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Tue 17 Mar 2009 04:00 AM

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All in a day’s work

Channel Middle East looks at what it takes to be an effective channel chief in the Middle East and asks resellers what they really want from their local go-to guys

Multiple countries to cover, partner conflicts to resolve and internal sales quotas to reach. The life of a channel manager can be a hectic and complicated affair. Channel Middle East looks at what it takes to be an effective channel chief in the Middle East and asks resellers what they really want from their local go-to guys.

There used to be a time when the channel manager’s job amounted to little more than convincing partners to increase orders and meet those all-important quarterly target thresholds.

While customary sales principles still underpin much of what the modern-day channel manager does, resellers in the Middle East have grown to anticipate a whole lot more from their local partner representative. The message from dealers is that managing a channel is no longer about giving a quotation and signing off orders, but hands-on business development.

“I genuinely believe a channel manager has to be about more than just the sales numbers,” said TN Rajan, division manager for enterprise computing systems at UAE-based systems integrator Alpha Data. “He has to look after channel conflicts, the partner’s engagement with the vendor and its participation in each channel programme that it operates.”

Rajan expects a channel manager to act as a ‘single face’ for the vendor so that the partner has one point of contact for all its queries. “The channel manager should be interacting with each business unit in the organisation — including services — to make sure that the channel is compliant and its problems are addressed,” he commented.

Anil Gupta, managing director at security and storage reseller StoreTech, believes man-management is a vital component of the role. He says an accomplished channel manager is able to distinguish between ordinary partners and those that really influence its business.

“If 80% of the business comes from 20% of companies, it is important that the channel manager targets the main accounts and focuses on serving them well,” explained Gupta.

Although the channel management function is often an after-thought for vendors — particularly when resources are limited and sales and support staff become first priority — there is a growing consensus that, to be effective, the role must occupy a high degree of visibility in an organisation.

Given that is true of established names such as Sun, Oracle and Cisco, it is not unreasonable to foresee other vendors looking upon the channel organisation as a strategic element of their business as they expand their indirect presence in the region.

One aspect that all vendors will need to give careful consideration to is their commission structures. Resellers argue that the policy of paying channel managers based on partner-revenue is not conducive to a trusting relationship.

“The problem you’ve got is that if a guy is getting to the end of his quarter and is going to miss his bonus cheque or get fired his first priority is to screw his customers by stuffing the channel,” warned one source.

Rajan at Alpha Data admits it is an issue that needs addressing. He says there is no incentive for a channel manager to sort out channel problems or put a partner’s interests first if key performance indicators (KPIs) are exclusively sales-driven.

“I am recommending to HP and other vendors that only 50% should be measured on numbers and the other 50% on channel engagement or satisfaction,” he said. “There is no reason why you can’t have multiple guidelines on channel satisfaction, it doesn’t have to be ambiguous.”

HP claims it has already acted in lieu of such criticism by revising its payment formula. “We have been totally revenue-driven, but we have also received this feedback and changed things for the coming period in the sense that we now have two quality aspects to measure our channel managers besides revenue,” explained Bernhard Isemann, solutions partner organisation manager at HP Middle East.

According to Isemann, the vendor’s 41 channel managers in the Middle East are now judged on the outcome of regular partner satisfaction surveys and their ability to facilitate end-user ‘verifications’, which encourages them to assist resellers and ensure that processes for customer auditing are correctly followed.

Other vendors are also waking up to the fact that a revenue-based commission model drives certain detrimental behaviour, reworking their payment schemes so that a percentage of the bonus is linked to factors such as partner certifications, sales training and workshop delivery.

While resellers and VARs welcome these developments, it would be unwise to expect radical reform as many vendors in the region simply lack the spare capacity to measure a channel manager’s performance on anything more than partner revenue. So what does it take to be a channel manager in the Middle East?

Exceptional communication skills are absolutely vital as the channel chief is central to articulating the vendor’s strategy and ensuring partners remain informed. The ability to cultivate alliances with resellers and VARs — critical to vendors as they expand geographically and introduce new product families — also stands out as a key feature of the job in the Middle East.

Beyond that, the channel manager is required to understand how a business operates and the impact that certain decisions will have on growth and profitability.

“When I consider the channel manager’s main objective, it is to understand the partner’s business in the sense of its financial, operational and strategic aspects,” remarked Isemann at HP. “A channel manager needs to be aware of a partner’s daily issues and what selling HP products is going to do to his company. A very important part of this is a financial understanding of the company’s P&L, cashflow and credit lines — the things that you would usually find in the role of a general manager or financial officer.”

As well as being competent at business planning, an in-depth knowledge of market and end-user trends is also a mandatory aspect of the role for channel managers wishing to add value to partners in terms of consulting.

Philip Hughes, CEO at the Channel Development Company, says one of the difficulties for Middle East channel bosses at multinational companies is that they are often forced to work with established policies based on Western market experience.

“You need a very good manager to take a European or American programme and tweak it to a model that works here,” said Hughes. “It becomes a case of ‘don’t do what your American marketing boss orders you to do, do what your customers need you to do’ — and that is very difficult because of corporate politics.”

A channel manager that earns respect from their partners is likely to be capable of managing the different levels within a reseller or integrator too, including pre-sales staff responsible for recommending products in a solution.

By acting in a transparent way that places the partner’s requirements first, channel managers stand more chance of gaining a sales persons’ trust and loyalty. In contrast, if a vendor is difficult to do business with, the sales person will be more inclined to simply sell what comes easiest to them.

While a strong degree of diligence lies at the heart of the role, channel managers should always remember that they are essentially channel ambassadors — reinforcing the value of business partners to both internal departments and end-customers.

Taj El-Khayat, head of the enterprise channel group at Juniper Middle East, admits that one of the toughest tasks a channel boss faces is ensuring internal sales personnel follow the go-to-market strategy that directs business to partners.

“The channel manager’s biggest challenge is internal, rather than external, because although he gets paid by the vendor he is basically on the partner side,” said El-Khayat. “He is the advocate of the partner within that vendor, which makes him the co-ordinator, mediator and negotiator on behalf of the partner.”

Samir Achour, channel manager for the Middle East and North West Africa at storage vendor EMC, agrees. He suggests a channel manager’s ability to administer and resolve certain situations determines success with partners.

Conflict management is one topic that can make or break a partner chief. “Conflicts could be between two partners that you have to manage or your internal sales team and one of your partners,” commented Achour. “Either way, the challenge is to make sure that it does not affect the business or the partner’s loyalty, motivation and commitment.”

Achour also argues that while the fundamental competencies of channel management are the same in every market, local idiosyncrasies have to be taken into account.

“You need additional knowledge about local cultural aspects and the way that people deal with people. Some partners consider that a verbal agreement has enough weight to be respected as a written agreement,” he said.

The way that partners conduct business will vary from country to country, meaning that a channel manager in Egypt might interact with a reseller differently to his counterpart in Kuwait. In Saudi, for instance, some vendors advise channel managers to acknowledge that the power of financial negotiation is much stronger than elsewhere, while in the UAE, resellers and VARs tend to demand more face time with partner bosses than you would typically expect to see in other parts of the region.

Perhaps of most curiosity to resellers in this region is how serious vendors are about appointing channel managers on a country basis, rather than giving one individual responsibility for multiple markets.

“I have a good channel manager, but he is hardly available to us because he is too busy covering 14 countries,” complained the boss of one large hardware reseller in the UAE. “This is the problem — overloading and a lack of clarity over the channel manager’s mission.”

Isam Mansoor, managing partner at Oman-based Advanced Business Solutions (ABS), which specialises in CA, Cisco and EMC solutions, says most of the channel managers he deals with are based in Dubai: “We communicate over the phone and by e-mail most of the time, and they’ll perhaps visit every month. But their business would be much more effective if they were on the ground.”

For ABS, it is important that a channel manager is available to meet with end-customers directly because it gives the client confidence in its investment. However, he admits this is not always easy.

“It is a bit difficult to get the channel manager’s time. They’ll probably have a pre-planned schedule covering three or four countries and cannot attend on the date you ask. That disappoints the clients because they expect an immediate response from the vendor,” he said.

Distributors and resellers also claim that they do not see enough stability in the channel role. Occupants are inclined to use it as a platform for an attractive move elsewhere or a stopgap on their ascent towards a more senior post if they work for a larger organisation.

This is an issue that vendors must endeavour to address, because if there is one thing that frustrates a reseller trying to execute a business plan it is the disruption caused by persistent change.

A reseller partner of one software vendor in the region said three different managers had looked after its business during the past nine months. “By the time we actually get accustomed to working with them they have moved on and somebody else has come in,” said the source.

If this scenario sounds familiar to other vendors, they would do well to heed Hughes’ advice. “This is a relationship business so just remember that there are lots of channel sales people out there. You have to be different to them and give your customer something more than the competition offers,” he said. “And in reality what you can give them is your time, understanding, education and help.”

Hughes continued: “A lot of people in the more established reseller and distribution business have been there for some time. If a channel manager comes along and builds a relationship to help them grow through training, education and general business coaching they will become far more loyal to that channel person than they would do to the person who is just pushing the big boxes.”

As vendors increasingly emphasise the significance of value add, it is inevitable that the expectations of a channel chief will rise. Isemann says the channel management position at HP has already evolved from being the back-end interface between manufacturer and reseller to a role combining sales and account management that helps the partner drive front-end customer activity.

“This is a change that I see happening more as the region develops quite strongly in the SMB and midmarket areas,” admitted Isemann. “Partners there will require the kind of support from us that they would need in a top account.”

A day in the life of a channel chief

Taj El-Khayat, Juniper Networks

09:00The first thing I do when I walk into the office is look at my to-do list because being a channel manager you are constantly busy. I’ll look at what I have planned for the day ahead and then spend 45 minutes to an hour on e-mail to ensure I have nothing pending from the day before. Usually there will be e-mails from partners, clients and colleagues to respond to.

11:00I always plan partner meetings during this period, either in my office or in their office. Most of the time I’ll try to plan the meeting at the partner’s premises so that I can see the finance manager or other people within their organisation while I am there.

15:00In the afternoon I’ll return to the office, which is when I usually get to talk to members of my team, such as the distribution manager, and get updated on any challenges or issues that need my attention. If there are any internal meetings then I tend to schedule them for the afternoon as I always like to dedicate a good portion of the day for partner meetings.

18:00The office day finishes at 6pm, but of course I’ll go back to e-mail during the evening! Every couple of weeks I also tend to do a country tour and then my day-to-day routine changes dramatically. From the day I land until the day I leave I spend all my time with partners and going out in the field. During that time I am completely off e-mail so I switch on my out-of-office reply asking people to SMS me if it is urgent. My trips normally take place between Monday and Wednesday because Sunday is when we hold all our conference calls and Thursday is when I plan for the following week.

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