Guest column: What drives a successful partnership?

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This article appeared in the 15th October, 2007 issue of CRN magazine.

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Guest column: What drives a successful partnership?
A lot can be said about the company you keep. Like a famous writer once said, “Tell me the company you keep, and I’ll tell you who you are”. Express Data is a classic example of what it is to be a sum of its parts – most obviously its partners, both vendor and reseller. In distribution we all aspire for a perfect state of union – one that delivers the highest unique value. It’s something my science teacher called a ‘covalent bond’, which for those of you who remember back to those high school days in the science lab, is the strongest chemical linkage and the process responsible for forming a diamond. Distributors hold a unique channel position, by way of the fact they sit in the middle of resellers and vendors, but it certainly offers up a very interesting perspective. I will look to share with you this view and attempt to answer the question: what should an ideal partnership look like in the Australian ICT channel?

Resellers at the front line
You will have to excuse me for all the mining analogies in this column, but resellers in the channel really are at the coal face. Competitive forces will always mean that technology, as a business enabler, will have a market, but the onus for its planning, integration and management, not to mention education, remain in the laps of ICT resellers more often than not. This is why they need the support of distributors and vendors, because the job is so huge it’s not achievable if only dealt with in a one dimensional fashion. Generally, the most successful resellers are the ones that know how their distributor operates and how to get the most out of them. They also know what buttons to push in order to get vendor support. My experience in the channel leads me to believe it is this proactive approach and open dialogue between tiers that leads to the most favourable outcome. Now, I don’t pretend to have all the answers, but regardless, here are my thoughts:

Differentiate
The reasons to differentiate for a reseller are two-fold. Most people realise they need to differentiate from their competitors so their customers see a unique reason to deal with them, but resellers should also differentiate for vendors. Today mass customisation is a real life story and vendors are embracing it, but they use the channel to tell this story. So every reseller is different and for that reason has a unique vendor proposition, but they need to market back up the value chain to get it across.
I can say with absolute certainty that should a reseller go to a vendor and say, “I’d like to sit down with you and write out a business plan about how to take your products to market,” you will be received with opens arms.

Show you're serious – get certified
Many vendors will not prohibit resellers buying their products if they do not have all the certifications suggested, but some do, and most offer incentives to ensure that these certifications are taken seriously.
They do serve a purpose, despite what the sceptics will argue. At the very least if a reseller wants to develop a healthy relationship with their vendor it should be a no brainer, because at the end of the day, from a vendor’s perspective, they are held accountable by two things: money – incoming and outgoing.
Obviously there are revenue and profitability targets, but there are also ROI indicators that vendors are measured against for the amount of investment they outlay in supporting the channel. If you are not certified appropriately, this investment becomes a very hard thing to justify for a vendor. Therefore, if you are a reseller and are serious about taking your vendor relationships to the next level, my suggestion is to embrace their partner program. Don’t sit back. Often it is the early adopters that are the ones who get the loyalty, credibility and subsequent vendor support.

Play to your strengths
More and more I speak with vendors who say, “I need the channel because I just can’t scale to the level I need to in order to be successful.” Gone are the days when there were fears that vendors would all go direct. Distributors offer real value, and so do resellers. It all goes hand in hand and doesn’t operate near as effectively if one is left out of the equation.
What resellers really need to be doing to capitalising on this in the vendors’ eyes. They need to showcase their agility and speed. Most resellers are not global operations with layer upon layer of bureaucratic tape and this advantage is very attractive to vendors who need to make things happen quickly in a local market, which is often an adaptation from a global initiative. It is therefore a quality that stands out when vendors see it in action. Don’t think they don’t notice – believe me they do!

Vendors are the backbone
I liken vendors to the base upon which distributors and resellers operate, because at the end of the day, without the product we don’t have much to talk about. As our industry matures, you notice that this base is becoming stronger, and for those of us that make a living out of it, things are a lot clearer and more structured than they were in the early days, which is a good thing. This is somewhat of a paradox however, as the very nature of technology means it’s always changing – there are always going to be disruptive new players.
I would like to touch on a couple of issues that concern us all. These are areas where vendors, in particular, can make a real difference.

Partners need to make a profit
We are all in this business to make money – this is reality – however, it is sometimes overlooked in the channel community. At the end of the day it comes back to sustainable health, because when someone in the channel squeezes someone else on the price, the repercussions circulate all the way around.
A reseller doesn’t exist simply in order to generate returns for vendors and distributors. There are many examples of vendor and distributor programs that drive profitability for resellers, including ones that reward resellers for identifying opportunities even if they don’t actually win the business themselves. Pick the right ones for you and embrace them.

Be consistent
The ICT industry is in a constant state of change, and that’s great! It is the continual technological innovation and refresh cycles that drive growth for us all. However, that does not mean we can’t be consistent in our approach to partnerships.
There is a tendency for short term thinking and planning that extends out as far as the next quarter’s end. The most successful partnerships that I see are often long term ones, where both parties have confidence that neither will suddenly divert focus, or head off in an unexpected direction. This confidence fuels reinvestment in the partnership from
all parties.

Keep it simple
Every day we are immersed, at the forefront of technology, with a multitude of solutions that drive productivity gains and save costs in ways that were unimaginable just a few years ago. However, as an industry we are still in our teenage years and this can show in some of the systems and processes that run in the backend of many channel organisations, particularly around transactional systems and processes. The more complicated a transaction becomes, the more forms that are needed, the more convoluted the rules of a rebate program results in less profit that can be made. The message here, particularly for vendors, is to make life simpler for resellers, and the results will exceed expectations.
The underlying issue that I believe to be important is, there then has to be ‘communication’. It may sound like a cliché but the best partnerships I am privy to, sitting in the middle as a distributor, are not only the ones where people talk openly, but where parties also listen and take feedback on board. In the end, isn’t that what partnership is all about anyway?

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