In this final installment of our ongoing report on the channel’s movement away from transactional models, we will take a look at the characteristics of successful channel partners of the future.
There is not one profile that will accurately describe the channel partner of the future; without differentiation, it is difficult to be competitive after all. However, that does not mean that there will not be some basic qualities that will be common to the most successful.
The analysts, experts, suppliers and partners that Channel Partners consulted for this series suggested partners strive to develop the following traits:
1. Business Acumen — It will not be enough to understand technology you are selling. You must have a good understanding of business operations and finances in general and that of your customer in specific. This provides you with a holistic view of the business objectives and where you can assist. "Think outside of pipes and costs and think about increased profits, productivity and reduced risk," said Ken Bisnoff, senior vice president of strategic opportunities for TelePacific Communications Inc. "Help your customers leverage the insights to engage you in the problems they are trying to solve. Discover the business and operational problems before discussing solutions."
2. Complete Solution — Once you begin to look at your customer's business holistically, it only makes sense that your offer should become more comprehensive, touching more strategic requirements for the customer. For IT VARs that may mean moving up the IT value stack from just the hardware to the applications. For the telecom agent, that means moving past the carrier demarc and going all the way to the desktop.
3. Partnership-Orientation — Our panel did not argue that the partner of the future would provide a breadth of services on its own; partnerships and outsourcing are likely and legitimate means to achieve an end-to-end offer.
4. Specialization — While a seeming contradiction to providing a complete solution, specialization refers to domain expertise. An obvious example would be vertical focus. Certainly, it's not hard to imagine providing a comprehensive solution into the health care market, as one example. Darren Bibby, program vice president — software channels and alliance research, for IDC suggests this is so important that channel partners will begin to recruit staff that are domain experts first and technologists second to shore up these specializations.
5. Service-Focused — Similarly, the channel partner of the future will need to focus on services — consulting, integration, managed services, etc. Bibby said the best will create their own intellectual property to package and resell. This will enable them to build out their own brand and value proposition for the customer. Tiffani Bova, vice president of research for Gartner Inc., added, "You have to find ways to provide value that customers can't get anyplace else."
6. Brand Investment — Indeed, one of the characteristics lacking in transactional partners is investment in their brand, value proposition and product packaging. "If a partner invests in its future success, it will create the capabilities and capacities for generating new revenue, which leads to profitability, which leads to reinvestment," said Lawrence M. Walsh, president and CEO of The 2112 Group. "That is the hallmark of a future successful channel partner."
Over the last five months, Channel Partners – with the help of experts, including analysts, suppliers and partners – has explored some of the important questions about how partners can transition their businesses away from transactional models, including possible new models and how to get there. We conclude the series this month by reacquainting you with five partners introduced in August that have made changes successfully as they share the next steps in their evolution. You can read their stories in the Transformation Blog or in the new report, "A New Partner Model for New Times: A Special Report on Channel Transformation."
Additional reporting by Kelly Teal.