How The Channel Can Still Go Global In Turbulent Times
By Thomas Jensen, Vice President and Head of Worldwide Channel Sales Strategy at HP
From intense policy and political debate in the U.S. to the effects of recent votes in Europe and rising debt levels in China, the path to going global for the channel has never seemed so lucrative. As someone with more than 15 years international experience, edgy resellers and IT service providers have been asking what one piece of advice I would offer to help in their global strategies. And, while this insight is focused on the IT channel, I believe these guidelines are applicable across multiple industries. So here it is: stay the course.
You have amazing opportunities in front of you. There is plenty of unchartered territory to explore and take advantage of. Turbulence is inevitable. Unforeseen political and economic challenges will always present roadblocks to global success. Don’t let it sidetrack you. Stay calm, adjust, spot, and select timely opportunities and pursue them with strategic and fundamentally sound enthusiasm. Remember, it is a lot easier to predict the future if you invent the future.
For the channel, doing that entails welcoming disruption, seizing the moment, and vowing to be at the forefront of change on a global level. Value added resellers (VARs), system integrators, and other partners can start down the path to doing this by following 4 Basic Principles of Going Global.
- Admit You’re Not Global — Yet
Most companies that think they’re global probably aren’t. In all likelihood, they have an international presence, but are not truly global players.
The distinction is international companies may have investments or representation in many countries across major regions, but no distinct strategy for dealing with customers across borders. They more often serve customers on a country-by-country basis. Sales reps are typically assigned to work in certain countries, and they are measured on performance within those boundaries.
Global companies, on the other hand, make foreign direct investments and serve customers based on their cultures, traditions, and legislation. Global companies help customers gain competitive advantages based on their unique business needs and offerings, always taking into account where they are based and what impact location may have. Moreover, they don’t measure success within country borders — hence avoiding challenges with revenue recognition, etc.
Channel partners should recognize there is an opportunity to address the aspirations of many IT companies that hope to go global (or more global). These organizations increasingly favor partners who can help eliminate obstacles to deliver product wherever and whenever they want.
- Live For Exporting
If your organization has tried its hand at helping customers with global needs, you’ve undoubtedly found exporting is tough. Duties, trade barriers, cultural sensitivities, and a whole host of other complexities come into play. There is a ton of heavy lifting, especially in countries with legislation limiting imports in favor of home-grown products.
Partners who do this successfully live for exporting. They are characterized by having anywhere from 20 to 40 percent of their workforces engaged in international trade. Some individuals specialize in compliance. Others focus on documentation. Some become experts on local business etiquette and cultural values. Another group might tackle local, regional or international trade law.
Going global through export means having a deep bench for understanding and navigating every possible aspect of international trade. Naturally, export is primarily possible for solutions that need limited feet on the ground for implementation, service, etc. That said, partners who are not strategically focused on living through export can still export opportunistically and choose to serve international customers well in select geographies. A partner might choose to forgo a global strategy and instead go above and beyond in a more defined way to avoid poor execution by trying to go export more broadly.
- Establish Your Own Global Partnerships
Not every channel partner has the resources to establish a footprint in multiple countries around the world and execute in a global way. But they can find their own partners to help them.
One way to do that is through vendors themselves. Some vendors actively broker relationships between partners across geographies in order to better facilitate product delivery. Through their worldwide channel organizations, they will work to identify partners of similar mind, structure, and profile, and then facilitate agreements between them. Sometimes those agreements are for single import/export deals. Other times, they are broader in scope.
Another way in which some partners are forging global relationships is through what I call a Star Alliance model. Similar to airline networks, dozens of channel partners might band together under this approach to serve customer needs, no matter where they are located. I know of one channel partner with an established network of 90 to 100 partners across roughly 140 countries around the globe. Another has fewer participants in the network, but they are larger players covering mature markets worldwide. This is a growing and important model that is worth channel partner consideration.
- Focus on Solutions
Many IT vendors and channel partners think in terms of moving products. But end customers are increasingly asking for solutions. That could mean Device-as-a-Service solutions, outsourcing solutions, systems integration solutions, vertical solutions or something else.
There is a great opportunity today to understand customer challenges and help IT teams provide business solutions. Indeed, this is where things are going. I’ve seen some statistics that suggest IT transactional business could decline by as much as 80 percent in the next five years.
Channel partners still committed to the old way of doing things will see their markets shrink over time. Conversely, those with a solutions-first approach stand a much better chance of establishing and maintaining a strong global presence.
As you consider your global strategy, it is critical to decide on the best path forward and then commit to these principles. While it is possible to be selective in your approach to these principles or prioritize some combination of these efforts, remember there will always be speed bumps, difficulties, and conflict. And that’s fine because a certain level of friction often motivates business and individuals to stretch for bigger goals such as establishing and operating as a global entity.
So take current political and economic turmoil in stride. Stay focused on fundamentals, and go global channel partner. On every given day, the opportunity to succeed has never been greater.
Thomas Jensen is Vice President and Head of Worldwide Channel Sales Strategy at HP. In that capacity, he defines strategy for HP’s $40 billion channel organization. He also oversees the HP Inc. Partner First program, introduced in October 2015, and holds responsibility for HP worldwide sales training.