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Management
Tech Data Turnaround
 Tech Data CEO Bob Dutkowsky (in the company’s “solution center”): “As certain as IT spending slows down, IT spending will pick up. It’s one of the few weapons that businesses have to change the game in their market space.” |
When Robert M. Dutkowsky was appointed CEO of Clearwater-based computer distributor Tech Data two years ago, the company was losing $100 million a year. Now, profits at Florida’s largest public company are approaching $200 million. Here’s how he helped turn the numbers around.
» Expanding the Comfort Zone: “We have to be very, very cautious and conservative — but not so conservative that we miss business opportunities,” Dutkowsky says. In May, Tech Data paid $83 million for certain assets of Scribona AB, an IT distribution company with facilities in Sweden, Finland and Norway. Dutkowsky says the company’s $1 billion in annual sales will supplement Tech Data’s $11 billion in European sales. “We’re doing some things that put us a little out of our comfort zone but will hopefully create more value for our shareholders.” Last year, the company also established a joint venture to capitalize on Europe’s growing mobile and wireless-device market.
» Focusing on High Growth: Given that the company posts revenue of $23.4 billion and makes about a 1-cent profit on every dollar, increasing the profit margin by even a fraction can mean millions of dollars. To boost that margin, the company formed a division that focuses on high-growth, higher-profit products. “Everybody is trying to virtualize everything. And virtualization is a set of hardware products and software products that are the hottest things on the market. So we have people that are just focused on those technologies. Customers ... are willing to pay a little more for that, so we’re trying to find those hot spots, those more profitable product areas.”
» Broadening the Mix: “We have to find ways to be more profitable,” Dutkowsky says. “And you do that with different products, different environments and different geographies. You diversify into different places, and we’ve started a lot of that, but we haven’t done enough. On average, I wouldn’t put myself in the pleased category yet. When you sit in my chair, you can’t rest.”
