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What to consider when creating VM strategies

Ideal partnerships are those that are profitable for both vendors and partners. Reseller ME examines the importance of implementing vendor management strategies and what resellers and solutions providers need to keep in mind when doing so.

Every business is about the people who drive it. Vendor relationship management, a well-known idea, is often ignored at the partner level. But channel players need to understand that it is just as important as managing customer relationships.

Albert Raj, Managing Director, Fujisoft, agrees that most organisations hesitate to invest in vendor management and it is an undervalued concept within the region.

“The biggest reason behind this,” he says, “is because there is no structured or disciplined approach to vendor management as most incorporate a complex multivendor model. This affects collaboration, innovation and vendor performance.”

However, some industry experts believe that even though the MENA region, when compared to firms in Europe and other parts of the world, is lesser into sound vendor management strategies, partners here are gradually realising the value a dedicated manager can bring to the relationship between vendors and partners.

“We are seeing a steady shift towards building strong relationships that go beyond just the monetary and revenue goals and aim towards collaborative working and people management,” says, Manisha G, MarComm Manager, Finesse.

“The relationship formed by systems integrators with customers yields revenue on which they make margins that turn into profit – those margins are determined by the relationship they have with vendors whether it’s in the form of discounts or additional resources, rewards, promotions or even training. All these elements are critical in the IT ecosystem, and are usually reflected in SLAs between the two parties,” says Sebastien Pavie, Director MEA Sales, Identity and Data Protection, Gemalto.

From identifying the relationships that are most profitable to being in sync with business objectives, a sound vendor management strategy brings in many advantages to a partner’s business.

Karim Refas, Regional Channel Manager, Eaton, says that although their title may not highlight this, the company’s reseller partners have a designated and dedicated key contact person that is handling their relationship

He says, “In most cases, it will be someone from the team wearing a ‘pre-sales hat’ and with a technical background. This is imperative for us to transfer knowledge and have technically-enabled resources available within our reseller partners.”

For Help AG, a regional systems integrator, having a vendor management strategy in place gave the company the right visibility and transparency to focus on the relevant business objectives with clearly defined timelines associated to it, according to its CEO, Stephan Berner.

He adds, “Especially with the rate at which technology is progressing, it is essential for us to know the product roadmap for our vendor partners. This allows us to better position these to our customers and enables us to incorporate them in our reference architectures.

“Vendor management has also helped up identify which relationships make the most sense for us to invest further into. As a reseller with 18 vendor partners, this is essential as we need to maximise our human and financial resources. It is precisely because of this exercise that today we have managed to achieve the highest degree of certification with many of our partners.”

A dedicated vendor management strategy has also enabled the SI to maintain a portfolio of solutions that is constantly evaluated to ensure that they are still best-in-class.

Berner adds, “In some cases, this exercise has resulted in us having to terminate our agreements with vendor partners.”

Nexthink’s Regional Director, Ghassan Al Kahlout, believes a vendor relationship manager should be trained by the vendor to understand compliance, processes, how to deliver the right message to the market, and to tailor the sales and marketing strategy for certain territories.

“This is important because the vendor relationship manager plays the role of an advocate of the vendor to the internal management of his or her company, and therefore, may adopt new strategies such as offerings for customers. A well-managed vendor relationship results in increased customer satisfaction, reduced costs, better quality, and better service from the vendor,” he adds.

How can partners go about devising a sturdy vendor management strategy?

Regional distributor, Spectrami’s Managing Director, Anand Choudha, says, every vendor’s technology is different and accordingly it’s positioning.

“Aspects such as type of customer focus, sales cycle and product positioning along with competition defines the vendor management strategy.”

“It is also critical to have an understanding of what both, the vendor and partner, want to achieve. This could be revenue expectations, new product sales, penetrations into new verticals or territories,” says Omar Akhtar, Regional Channel Manager, Middle East and SAARC, Veeam Software.

Partners need to begin the process by selecting the right vendors that are in line with their business goals. They need to do this based on various criteria, which will vary from business to business. They need to have a constant and clear communication with their point of contact from each vendor. It is also important to evaluate the progress and identify areas for improvement on a regular basis.

“Flexibility is another aspect that will bind the relationship. Being flexible will illustrate that you are willing to work together,” adds Raj from Fujisoft.

Partners should look at investing in dedicated vendor managers to grow the business to higher levels through collaboration.

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