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Reinventing channel programs for growth in a shifting technology market

Recent research shows revising channel strategies is one of the top initiatives among sales executives at technology companies.

Overview

Updating partner programs has become a major priority for technology executives. Recent research shows revising channel strategies is one of the top initiatives among sales executives at technology companies, while numerous organizations have recently announced major refreshes to their partner programs in response to changes in the converging technology market.

But today, simply updating or refreshing programs is fast becoming insufficient for technology companies looking for growth in a rapidly changing market marked by such trends as the shift to cloud computing and “anything as a service” (XaaS), the increasing involvement of business buyers in technology purchasing decisions, and the growing importance of the midmarket. Instead, companies need to enact a fundamental transformation of their partner programs to ensure they provide the right incentives and support to capitalize on new growth opportunities.

Background

Transformation of channel programs is a particularly urgent concern in light of an overall softening of the technology sector. International Data Corporation (IDC) recently revised its projection for growth in worldwide IT spending in 2013 downward—from 4.9 percent to 4.6 percent, which is already on top of a drop from 6 percent in 2012. Companies need to respond, and in a way that builds channel confidence that they (the technology companies) are looking out for profitability and growth for not just themselves, but also their partner community.

Analysis
Three trends are currently heightening the pressure to alter channel programs. First, new delivery methods, particularly cloud services, continue to shift the way companies consume hardware and software resources. Second, more IT purchasing is coming from Line-of-Business owners, which makes business relevance more important in buying decisions. Finally, midmarket companies, which traditionally have been underserved due to limited budgets, are quickly becoming an important growth market for technology products and services.

Recommendations

Based on our work on channel strategies and programs with leading organizations, Accenture has identified five key principles that can help guide technology companies in their efforts to create partner programs that can more effectively address the needs of their businesses in today’s rapidly changing technology industry:

  1. Create new incentives to encourage the pursuit of new market opportunities.

  2. Ensure the partner mix has the right skills and competencies to pursue new market opportunities.

  3. Refine the partner program brand and segmentation to span multiple offers.

  4. Simplify the program portfolio to improve the partner experience.

  5. Lead partners along the program evolution journey, helping them transform their businesses.

Technology companies that are able to restructure their partner programs in these shifting times will be best positioned to capitalize on the growth opportunities afforded to them by an industry in transition. In our experience, companies that get this right can boost their return on channel program spend by generating top-line improvements of as much as 2 percent to 3 percent.