Incentives Pay

style="font-size: 13pt;" size="3">The
IT business is all about relationships and requires vendors and their
channel partners to work together to drive growth and profitability.
The ties between manufacturers, suppliers, and distributors are
responsible for building products and delivering services that add
value to customers. As the IT market is making transition to new
technologies, vendors must align and invest in partners who share
their business vision in order to sustain themselves in a constantly
changing market place.

style="font-size: 13pt;" size="3">MUTUALLY
BENEFICIAL TIES

style="font-size: 13pt;" size="3">Vendor-partner
relationships are vital to the business interests of both the
parties. For most vendors, a large part of the revenue is delivered
to customers through partners (value-added resellers, service
providers and distributors). Partners are representatives of vendors
to end-customers and they strengthen vendor differentiation by adding
applications, technology and/or services that address customer needs.

style="font-size: 13pt;" size="3">Partners
increase vendor's reach by selling, supporting and marketing
technology across geographies, provide local market knowledge, offer
support to address specific customer needs and improve customer
satisfaction with vendors. Since they have deep and wide ranging
customer relationships, partners can take on financial and
operational risks on behalf of the vendors. Partners have expertise
in areas- vertical knowledge, best offers-that vendors don't
have and can advise customers on the best solution for
transformational/business change.

style="font-size: 13pt;" size="3">By
working with vendors, partners get access to products that their
customers want. They can attach technical and business-related
services and move up the profitability curve based
on the value they provide to the customers. Vendors also drive sales
through the partner
community and create best practices, which have a multiplier effect
on the partners' ability
to sell and increase customer satisfaction.

style="font-size: 13pt;" size="3">STRENGTHENING
PARTNER RELATIONS

style="font-size: 13pt;" size="3">While
there are different strategies that vendors adopt to strengthen their
relationships with partners, listed below are some strategies that
have maximum impact:

• style="font-size: 13pt;" size="3">Recognizing the partner ecosystem
  and business needs

• style="font-size: 13pt;" size="3">Honing partner ability and training
  them to deal with competition in a healthy manner

• style="font-size: 13pt;" size="3">Enabling partners through relevant
  programs/initiatives that optimize sales and bring profitability

• style="font-size: 13pt;" size="3">Ensuring partner sustenance through
  relevant value-adds

• size="3">Encouraging active information sharing to
  promote long-term growth.

style="font-size: 13pt;" size="3">Understanding
what the partner's business entails is extremely important for any
vendor and is the first step to build long-lasting partner
relationships. Knowing the intricacies of the partner's business
help vendors relate to the challenges faced by partners and develop
strategies to work around them. Strategic initiatives are developed
keeping in mind the partner organizations' interests,enables
vendors to gain better positioning in the market against competition
and brings a sense of gratification for partners. As the market
matures and partner needs evolve, vendors must engage with their
partners to align business strategies with those of their own.
Creating mutually beneficial strategies and coupling them with robust
support helps to strengthen business ties. Providing partners with
the required capabilities-pre-sales, demos, delivery methodologies
and resources-to profitably sell solutions bring high partner
satisfaction. Working with partner's operations teams to optimize
work flow, engaging with their sales teams to improve effectiveness
in selling, jointly executing product and service launches and
helping partners to build their ecosystem where appropriate, create
constructive relationships that drive growth.

style="font-size: 13pt;" size="3">PARTNER
ENABLEMENT

style="font-size: 13pt;" size="3">In
order to build a solid base in the channel, organizations that employ
a partner-driven route
to market must focus on partner enablement.By helping partner teams
develop new capabilities and expertise quickly so as to meet customer
demands in an ever-changing market, vendors gain sustainable
competitive advantage and become party to customers' success. In
order to ensure loyalty within the partner community, bring about
partner profitability, and drive partner mind share away from
competition, vendors must implement favorable channel programs. Since
partner profitability contributes to the overall success of the
vendor's business, these programs must be designed for targeted
partner, and value based offerings must be presented accordingly.
While investing in new technology or designing new programs, vendors
must obtain partner's views to ensure strategic alignment.

style="font-size: 13pt;" size="3">While
working with partners, vendors must develop a framework for rewards
and allow partners to participate in multiple programs/promotions.
Designing appropriate value incentive programs help to bring profit
and increases margins around specific solution for the partners.
While short-term initiatives for partners help to boost sales,
ongoing programs that promote long-term growth bring richer dividends
by way of partner loyalty and commitment. Loyal partners ultimately
lead to satisfied customers.

style="font-size: 13pt;" size="3">EFFECTIVE
COMMUNICATION

style="font-size: 13pt;" size="3">While
dealing with partners, vendors need to realize that their business
goals might not completely be their partners' goals. Therefore, it
is important to give room for difference of opinion and work
together to drive a common agenda of acceptance and understanding.
This helps to create a healthy competitive environment. In order to
ensure that partners build profitable businesses, vendors must hold
discussions and conduct forums that will bring intricacies to the
forefront that otherwise go unnoticed.

style="font-size: 13pt;" size="3">Vendors
through their diverse global operations enjoy an understanding of
different environments and best-practices and must pass that
knowledge to partners to bring better operational
efficiencies. Information sharing is important and vendors must keep
partners in the loop while making key changes to the business, ie,
shifting go-to-market strategy, or reprioritizing business focus.
This provide partners with the knowledge to design their
go-to-customer programs. On their part, partners recognize the
vendors who put effort into communication and are happy if their
vendors are 'good listeners' who shape their strategies based on
partner feedback.

style="font-size: 13pt;" size="3">ROAD
AHEAD

style="font-size: 13pt;" size="3">To
ensure that partners address the needs of the customer and are
aligned to the vendors' business vision, a continuous evaluation of
partner relationships is essential. As the market is making
transition to collaboration, virtualization of the data center and
cloud based services, vendors must work in tandem with partners,
share information and ideas, test different practices, understand
partners' need/pain points and adopt an approach that matches
mutual requirements. In the end, vendors that lead technology
transitions and have solid partner programs supporting that position
can accelerate growth because partners look for programs that they
believe will lead them to provide the 'next big thing' for
customers.

style="font-size: 13pt;" size="3">B
RAGHAVENDRAN

(The
author is head, partner organization, Cisco India and Saarc)