
As we realized the changing work style and priorities of our people, we also started to incorporate well-being programs for them, which encompass activities that boost their physical well-being, social and better involvement in the communities around them, and financial management which helps them to be free of stressors that distract them from work. A well-rounded and fulfilling working experience is desired by the new generation of employees and this is what we strive to give to them at Avnet.
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EMC and Avnet have recently entered a strategic partnership to introduce the hyper-converged appliance VSPEX BLUE in the Asia-Pacific. EMC’s Gil Shneorson, and Avnet Singapore’s Nicholas Tan discuss the features of hyper-converged infrastructure, its market growth potential, as well as the EMC-Avnet relationship, in which Avnet redefines the role of a distributor.
-An exclusive interview with executives from EMC and Avnet Technology Solutions
Avnet Technology Solutions and EMC recently announced a global partnership to build, market and distribute VSPEX BLUE, a hyper-converged infrastructure appliance for the midmarket and enterprise segment. The relationship that spans globally including the Asia Pacific region is game-changing and first of its kind in supplier-distributor relationship. For EMC, VSPEX BLUE is a pure channel play while Avnet redefines the traditional role of a distributor by being involved in the supply chain management, manufacturing, marketing and distribution of the new appliance.
During the VSPEX BLUE launch event held in Singapore on Feb 6th, we caught up with the two leaders, Gil Shneorson, EMC VSPEX Vice President and General Manager, and Nicholas Tan, Avnet Technology Solutions Country General Manager Singapore, to get an exclusive update on Avnet and EMC relationship around VSPEX BLUE, the unique attributes and value that VSPEX BLUE delivers to customers and Avnet’s role in the EMC-Avnet relationship.
EMC: A leader in converged infrastructure
Gil Shneorson has been in charge of the VSPEX business in EMC for many years, and is extremely excited about bringing this new hyper converged appliance to the market. He pointed out that with VCE, the VBlock systems, and the VSPEX reference architecture program, EMC had been firmly established as the market leader for converged infrastructure within the past few years. EMC had, he added, amassed expertise in converged infrastructure in recent years as well. As such, being the market leader in that segment, they had to ensure that all new products were of high quality, and promised value to users.
Launching VSPEX BLUE at the VMWare Partner Exchange in California, he explained, was a good move precisely because of the fact that VSPEX BLUE is built around a program for partners. As opposed to market observers commenting that EMC was late in the hyper-converged infrastructure appliance (HCIA) game, Gil thought that EMC’s timing was perfect, since it could address all prior concerns and preferences of customers. With EMC’s entry into the hyper-converged arena, he expressed confidence that EMC could bring more value towards customers. Citing an example of VSPEX BLUE’s capabilities for the VMWare customer, he shared that the appliance could be set up and operated within 15 minutes: something that had never been done before. From the VSPEX BLUE Manager, users can also conveniently access electronic services, such as EMC knowledge base articles.
EMC leverages Avnet’s global distributor capabilities
The reason for EMC’s partnership with Avnet around VSPEX, he noted, had been bolstered by a strong relationship over the last three years. For the launch of VSPEX BLUE, the company had wanted to leverage the channel like they had done earlier with the Reference Architecture Program, while offering EMC Support. To accomplish these two objectives, Gil said they decided to redesign the supply chain in a way that allowed EMC to leverage Avnet’s global network. In the process, a partnership that allowed Avnet to participate more was also created, allowing EMC more margin for the channel altogether. These steps, he said, marked a fundamental change in their go-to-market strategy, given that it was a channel-only play.
Even as EMC sales reps have quotas to meet for VSPEX BLUE, Gil said they could not quote VSPEX BLUE directly to end users, and would have to go to a reseller. Doing so would, according to him, create a better partnership and more joint opportunities with their reseller community.
He stated that EMC had been partners with Avnet – a value-added distributor – for many years, given their understanding of high-end solutions, and the importance of adding more value to the final product. With the partnership model adopted under the launch of VSPEX BLUE – he highlighted that they now had the ability to integrate, leverage financing offered to resellers, as well as leverage supply chain capabilities. “We are very excited about this partnership” said Gil.
Strong traction for VSPEX BLUE expected from Singapore, Australia
Gil said that VSPEX BLUE’s launch had broken several records, with hundreds of users going to the EMC website and requesting a quote, despite it being an enterprise and mid-market solution. He said that this indicated high interest levels and pent-up demand for an EMC-made hyper-converged product, especially since EMC was a brand they trusted to provide diligent support. Turning to Asia, he commented that it was the markets with the tendency to adopt new technology sooner that react sooner, and added that Singapore was such a market, thus explaining their choice to launch VSPEX BLUE there. He noted how interest was rising among Southeast Asia, Australia as well as in India, which led them to direct efforts towards the markets they knew to be more mature. Gil stated that EMC’s partnership with Avnet was designed to do just that.
Reverberating Gil’s excitement about the launch, Nicholas is particularly happy seeing Avnet’s role in this partnership transcend beyond the traditional responsibilities of a distributor. He spoke enthusiastically about the synergies within the partnership, and the new opportunities on the horizon for Avnet Technology Solutions and EMC.
Avnet – EMC VSPEX BLUE Singapore Launch
Nicholas pointed out that Avnet’s collaboration with EMC to launch VSPEX BLUE outside of North America was a global first as a distributor, and something unique and different as well. He explained that Avnet’s duties would involve the building and assembly, integration, logistics, shipment, and price setting of VSPEX BLUE. To capture the market in twice the speed, he said that Avnet would reach out to the entire partner ecosystem.
Avnet and EMC would be sharing an end-to-end partnership, said Nicholas. EMC would continue with its strong suit of R&D work and innovation to build the hyper-converged infrastructure – while Avnet would be responsible for bringing the final appliance to the market.
Hyper-converged infrastructure market in Asia-Pacific is growing
IDC’s research, he said, showed the hyper-converged appliance market to be worth $600 million worldwide, and about $200 million within the Asia-Pacific. The sheer market size would translate into many opportunities for Avnet, he said, as well as its partner ecosystem, to go after the mid-market space, which is where demand for VSPEX BLUE is strongest. Nicholas expressed his excitement at the chance to drive incremental business for Avnet, EMC and their partners.
VSPEX BLUE well-positioned to address market needs
Nicholas detailed some of VSPEX BLUE’s unique value propositions. Firstly, EMC was the last to launch its hyper-converged offering, which meant they got to pick the best technology to put inside the appliance. Secondly, EMC was working with world-class virtualization company VMWare’s EVO:RAIL appliance in developing VSPEX BLUE. Thirdly, EMC would include its own software as part of the total packaged solutions that come with VSPEX BLUE. The last and strongest value proposition, he said, was the world class customer support EMC provided globally. All these attributes, he said, would set VSPEX BLUE apart from its competitors.
Nicholas stated that Avnet Singapore was very proud to be EMC’s top contributor for high-end storage in FY2014. With the launch of VSPEX BLUE, he expressed his hopes that Avnet Technology Solutions Singapore will leverage its earlier success in the enterprise segment and achieve the same success for EMC in the midmarket. He added that Avnet would work to maintain its momentum in serving both the high-end and the midmarket, and continue being the number one distributor for EMC in Singapore.
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At the end of 2014, we caught up with Radha, VP of Finance for Avnet Technology Solutions to get an update of how TS Asia Pacific performed across the year and the strategies priorities for finance in 2015.
Phenomenal Fiscal Year 2014 for Avnet
Radha highlighted that FY14 was another strong performance year for Avnet Inc, as revenue grew to a record $27.5b, an 8 per cent year-on-year improvement. Operating income came in $931 million, indicating growth of about 15.8%. He further pointed out that diluted earnings per share saw a 16.8 per cent year-on-year growth to $4.24. Altogether, revenue growth, expanded operating income, and earnings per share (EPS) improvement made FY14 a “phenomenal” year for Avnet.
Historic Highs for Avnet Technology Solutions, Asia Pacific
According to Radha, significant progress was made in FY14 in its business model as well as in its financial performance. He shared that historic highs were achieved in Avnet TS APAC’s revenue per quarter and operating income per quarter. Despite the tight ongoing situation in China and India, Radha pointed out that the company had managed their working capital well, further stating that Avnet was going ahead with a much stronger business model and balance sheet into FY15. He also emphasized the disciplined cost management undertaken by the company across its business units as a key contributor to Avnet’s strong performance in FY14.
Fiscal Year 2015 Finance initiatives
Going forward, Radha explained that a key initiative for Avnet’s finance team in FY15 would be to create a clear linkage between the business strategic initiatives driven by the businesses, and the financial measures and outcomes from those initiatives. Secondly, Avnet’s finance teams will also continue to focus on cash flow management, to ensure that such efforts, along with working capital management, would continue to generate significant and positive cash from their operations.
The third area of focus is to ensure that the finance team is fully involved in the dialogue and decisions leading to M&As as well as divestment, thus making sure that that the company can fully realize the benefits derivable from M&A activities.
In the area of talent management, Radha noted that Avnet was, on a global scale, placing emphasis in creating a quality finance organisation by providing opportunities for talented employees to move between business units. The company would launch talent bench strength as well, allowing it to address market opportunities and support its future growth.
Fundamental Building Blocks of Value Added Business Analysis
When it comes down to conducting business analysis in order to identify challenges and generate solutions, data integrity continued to be the foundation for any meaningful analysis. Every organisation needs to have one version of the truth, in order for the finance team’s analysis to be understood clearly.
On the subject of line card expansion, Radha highlighted that Avnet, which carries many OEM products, intends to stay invested on those products. It would therefore be prudent that the company knows the kinds of returns expected on those investments on a consistent basis, and for Avnet to measure those considered important or relevant for businesses in helping them achieve their business objectives.
Being a technology distribution company, Radha said that Avnet saw its margins to be under constant pressure. In that regard, he stressed the necessity for analytical work performed by the finance department to be meaningful, and provide value-add to the business, as well as to keep track of the amount of resources invested in each line card.
Tool & Innovations in the Finance Organisation
In the recent budgeting cycle for FY15, Radha shared how Avnet has adopted the BW tool for budgeting worldwide. The implementation subsequently shortened the accounting cycle, as well as long-term planning. In addition, Avnet has also introduced a module to the ERP system that helps with account receivable management, as well as a tool that automates accounts reconciliation process, which is expected to improve visibility and quality of a balance sheet, along with a faster addressing of outstanding issues. Company-wide, Avnet has adopted HANA to improve its business analytics reporting, the speed and quality of analytics and a faster close cycle in a manner that would help the business meet its goals.
All of these implementations are expected to improve the efficiency of the accounts closing process, and positively impact profit.
In the next conversation, Radha will talk about the business partnership between the CEO and the CFO. Stay tuned!
We recently caught up with William Chu, Regional President, Avnet Technology Solutions Asia Pacific. The executive talked about the latest and greatest at Avnet William happily shared the news that the company had made tremendous progress during the fiscal year 2014 ,with notable accomplishments including improved quality of revenue and revenue growth, six consecutive quarters year on year performance improvement, improved operating performance of business business unit and increased value to the market place.
On the subject of Avnet’s footprint expansion in the region, Chu said that Avnet continues to evaluate M&A opportunities that fit Avnet’s strategies but remains prudent with decisions on where the company put its investment. Avnet has grown its footprint in the Asia Pacific region with acquisitions of companies like Azure in Singapore and Malaysia, OnTrack Solutions in India, Sunshine in Vietnam and PT Datamation in Indonesia. Chu said that Avnet is now moving into another stage whereby it is investing in new strategic areas such as cloud, big data and security and networking.
Strategic Priorities for 2015
Going forward the current fiscal year 2015, William elaborated on Avnet’s strategic priorities for FY2015.
Firstly, William highlighted the importance of achieving organic growth in new segments. Currently there are several growth areas, including cloud, security and networking solutions, services and linecard expansion into the global markets.
Secondly, Avnet’s regional president highlighted the importance of delivering better products and services in the existing segments, which can be achieved through collaborations with more channel partners and improving Avnet’s resold services.
Last but not least, Chu said Avnet plans to improve its productivity in the coming year. There have been continuous efforts from the corporate to help improve efficiency; for instance, Avnet currently has implemented the Supply Chain Operations Reference model (SCOR) which measures the efficiency of delivery of each order, which would in turn help optimize the company’s go-to-market and fulfilment process. In addition, the company also looks to invest in better IT so as to improve customer services.
To meet these objectives, William emphasized the importance of having engaged and motivated employees. Avnet recently launched its Employee Opinion Survey which collects feedback from the employees and provides a blueprint for better employee engagement. Avnet Asia Pacific has also started offering their top performers with incentive trips. Lastly, Avnet is also working together with the suppliers to provide sales and technical training as part of the enablement program, so its employees can deliver better services with confidence.
SAP’s big data and analytics offering is a good fit for Avnet’s server and storage portfolio
Avnet’s expertise and strong business partner network in the Asia Pacific market gives SAP robust access to mid-market space
In September last year, Avnet Technology Solutions, Asia Pacific became a distributor of SAP’s full portfolio of analytics, enterprise mobility, database and technology solutions. The strategic supplier relationship spans three main geographies namely ASEAN, which includes Singapore, Malaysia, Indonesia, Thailand and Vietnam, mainland China and India.
In the following video Avnet senior executives Philip Whyte, Vice President, Global Supplier Business Development, and Michael Costigan, Vice President, Marketing and Business Innovation who were in Singapore recently for an SAP business review recounted how the SAP relationship started, what has been accomplished in the twelve months post Avnet’s appointment, and the tremendous opportunities that both Avnet and SAP see in the market as big data and analytics drive technology spend in the APAC region and internationally.
Philip narrated how Avnet and SAP established a strong foundation by doing a comprehensive due diligence and several in-depth strategy sessions, which resulted in them realizing the two companies had very good adjacencies between SAP’s big data and analytics offering and Avnet’s traditional server and storage business. With Avnet’s deep expertise in technology solutions distribution, it was easy to identify that big data and analytics was becoming a critical piece of technology in the market. Michael Costigan underscored how SAP’s offering complemented Avnet’s existing infrastructure relationships with IBM, Hewlett Packard and Oracle and how Avnet’s strong APAC business partner network offers a very robust go-to market in the mid-market space especially in ASEAN, mainland China and India.
Past twelve months, Philip and Michael highlighted that the Avnet and SAP teams will form greater synergies and conduct regular meetings like quarterly business reviews to constantly assess performance, identify areas for fine-tuning strategies as well as map new opportunities for the coming quarters.