Is Global Good?
There is a stampede to flatten the world and engage partners on a global level. But, is that a good thing for the partners, your market penetration or efficiency? Globalization is a topic we’ve seen our clients struggle with increasingly over the years as they attempt to align the strategies, processes and systems around their partner programs across multiple geographies. We were not surprised when about half (49%) of the respondents in our 2007 Partner Programs Survey reported the intention to globalize their partner program operations in the next 12 months. But what exactly does this mean and is globalization a good strategy for all companies?
Several companies, such as Network Appliance, VMware and BEA have partner programs that are unique for each distinct sales and operating region – namely North America, EMEA, Asia Pacific and Latin America. These organizations tend to have a strong regional structure – i.e., a president or general manager that is responsible for the entire P&L of the region. Other, larger companies such as AMD, Oracle, Cisco, and Symantec, have “globalized” partner programs, providing essentially the same program structure across all operational regions. Which is better? That depends on several decision elements, including the strength of the global brand, the product and channel maturity, and the resources available both at the global headquarters and in the regions.
Gary Bixler has worked in both worldwide and domestic channel marketing roles for microprocessor manufacturer AMD and understands the benefits and challenges of standardizing globally. AMD engages with a total partner base of 7,000, with 3,800 located in global markets.
“Companies benefit from better sharing of best practices among regions, better and more efficient leverage of common program elements, and unified measurement and analysis,” says Bixler.
After working with several clients to unify and standardize their partner program across multiple regions, we see three primary benefits to aligning program features and requirements globally:
1. Pursuing economies of scale through driving efficiencies in processes, infrastructure and measurement – Vendors can increase profitability through realizing economies of scale from standardized processes and the common infrastructure of a globalized partner program. For example, since program elements are standard around the world, instead of employing multiple teams worldwide to administer program elements, vendors can staff a single global person or team to manage operations. Program managers will need to make allowances for regional variances, but overall, it helps maintain a level of uniformity.
2. Being easier to do business with because the program is a known entity for larger multi-national solution providers - With a vendor’s globalized program, partners experience similar processes, rules of engagement, and measurements in every region. For example, multi-national solution providers that are Cisco “Gold” on a worldwide basis don’t have to worry about program levels being different—or having different requirements—in different regions. Vendors like Cisco are easier to do business with because the solution provider only needs to understand one program structure around the world (versus three or four – one for each region or even country).
3. Making it easier for partners to collaborate with each other across borders - Partners understand each others’ commitments and capabilities when they are aligned across regions. For example, a partner in the US at a gold level, can identify a partner in Germany who is also a gold level (in a global program) and understand qualifications of that partner. Versus, for example, one region having gold as the entry level (gold, platinum, titanium) and another region of the same vendor have gold as the highest level in the program (bronze, silver, gold). In a globalized program, the levels align.
However, while there are economies of scale benefits to globalizing your program, there are some caveats to bear in mind. Steven Houck, who also has worked in worldwide and domestic channel sales and marketing roles at VMware and parent EMC, notes a primary factor when building and managing a global partner community, is that you don't build a one-size-fits-all global partner program.
“Ensure that when you define goals, metrics, rewards, and support that they are designed with the local market requirements in mind,” he notes. “Take into account local economic conditions as well as cultural issues that may impact the way rewards and resources are perceived and valued.”
It’s a delicate balancing act, but here are three things to consider whether you choose a global program strategy or one that is specialized to each region:
AMD’s Bixler says when managing a global partner community it’s important to determine “what programs and deliverables do you fully centralize and implement globally. More specifically, what do you provide templates or frameworks for, and what do you leave fully up to regional implementations?” Also consider what systems are needed to manage a global program and how to incorporate regional differences in process, language, currency, prices, etc., into those systems.
Bixler adds another decision for global implementation is the amount and location of staff and resources: are they centralized, in-region or in-country, or both, and if both, what is the mix? We recommend that companies establish a global channel chief to unify the strategy from a management perspective.
These decisions illustrate some of the challenges in expanding to a global strategy. Bixler notes that the goal for a vendor is “accounting for the vast differences in regional business practices while maintaining some consistency and efficiency in program implementations.”
So, when do you standardize your partner programs across regions and when do you provide for regional and cultural considerations? We think it makes sense to standardize the partnering structure across the globe, leaving the specific values and monetary expectations and rewards flexible to the regional demands. Leverage as much as you can across the regions – providing scalability and efficiency – without limiting the specific value-add of the regionally specialized partners. You may not flatten the globe, but you will be better equipped to engage partners worldwide.