Most technology CEOs dream about lowering their cost of sales through effective use of channels. For vendors selling enterprise software or outsourcing services, the ideal channel partners are large technology consultants such as IBM, Accenture, CSC, CGI, Perot Systems (Dell), SAIC, ACS (Xerox), Booz Allen Hamilton, Capgemini, Getronics, AtoS, Indra and Tieto. These consultants are frequently engaged by multinational clients to advise on technology strategy, which often includes vendor selection. In many cases the consultants are the authors of the Requests For Proposals (RFPs) distributed to vendors.
The thinking (of sales executives) is that if we can build relationships with the consultants writing the RFP then we will be brought into more deals. If we can influence the consultants then we may be able to influence the content of the RFPs as well. The theory sounds great. However, many technology firms struggle to build effective relationships with these highly influential organizations.
There are three challenges I have witnessed:
1) Success Metrics – Most companies make the mistake of assigning a quota-bearing sales representative to cover the systems integrators. However, sales reps are measured on short term sales objectives such as monthly or quarterly quotas. Sales reps obtain meetings with the consulting firms, but if there is not an immediate opportunity they move on. The measurement and compensation models for these types of channel reps does not allow for the type of long-term relationship building that is necessary for success.
2) Navigating the Organization – One channel sales executive I know describes these technology consulting firms as the “Land of a Thousand Princes.” There are hundreds, if not thousands, of different managing directors (or partners), each of which operates independently. Penetrating just one organization in just one industry sector therefore might require networking with 20 different MDs in over 10 different offices.
3) Messaging and Approach – Although the MDs at technology firms might be accountable for revenue, they did not grow up as traditional sales representatives. Often they worked their way up the organization as an accountant or consultant with mainline service responsibility. As a result, these individuals have little interest in swapping contacts and leads with vendor sales reps. They are more interested in having a meaningful dialogue about industry trends that could lead to a mutually beneficial opportunity.
In recent years there has been a trend towards a new approach. Firms in the investment banking, benefits providers and technology vendors are beginning to hire specialized “Consulting Relations” professionals. More thoughts in my next post.