Broad-based channel vendor HP is introducing a standard channel engagement model to ensure profitability and enable continued competition with direct vendors, and is also strengthening its small and medium enterprise (SME) focus with new plans for Europe, the Middle East and Africa.
"The channel model today isn`t economically viable," says Jos Brenkel, HP`s VP for channel and SMEs. "All partners, whether they be in logistics service partnerships (LSPs or distribution), channel development partnerships (CDPs), or in service and sales partnerships (SSPs) must deliver greater value." For LSPs, for instance, this means improved inventory turn, fewer, more valuable partners and virtual inventories, to improve stock issues.
HP also wants more "channel breadth", which means more SSPs, which represent the final, customer-facing link in the value chain. These partners, says Brenkel, must integrate closely into LSPs and into HP itself, to ensure a consistent customer experience of value.
Additionally, SSPs must manage customers better through, for example, customer relationship management tools that measure and point to greater profitability of customers, lower sales costs and generally improve efficiencies. Brenkel adds that within the SSP category, HP`s "premier, select and business" channel partners will all be "integrated into the demand engine".
Second focus
Using its worldwide consulting partner, Accenture, HP will analyse the cost structures of partners and determine the "best-in-class" cost-to-sales ratios. "The thing is not to be more expensive than the direct model," he says. Thus establishing a cost base, HP will require other partners to match these standards, for instance cutting costs by focusing on core business, which for an SSP means the "right mix between feet on the street and bums on seats".
HP`s increased SME focus centres on its Vendor Forum, which espouses industry standards for interacting with a chosen group of vendors (HP, Microsoft, Symantec, Cisco, American Express and Vodafone).
HP wants with this forum to create an "Amadeus-like way for the channel to interact with vendors, as is the case in the airline industry. We create falsely-high cost structures with fragmented channel approaches," he says. "With standard price- and availability-checking, using one tool and a set of vendors, the whole approach is standardised."
Product areas in HP`s SME focus will include mobility, on-demand computing (Adaptive Enterprise programme) and printing services.
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