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Big Changes in Indirect Channels - Bring New Opportunities to Achieve High Performance

Jun 8, 2008
A major storm is brewing in high-tech sales. Today's customers are interested in complete business solutions rather than product features. This new focus is forcing vendors in many industries to become more reliant on the indirect channel to generate their future growth. Meanwhile, distributors and resellers are turning to services solutions to enhance their margin potential. What's needed now is a new approach that allows vendors to not only ride out the storm but outrun their competitors. Here are the five moves that vendors and channel players can make now to best position themselves to achieve high performance:

1. Build trust -. To build trust - and to rebuild it - it is essential to make things simple yet comprehensive. Many companies are effectively leveraging technology to create such simplicity. Vendors must also work harder to collaborate with their channel partners. Successful channel programs owe much of their success to the fact that they were designed by the channel partners in concert with the vendors. Trust can be fostered by starting small and scaling fast. A series of quick wins can help build trust early on in the relationship.

2. Develop collaborative services - Vendors that want to drive the most effective channel partner relationships will have to upgrade their offers to present a differentiated combination of product, software, service and financing. In some cases, the offer may include a specific solution provided by the partner. The value proposition often may expand beyond the development and selling of the bundles and include codelivery platforms for serving customers. The codelivery distribution model requires collaborative models that integrate the strengths and weaknesses of all parties and provide an infrastructure that can be leveraged by all players.

3. Drive clarity of who gives what - and who gets what - It is important to properly segment partners with differentiated value propositions. Leading vendors are spending the time to effectively profile, segment and package unique value propositions. Their segmentation models reflect the volume potential of different partners as well as their competencies and specializations. Organizations also need to craft offerings that transcend basic pricing and discount characteristics.

4. Improving channel ROI - To properly manage channel returns, it is vital to establish visibility of cost and performance in all aspects of channel programs. The key enablers include:

a) A clear understanding of the economic models for each channel model;
b) Integrating infrastructures that not only facilitate the sales and delivery process but also provide access to performance information; and
c) Establishing governance structures that are integrated internally.

5.Focus on strategy to action at speed - Strategy to action at speed requires:

a) Access to scalable infrastructure, especially in emerging countries;
b) The ability to quickly test and pilot various concepts; and
c) Building the automation needed to facilitate the level of collaboration required between vendors, customers and channel partners.

We firmly believe that vendors searching to achieve high performance must act now to help ensure that their channel programs are as sturdy and effective as they can be. The perfect storm is brewing now. Better to be prepared to take advantage of the opportunities it will provide than to be picking through the debris in a few years' time.
About the Author
Accenture's Electronics & High-tech industry group offers management consulting, technology-strategy and implementation services to all segments of this exceptionally dynamic industry. Read the full article on Big Changes in Indirect Channels to Achieve High Performance . Send an email to Patty Crawford (patricia.l.crawford@accenture.com) if you would like one of our pricing specialists to meet with you.
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