ENHANCING PARTNER PROFITABILITY

As the partners evolve to better support their customers, they want a more predictable return on investment (ROI) building solutions, specializations, and relationships. Read these tips from the channel leaders to better understand the key factors that drive partner growth and profitability.

the supplier and benefit from loyalty programs and volume rebates. Monitor the cash conversion cycle to control and manage finance cost. These are some of the areas that partners should pay attention to when looking to enhance profitability.

How do you help your partners drive their profitability?

Arkan Saleh Vice President, Finance & Operations, Mindware

What are some of the key steps for partners to improve profitability?

Diversify product offerings including value-added services, in order to differentiate offerings and increase chances of upsell. Streamline operations by implementing efficient processes and systems to reduce costs and improve efficiency, such as automating order fulfilment and invoicing. Invest in the right tools. Focus on customer satisfaction. It is cheaper to retain existing customers than identify and acquire new ones. Providing excellent customer service and support can help increase customer loyalty and generate repeat business. Monitor prices and margins and adjust them as needed to stay competitive and maintain profitability. Build a long-term relationship with

As a distributor, we support partners and drive their profitability by providing product training and technical support. We also offer marketing services including lead generation, market research, and demand generation activities, helping them reach new customers and drive sales.

By offering value-added services such as installation, configuration, and ongoing support, distributors like us help partners differentiate their offerings and increase their revenue. Inventory management and logistics is another area where we support partners, thereby helping them reduce the costs and headaches associated with these activities. This frees up their time and resources to focus on growing their businesses.

Our partners benefit from our B2B eCommerce platform and marketplace which makes the purchasing process more efficient and also provides a host of advantages like unique offers, volume rebates and loyalty programs. Our digital sales platform is supported with last mile deliveries so our partners can manage just-in time orders, reducing the complexities and costs involved in stock management.

We also offer financing options to partners through alliances, where they can finance the full project rather than on a product-by-product basis.

Do you see a greater focus on services in the channel now?

There has been a shift towards services in the tech channel in recent years. As technology has become more integrated into businesses and personal lives, there is a growing demand for services such as managed services, cloud services, security services, and consulting services to help organizations maximize the value of their technology investments. In response, technology companies and channel partners are increasingly offering a wider range of services to meet these demands, and many are investing in building out their services capabilities to remain competitive in an increasingly services-focused market.

Kinda Baydoun Manager of Channels, Distribution and Alliances - Middle East & CIS at Veeam Software

What are some of the key steps for partners to improve profitability? This is the topic that I discuss the most with my partners constantly – “How do we make sure that their business is always sustainable and profitable?” – In my opinion the answer is very simple: Read the Market, Build Synergies and Focus. Digital transformation didn’t impact customers only. Partners, as well, had to navigate through it as the traditional linear model of selling to customers a large portfolio of random and unmatched products became obsolete. The landscape is shifting to a more inter-connected ecosystem

(Vendors, Telcos, Service Providers, System Integrators, Resellers, etc.). there is definitely an increased collaboration among partners and an appetite to co-create together with vendors and customers.

IDC defined a framework of 8 focus areas for partners as a guidance to help partners remain profitable in this disruptive era: “1/Switch from Resell to aaS, 2/Having the right technology portfolio, 3/Specialization, 4/New Go-To-Market (such as marketplace), 5/Customers (access to C-suite), 6/Competition (creating smart partnerships), 7/Ecosystem (creating synergies) and 8/Solutions. I believe this is a great tool for partners that they can use to design their strategies and develop their key priorities in 2023 and beyond. In reference to the IDC Partner Transformation Framework, I always advise my partners to be the best at what they do. Focus and specialization are key to have a profitable business, and this can be achieved by creating smart synergies within the right ecosystem and by investing in the right talent.

How do you help your partners drive their profitability?

As I mentioned in my first answer, focus and specialization are key to drive profitability. To support our partners in their skill development, we are providing training and certification programs that increase skill specialization and diversification that help differentiating the partner´s offering in the market. This way, he can scale his business model and address the needs of his customers in a very flexible and customized way. We also have a very lucrative rebate program which rewards partners who achieve their goals with Veeam which are defined as revenue and pipeline generation targets. Last but not least, Veeam business has always been very profitable for partners as they directly manage and deliver all the customers’ services related requirements.

Do you see a greater focus on services in the channel now? Definitely. IT environments are getting more and more complex and IT leaders are facing multiple challenges. They are building and supporting increasingly complex hybrid environments. They are under so much pressure to integrate the latest market trends, and they are lacking the right talents from numbers as well as skills perspectives. Channel partners are very aware of this gap and therefore they are working closely with vendors, like Veeam, to be able to cater for this very high demand for consulting and implementation services.

In the current economic climate, enterprises have been looking to maximize the sustainability of their business by cutting operating costs. This has impacted IT spending too, as is evidenced by Gartner cutting its projections for worldwide IT spending growth this year from 5.1% to 2.4%. At the same time, enterprises are turning to IT to drive efficiencies and optimize their operations. Channel partners can transform these challenges into opportunity and thus increase their profitability in the many ways.

In their quest for optimisation, enterprise and mid-market customers are looking to utilise their current IT investments to their full potential. Channel organisations that can empower their customers to achieve this will find opportunity while also elevating themselves as trusted advisors. This will call for a deep understanding of the customer’s IT environment, business needs and organisational objectives.

While all vendors have partnership programs, not all of these are equal. Channel organisations must therefore align themselves with those vendors who focus on partner profitability with robust and transparent programs. Partners must also ensure they fully utilise the benefits they are entitled to such as marketing development funds, rebates, and sales promotions. The added benefit of this is that vendors prioritize engaging with partners who demonstrate their commitment through active involvement with such programs.

Instead of seeing cloud as a threat, partners should recognise the clear preference that customers have for these solutions. They can build their own service offerings on popular cloud marketplaces. The channel is also ideally positioned to combine cloud solutions from various vendors and wrap their value-add services around these to create comprehensive solutions that can be easily consumed by end customers.

While the margins on implementation services can be impressive, the effort and expertise required for complex deployments could mean that revenue doesn’t necessarily translate to profit. Partners should wisely create their product portfolios, with a focus on solutions that can be rapidly implemented with limited resources, while measurably driving business outcomes for customers.

How do you help your partners drive their profitability?

Kissflow has developed its platform and partnership programs with a focus on increasing profitability for partners. We have designed a rebate program that is one of the industry’s most profitable for channel organisations. Our partners can start making profits from the moment they sell their very first $1 worth of solutions to customers. The simplicity of our licensing model means that every partner is eligible for rebates not only in the first year of selling, but also on the recurring annual revenue. In addition, we have a transparent backend rebate for partners who want to strategically align with Kissflow for a long-lasting relationship.

Unlike with other vendors, channel partners do not have to incur any additional costs to certify their resources for Kissflow services. The implementation of our solutions can be done at a rapid pace and is not resource intensive. This enables partners to achieve project completion in a limited time and reassign their resources to other projects. Moreover, at Kissflow, we are always focused on partner enablement sessions to enhance skills in our channel. Our platform also offers the ability to ‘land and expand’. enterprises who have utilised our platform to automate a few processes are inevitably impressed and eager to build on their utilisation. This means that our partners have the ability to grow their business with existing customers, thus maximising the value of existing relationships rather than having to only focus on growing their business through acquiring new customers.

Currently, the biggest channel profitability and finance related challenge in the region relates to forex fluctuations in some countries. Because of dramatic swings, the committed prices in local currencies often significantly change their values against the US dollar. These fluctuations in countries like Turkey, Egypt, and Lebanon among others are causing partners to incur losses at the time of payments.

Another challenge is the delivery delays that result due to the extended time needed to clear the goods from shipping ports. These delays impact the ability of the partner to invoice the customer on time and hence, realise revenues.

Finally, another major last challenge is manpower related. Due to the growing IT skills gap, partners do not always have the resources they need to deliver professional services and carry out implementation on multiple projects simultaneously. This results in project delays which in turn delays the ability to invoice clients and impacts revenues and profitability.

Ghassan Abou Rjeily

Regional Channel Sales Manager – Emerging EMEA, Riverbed

What are some of the key steps for partners to improve profitability? Channel financing plays a significant role in partner profitability. It is what allows partners and distributors to bridge the gap in the payment terms between them and their customers. In the region, it is especially important for the large public sector opportunities which typically have longer payment processing cycles. Credit facilities also allow partners to compensate for shipment delays that may occur, which in turn delays their invoicing to the customers and potentially affects their cashflow.

The solution to the financial challenges that partners face could be achieved through a combination of one of these approaches. Sign contracts with remote affiliates of the resellers that are based in countries that have higher financial stability. Agree with customers on fixing the amount of the booked orders in US Dollars or their equivalent in the local currency at the time of payment. Establish an open Letter of Credit with a value in US Dollars to execute at the time of the agreed payment

How do you help your partners drive their profitability? Resellers should consider having branches in multiple countries to allow them to secure their cash and perform transactions freely by avoiding local currency fluctuation challenges. And resellers should work on their partnership levels with the vendors to secure higher discounts and increase their profit margins to compensate for delays and uncertainties.

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