Cisco: PRM System, New Incentives On Tap With Partner-Led Strategy

Cisco will put a number of new resources behind its new "partner-led" strategy, including a partner relationship management (PRM) system and new incentives designed to help partners be more efficiently organized and better compensated for Cisco deals.

"We're reorganizing in a way that positions us for being simpler, being faster and being more streamlined in the way in which we go to market," said Edison Peres, Cisco's senior vice president, worldwide channels, in an interview with CRN. "It's all about building an organizational model that takes away inefficiencies and improves accountability in the decision making that we do."

Cisco earlier this summer began tweaking its Worldwide Partner Organization (WWPO) in line with the company's broader corporate restructuring.

Going forward, Cisco has been telling partners, it will have two "selling motions." One, "customer-led" will be reserved for Cisco's larger and more strategic accounts, where Cisco will take the lead on engaging with partners to sell to those accounts. The other "partner-led," will find Cisco driving more business opportunity through channel partners by letting them take the lead with customers.

"It means that we are not going to have dedicated sales people that call on dedicated customers, or territory sales managers that have either named accounts in [their] territory or have an open territory," Peres said. "Those sales people are going to be working with specific partners and their sales people, aligned around specific opportunities. Rather than be proactive, we're going to have a territory sales manager be more reactive in supporting the partner that takes the lead with these customers."

Cisco's sales teams will be reactive to partners' leads, said Peres, but CIsco will also be adding marketing resources and helping to create demand with a solution provider's sales and marketing teams, too.

Heading up the partner-led initiative is Andrew Sage, who was named vice president, worldwide partner-led in July and now reports to Keith Goodwin, senior vice president of Cisco's WWPO. Sage and his team, which now includes former Cisco Canada channel chief Donna Wittmann, are expected to unveil new partner resources -- including the PRM system and potential new value incentive programs for Cisco partners -- in the coming weeks, according to Cisco partners.

Peres confirmed to CRN that is indeed the case.

The PRM system will make how Cisco communicates with partners a lot more efficient, Peres said. Cisco can send targeted marketing messages, for example, to not only the right partner companies but the right partner executives that need to see those messages, as well as more effectively share data on deals in approval stages and compensation rewards from Cisco.

According to Peres, Cisco has also consolidated many of its operations teams under one executive, Cisco Executive Vice President Randy Pond, who is charged with making Cisco's various tools and systems more efficient. The PRM system and others like it will be handled as a partnership between Cisco's operations teams and the WWPO. Peres declined to say how much Cisco is investing in the PRM system and other partner-led incentives, but said making that investment is a must for Cisco.

"One of the things to make partner-led work is that you need this kind of tool," he said. "One of the premises of partner-led is that we're working specifically with account managers of our partners on specific accounts and/or deals. This is a very important part of the relationship with our account managers."

Partner-led, Peres explained, is not intended only for "commercial" accounts, or the term Cisco uses for SMB and midmarket engagements. It's a selling model that might be used more broadly in many cases.

"The preponderance would be [SMB and midmarket-size deals]," he said. "But there could be a country or territory where 100 percent of the business is partner-led."

Next: Partner Takes On Cisco Incentive Programs

Solution providers interviewed by CRN have been encouraged by Cisco's partner-led strategy, though they cautioned many of the details haven't been finalized.

But if it really does shift more emphasis to partners, they said, it could win favor from a lot of those partners taking Cisco to market.

"This is a leadership opportunity for Cisco to demonstrate confidence in the channel to lead sales activity with a key vendor," said Harry Zarek, president and CEO of Compugen, a Richmond Hill, Ontario-based solution provider. "We've often talked about it, and I think this is a firm stake in the ground in an important segment of the marketplace that we absolute play in. They're willing to entrust us with promoting the brand and the solution, with our services capability."

Based on his conversations with Cisco, Zarek said, he understands the partner-led tools to more clearly define in the field where solution providers lead on bringing an opportunity to Cisco versus where Cisco sales managers drive the opportunity.

"It's always been a little bit of an issue -- a little vague," he said. "This is hopefully the first step in allowing us to build a very scaleable sales opportunity generation and sales management system. If so that's very different than the way we've all been operating. The idea is, in my view, about no longer having to argue or determine who does what in progressing new customer opportunities."

Zarek said he's hoping for more details from Cisco on how it will sort out territories under partner-led, and what it will do if, say, multiple partners in a territory are going after the same prospect lists. If Cisco can effectively do that, Zarek said, it'll enable Cisco and partners to communicate more effectively and let partners place more of their time and investment on the right customers.

"That's really critical," he said. "It would not be unusual for us, with 70 to 80 sales reps, to have a couple 1,000 opportunities and have to record that in our CRM and report back on that, through systems on an exception basis."

Robert Betzel, president of Infinity Network Solutions, Macon, Ga.-based solution provider, said the changes Cisco made to its incentive programs will help his SMB Cisco sales immensely.

Cisco, for example, recently rebranded its partner development funds (PDF) program -- which offers incentive payments to VARs on certain types of deals to SMB customers -- as VIP Express, and streamlined the process for participating so that more Cisco products could qualify for incentives.

"Before, we had to try and figure out what product set we were going to sell more of and sign up for the right rebate program," Betzel said. "Now it appears we will be able to take advantage of all of our solution sales."

The partner-led motion will be more familiar to partners that sell Cisco into SMB accounts, Betzel said, because Cisco has been letting a lot of its partners take the lead with those accounts for years.

"I think any program where Cisco provides more incentives for us to sell and support their solutions is great," he said. "I hope they don't lose their focus on the SMB market as these changes occur."

Next: More To Come From Cisco

Cisco's Peres also provided additional details on the changes to some of Cisco's incentive programs that Cisco confirmed in mid-August. The Opportunity Incentive Program (OIP) -- which covers deals in which partners secure new business opportunities and bring them to Cisco's attention -- now has a component called OIP Express, in which the time it takes for Cisco account managers to approve OIP deals has sped up considerably.

According to Peres, under OIP Express, an operations team is in place to approve smaller, more transactional deals in OIP in a matter of hours, not days. Whereas most deals took as long as three days to see approval from Cisco, that pre-determined operations team -- not the individual sales person in the territory -- will bless OIP deals of a certain size.

The deal threshold will be different depending on territory, Peres said, but deals under $100,000 are the basis for OIP Express in the U.S.

"Large OIPs will still go through the process we have today," Peres said. "But in Express, rather than have an individual sales person in the territory approve, we've centralized the approval process with a handful of operations people available to approve those things effectively."

Despite the changes transforming Cisco's WWPO, Peres' role, he said, hasn't changed.

"I'm still the worldwide channel chief," he said, "responsible for all the partners that resell anything from Cisco."

Another thing soon to come from the WWPO will be more details on Cisco's partner marketing organization, Peres said. Partner marketing is now headed up by Amanda Jobbins, who was named vice president, worldwide partner marketing in July.

Jobbins, who relocated from London to San Jose, Calif. and was most recently vice president of European marketing for Cisco, is currently forming her marketing team, Peres said. Cisco, he added, is also still committed to Cisco Partner Velocity, the marketing-centric partner conference launched under Jobbins' predecessor, Luanne Tierney, although Cisco has yet to confirm whether (and where) the next Partner Velocity will take place in 2011.

Cisco, overall, will be taking a phased approach to its changes, Peres said, and the fundamentals of Cisco's WWPO and partnering strategy remain the same.

"There is nothing more frustrating to a solution provider than constant change, and for that change to happen abruptly," Peres said. "The way in which we work will continue as it has in the past, it's just goosed-up with this additional energy in working with our partners. Partners should not worry. If anything, the changes should be an upside."