Whitepaper - Developing a Productive Partner Ecosystem.2014

Developing the Channel

Building a Productive Partner

Channel EcosystemA Point of View

| © Copyright 2013 Hitachi Consulting2

What do you aim to get out of the partner ecosystem?

Increase Revenue & Value

• Provides a sales force multiplier

• Align with Partners that create extra business value –1+1=3

1

Increase Reach

• Serve customers in more regions, segments, and geographies that the current FTE base could meet

2

Increase Relevance

• Increase market perception by more landed messages to more customers

3

Increase Return on Investment

• Using influencers and partners to increase the market exposure to your products

4

So…

Does your organisation

achieve its objectives

with the ecosystem?

Is it clear what $1

investment in the

channel will do?

Do you know how to

flex the channel to

increase revenue?

Do you know how your

channel compares to

competitors?


What we’ve seen at other places

• No idea where the revenue – which partners, which segments, when

• No connection of partner activity to the bottom line

• Are your partners selling on price rather than selling the value of the full service you offer?

• Are the aggregators eroding your margins?

Revenue & Value

• No idea if the partners are the right partners – for segment, geography, product

• Conflict between the Direct Sales Team & the Partner Team

Reach

• How do you engage the partner – as a relationship

• No idea how the channel partners compare with competitor ecosystems

• No idea if this partner ship is significant or committed to by the partner

• Lack of clarity of now partners can build value on top of the project

Relevance

• Mud sticks approach - “Let’s get as many resellers / aggregators as possible”

• The eco-system can be ‘lunch club’ or ‘frequent flyer programme’

• Lack of clarity of the goals of the channel

• Lack of continuous improvement – of the programme, the partners and the product mix by partners

Return on Investment


The Challenge with partner and alliance Programmes

Which Partners?

Leveraging marketing

spend

Leveraging the sales team

Which Complementary

Offerings?

Access to Decision Makers

Brand Alignment Access to Right

SkillsMonitoring progress

Do you have a partner

How do you increase Revenue, extend customer Reach, ensure

Relevance to customers, and increasing the Return of Investment of

each programme?


Managing the portfolio of partners is a complex task

Your CompanyCustomer

Sales Dimensions- Product

- Geography

- Customer Segment

Marketing- Direct

- Co-branded

- Through Partner

Service- Direct

- White Label

- Third Line Support

- Consulting

Channel Support- Alliance Manger Time

- Joint Sales/Mkting Funnel

- Privileged Access

- Documentation

- Training

- Investment Funding (PoC)

- Lower Cost Resources

Buying

Dimensions- Product

- Geography

- Customer

Segment

- Customer

Lifecycle

Aggregator / Reseller (e.g. compare.com)Aims to commoditise the market, selling on price and

equal comparisons

Professional Advisor (e.g. Big 4 / IFA)Influences Sales. May sell directly or introduce another

partner.

Additional Value by IntegrationAdds Product(s) with their own products & services to

increase value or specificity of the solution

Solution Developer / White labelIncorporates the product within their offering (often white

labelling the product)

Direct Sales Team

Why does the

customer

want to buy?- A Valued

Solution

- Ease of

purchase

- Trust


Designing a Productive Partner/Channel ecosystem

Capability –

• Marketing

• Sales

• Service

• Delivery

Lo

w

LowMarket Relevance

- Overall Market Share

- Overall Impact on Market

High

Hig

h

Growing

Influenced

revenue

Recruit

Develop

Ideal Partners : Optimise Reach

- More products

- More Segments

- More Locations

- More Revenue

Warning –

reputational risk

- Increase Capability

- Increase Revenue

Warning –

RoI Risk

- Increase Revenue

- Support market

relevance of

partner Optimise

Potential

Partner Pool


Partner Management Frame work

Where do I spent my £1 with my Partners? What is my ROI?

Partner Lifecycle Management

Data Driven Decision Making Alliance Management

Joint Marketing, Sales & Service

Joint Pipeline

(CRM)

Investment &

Incentive Monitoring

Communication

- e-mail

- Social Media

Training

Portal Management

- Web-site

- Social

Partner Dashboard

- Partner Performance

Resources

- Documentation

- Credentials

Budgeting and

Prioritisation

Recruitment

Framework

(New Partners)

- New Partners /

Competitive recruit

Partner Maturity

Development

- Sales / Delivery/

Services / Marketing

Partner Mgmt

- Levels of Mgmt

- Moving up / down

tier of support

Extension

Framework

(Existing Partners)

- new products /

segments / geog.

Ecosystem Review

- Market Potential

Ecosystem Strategy

- Match to Business

Strategy

Joint Planning

- Account Mapping

- Business Goals

Partner Marketing

- Joint Marketing

- Funded Marketing

Partner Sales

- Deal Registration

Pre-Sales Support

Partner Driven

Service Delivery

Service Delivery

Support

- 3rd Line support

Partner Capability &

Profiling

Target Setting

- Capacity


How to optimise a Productive Partner/Channel ecosystem


Measurement Alliance Management

Joint Marketing, Sales & ServiceBudgeting and

Prioritisation

1. Match your

strategies

• Review the

Ecosystem incentives

& composition and

compare against

business strategy.

• Validate the customer

& partner experience

across the partner

programme

5. Optimise the supporting infrastructure

• Assess current technology, data, and data

quality to measure and monitor success

2. Validate the ROI

• Review the Roi of this

channel against

others in the

company &

competitors

3. Build the Partner Lifecycle Framework

• Create a clear process for selection,

recruitment, development & disengagement of

partners

• Define the tools to support teach phase

4. Build the Partner Maturity approach

• Define the tools and resources to increase

Partner maturity in sales, marketing & service

6. “Make it Real”

• Create Partner specific action plans

• Drive a Connected Marketing & Sales process

– both through indirect & direct sales

• Review the incentives and behaviours of

alliance managers and match to strategy,

measurement & partner goals

7. Target the Partner support tools

• Assess current technology, data, and data

quality to measure and monitor success

• Review the relevance and impact of each

partner resource

• Embed continuous improvement into the

alliance programme


Hitachi Consulting Examples


Measurement Alliance Management

Joint Marketing, Sales & ServiceBudgeting and

Prioritisation

1. Match your

strategies

• Partner Channel

Review

• Roadmap for World

Class Marketers

• Hosting market

analysis

• Impact of off-

shoring on Client

Business

5. Optimise the supporting infrastructure

• Partner Data Share

• Systems Integrator Partner ‘Heatmap’

• Marketing Governance Implementation

• Partner Impact Reporting

• Implementation of optimised opportunity

management reporting

2. Validate the ROI

• Systems Integrator

Partner ‘Heatmap’

3. Build the Partner Lifecycle Framework

• Cloud Partner Development Framework

• Partner Prioritisation Framework

4. Build the Partner Maturity approach

• Partner Prioritisation Framework

• Partner Capability Evaluation & Planning

6. “Make it Real”

• Rollout of a Partner programme across

Western Europe

• Augmenting the Sales teams with Partner

Sales Teams

• Implementation of Connected Sales &

Marketing

• Coaching in Sales & Marketing Planning

• Implementation integrated programme for

product deployment to/with Partners

7. Target the Partner support tools

• Continuous Improvement – implementation

of learning circles

• Optimising Customer Communications

• Mid-Market Customer Renewals Project

Example of Similar Projects for one clientBuilding a Productive Partner Channel Ecosystem


Benefits:

Dashboard built and managed

as a one-view of progress and

areas of concern

Regular community calls for

all subs

New relevant, up to date

material each week, driving

coaching and learning

opportunities

SharePoint site developed to

facilitate learning and sharing

Onsite workshops to help

prioritisation and effective

landing

Challenges:

■ The client was launching a new global partner alliance programme & each country in

the region needed to adapt the programme for their country specific partners.

■ Hitachi Consulting was engaged to drive economies of scale in delivering this new

programme by building a community of project managers across Western Europe to

drive a successful landing of the new partner programme across the region, including

best practice sharing and building a dashboard to measure success in each sub which

can be used as a single view on roll out status.

Solution:

■ Coordinate the roll out and facilitate country workshops to prioritise local partner

alliance programme implementation activities

■ Develop a project status dashboard and facilitate collaboration with a team SharePoint

site.

■ Develop “learning circles” to enable sharing and effective execution

■ Identify and share best practices

■ Facilitate local workshops to help prioritise activities associated with landing the new

programme most effectively

Global Software Company

Create a regional community to implement new

Partner Alliance Programme

1


Benefits:

Increased visibility of partner

and competitor landscape

More effective engagement

with the channel

Recommendations for building

the recommended partner

base

Best practices shared

Cross & Up-sell opportunities

identified

Purchase cycle strengths

identified

Challenges:

■ Given the limited resources available, the technical product team were looking for

opportunities to more formally engage with channel partner community and to identify

investment opportunities to leverage the channel to grow revenue.

Solution:

■ Hitachi Consulting ran an assessment across 60+ subsidiaries, including Current State

Assessment, Financial Analysis, SWOT Analysis, competitive Analysis, Partner

Prioritisation Framework, Partner Execution Assessment, and Partner Engagement.

■ With this information the technical product team had a picture of channel ROI and

potential investment areas, plus a model to coach and support each subsidiary.

Global Software CompanyAlliance Partner Channel Strategy

Recruit & Build Mode (high priority)

• Invest in these partners to grow and develop

• Share leads to evaluate success of closing deals

• Co-fund joint marketing campaigns

Execution Mode

• Focus and train sales, marketing and services organizations to capture the revenue opportunity

• Monitor and reward Year on Year growth

• leads passed primarily to this group of partners

Deselect Mode

• Reduce investment & help ‘self-service’ engagement

Upgrade & Migrate Mode

• Need to work with partners to educate them on Developer tools

• Look at ‘outsourcing’ developer tools sales to specialist partners

Alliance Prioritisation Framework


Benefits:

“This gives us the inside view

that we need to build the right

capacity and capabilities for

our partners. This Workshops

are the fundament for all

planning activities in the next

fiscal year.” Partner Sales

Lead

“The Root Cause Workshops

were driven by good

discussions of which partners

to invest in to drive our

business to the next level.”

Partner Lead

Background:

■ The client has a number of data systems that provide historical information of partner performance,

of varying data quality, but no mechanism that assesses with partners where they need to improve.

Challenges :

■ The client was looking at focusing investments in the partner eco-system to help drive increased

revenue, market share, and perceptions. This required looking further than pure sales &

opportunity numbers into a qualitative assessment sales, marketing, delivery and product

knowledge.

Solution:

■ Hitachi Consulting built a SharePoint and InfoPath based survey targeted at specific partners, and

drove a process with the product teams to shape the survey

■ Using capabilities of SharePoint, provide real-time monitoring of the survey, and reporting,

connecting with quantitative data sources for additional insight

■ Run root-cause workshops with the product, and country teams to uncover the core issues if the

ecosystem was not meeting it’s potential for revenue and market share

■ Work with the regional and country teams to create an investment plan to take to the annual fiscal

planning process


Partner Capability Evaluation and Planning

1

SurveyRegional

AssessmentCountry

Level Plans

Regional Knowledge

Sharing

InfoPath PowerPivot PowerPoint SharePoint


Benefits:

Increased Revenue

The data matching process

provides potential new customer

information, with additional

significant opportunities around

inactive/dormant customers

Customer retention

An opportunity to increase

customer renewals and target x-

sell & up-sell opportunities within

existing customers

Campaign alignment

Opportunity for the client and

Partner targeting to be more

consistently aligned

Challenges

■ Accompanying the B2B SME relationship programme there is a need to ensure that

partners involved with the client are aware and integrated into the same approach to

optimise the effectiveness of CRM.

The Solution

■ Hitachi Consulting were engaged to develop and project manage a pilot programme to

use a third party to match data between an alliance partner’s sales list and the client’s

one to identify potential renewal opportunities according to the relationship programme

lifecycle

Global Software CompanyPartner Impact Reporting

Customer

Alliance

Partner

Client

3RD Party


Benefits:

Sales

• Influence Revenue

• New Revenue

• Deployment related revenue

• Meeting joint business planning targets

• Sales Pipeline Total

Commitment

• Join business planning targets

• Total Marketing Leads

• Total Number of staff trained across different products

• Existing training

• New training

Executional Excellence

• Pipeline Accuracy

The UK Partner & Alliance

team are able to allocate

funding and resources against

the partners which provide the

greatest return on investment.

Partner account managers are

able to quickly slice and dice

and compare partner loyalty

through a self-service

SharePoint.

Solution:

■ Hitachi Consulting developed an SI Partner Heat Map that can be used to evaluate

individual SI partners – and stack rank SI partners against one another - via a

transparent set of criteria.

■ The criteria was identified, prioritised and defined through a series of interviews with

key stakeholders in the partner team. Following this they were assessed for data

availability and included to form a final set of measures.

■ Criteria included:

Global 500 Software VendorSystem Integrator Heatmap


Benefits:

Increased sales pipeline –

target $6m for this segment

Increased alliance partner

pipeline – for one partner

increasing their annual

turnover by 10%

Highlighted the bottleneck of

telesales for covering

marketing, pipeline and

account management.

Solution:

■ Select key partners around category products to drive new pipeline

■ Engage customers through tele-sales to enable direct connection to partner and

release telesales time for other opportunities


Augmenting the sales team with selected

alliance partners

TARGET SOLUTIONS

TARGET PARTNER PROFILE

Product A Product B Product C Product C

LocationIndustry

SpecialismSolution

CapabilitySales

Readiness

TARGET

CUSTOMERS

Customer Segment

Transactional Purchase

No Pipeline

Existing Pipeline

Subscription Purchase

New Customer

Renewals

CUSTOMER

Agree to talk and share data

with qualified partner

PARTNER

Engage customer to assess

their needs and provide

recommendations

Client

Introduction

Client’s Customers’ Benefit

Improved Customer coverage and access

to product specific knowledge in SI Sales.

Faster connection to partners

Enhanced Customer service & Satisfaction

Client Benefit

Improved market share & Compete

Partner drives Sales and Deployment

Focus on EA sales

Improved Sales/Customer ratio from 1:125

to 1:15

Alliance Partner Benefits

Partner Revenue;

Demonstrate performance compared to

competitors;

Net New Customers;

PLAN EXECUTE MEASURE

Documents

Whitepaper - Developing a Productive Partner Ecosystem.2014