How to align vendor channel sales and channel partner strategies

How to hire a CEO to ensure business continuity

When an IT channel reseller thinks about business transformation it is also important that they consider their vendors strategy.

In some cases it may be a positive if they are aligned with multiple Vendors. For some positioning it may be important that they are positioned (in the minds of the Buyer) as being deeply connected with a single Vendor to reinforce their technical expertise and commitment.

For technology channel sales partners it is particularly important that their strategy is clearly seen as part of a larger framework that includes the Vendors Point-of-View (PoV) for that technology. It may be useful for the reseller to think of their strategy in terms of a “Value Chain”:

The above value chain is for Lenovo’s PC division but it can equally apply to Big Data, Business Process Management (BPM) or most other technology solutions. The important thing for the technology reseller to remember is that Buyers want a “whole product” solution, not just a piecemeal approach to technology. In other words, they want to buy a story that demonstrates how the channel partner and Vendor are completely aligned and can deliver a fully integrated working solution.

The image below represents the “whole product” that a Buyer needs to know they will receive from their channel sales partner. In order for a reseller to convince the Buyer that they can deliver, they need channel sales training best practicesto be able to communicate a story that shows how their new strategy “backs into” the Vendors value chain and delivers this “whole product”.

Measuring Change

It goes without saying that for change to become embedded in an organisation is must be measured according to pre-determined KPI’s. Interviews by CRNwith channel manager training executives at channel resellers who have gone through the process themselves reveal some interesting insights into the measurements that they found most successful and recommend to other channel partners and distributors:

Dimension Data Americas CEO Jere Brown says “Measuring and tracking progress with a balanced scorecard is key to a successful transformation, he said. “In everything that we do, we have strategic objectives. “We have a dashboard of 12 business priorities. We probably have two or three business ventures for each priority. So there are 30 things that are on our dashboard that we measure relative to our business priorities. And our priorities are linked to our three-year future state transformation plan.”

According to Ron Dupler, CEO of GreenPages Technology Solutions, “The biggest mistake I see right now is people continuing to evangelize solutions to customers that aren’t necessarily right by the customer, but conform to what partners know and drive the most profit for their organizations,” said Dupler. “Short-term gain isn’t going to drive long-term customer value. And we need to lead the customers forward through this transformation as opposed to perpetuating the past.

Christopher Hertz, founder and CEO of New Signature, says “many solution providers end up not making the business transformation change because they refuse to forego short-term satisfaction in order to achieve long-term gain”.

He compares it to a child that can either have a single cookie that is put in front of him or four cookies if he can resist the single cookie for a certain period of time. The same is true, Hertz said, for solution providers.

These channel sales professionals go for the “easy money” selling on-premise infrastructure solutions rather than investing in the future cloud services that will cannabilize their current business. “It’s the path of least resistance,” said Hertz. “It’s harder for them to make investments and move customers to the cloud.”

The lessons for the channel partner are to make sure that they are measuring the right elements of change in order to avoid these common pitfalls.

Company Culture

Culture Eats Strategy for Breakfast” – Peter Drucker

The changes required for channel sales transformation are as much cultural as technical. Moving to a new vision, from a deal mindset to long-term customer relationships, transitioning from cash up front to realizing revenue over the life of a contract—all these are just a few of the changes that require a new view of the business and a new mindset, starting at the top and embraced by the entire workforce.

According to Gartner Group, “Substantive business transformation is something members of the organization must do together, and it begins with culture“. They suggest addressing the following four attributes in order to successfully effect cultural change to support business transformation:

  1. How we make decisions – the general leadership style in a business unit, department or enterprise, and its effect on the speed of the organization’s response to incoming signals.
  2. How we engage – the methods groups use to collaborate internally and externally to deliver on their goals.
  3. How we measure – organizational performance metrics and their effect on the focus and direction of a group’s efforts.
  4. How we work – the working style of a group, including how innovations are developed and how problems are solved, which affect the group’s perception of the business value it creates.

The best strategy in the world will not succeed if it is not backed up by the Company Culture. If the business is to be transformed, then so must the Culture.

Implementation: Strategic and Operational Alignment

The same research mentioned earlier by the Boston Consulting Group identified eight factors that drive long-term success, and include both strategic and tactical elements:

Turning the Page. Companies make a conscious decision to go beyond the efficiency moves of chapter one and refocus on growth and innovation.

Creating a New Vision. Companies articulate a clear shift in strategic direction, coupled with room for experimentation.

Foundational Innovation. They innovate across multiple dimensions of the business model, not just in products and processes.

Commitment. There is persistence from leaders in the face of inevitable setbacks and internal opposition to unproven shifts in strategy.

Imposed Distance. There is a willingness to shift from the historical core business model and its underlying assumptions, often by creating a deliberate degree of separation between the new business model and legacy operations.

Adaptive Approach. Transformation unfolds through trial and error, with ongoing refinement of a flexible plan. This strategy often requires additional efforts to recruit new channel partners.

Shots on Goal. Companies do not pin growth hopes on a single move but rather on deploying a portfolio of moves to drive growth.

Patience. There is adherence to the vision over a multiyear period.

According to CompTIA’s “Managing A Successful Business Transformation”, the following are key questions to ask during the implementation stage:

  • Action Question 1: What Will Change?
  • Action Question 2: Who Will Be Affected? Who Is Accountable For The Change Work?
  • Action Question 3: What Is The Defined Outcome / Objective?
  • Action Question 4: What Resources Are Available / Required?
  • Action Question 5: What Is The Financial Justification For This Change?
  • Action Question 6: What Are The Specific Assignments / Milestones?
  • Action Question 7: What Are The Metrics / Accountability Process?

About the Channel Institute:

The aim of the Channel Institute is to bring a more formal, standardized structure to training for channel business professionals. In particular, the Institute aims to focus on the vastly under-served segment of training and certification for those that are relatively new to the channel management profession.