Channel Management Strategy – HP Bets Their $39B Services Business

A couple of days ago, HP announced it would move its Technology Services business under its Enterprise Servers, Storage and Networking (ESSN) division.  The goal was to better align the TS business with the needs and intent of its partners.  The lesson here is that sometimes your own organization is the biggest obstacle to achieving greater results from the channel.

The issue had been that TS was focused on maintenance renewals and the channel was largely ignored when it brought any other scenario to the business unit.  This left the channel with a reduced set of options to present to the customer

It takes guts to make a decision that involves significant internal change with the sole purpose of getting out of the way of your partner’s efforts.  The bigger challenge still lies ahead.  The TS business is not going to change their behavior overnight and there are several unknowns to contend with including:

• Who makes decisions now?
• What are the new rules of the road?
• How do we engage with the partner community again?
• How do we make our number now?

This is the decisive moment for HP.  After the deck chairs have been rearranged, the real work begins.  Here is what we suggest to HP and any firm undertaking this type of change.

• Set up an integration team similar to those formed shortly after acquisitions
• Put in place an executive oversight committee including key partner executives
• Quickly capture all the concerns from the TS sales, operations and delivery teams
• Do the same with the channel partners so their voice is included
• Prepare a 90 day plan and share it with everyone
• Establish a communication plan to share early examples of success
• Develop new sales compensation models
• Push out new compensation plans within 30 days
• Set new accountabilities in the comp plans to drive specific activity and behavior
• Monitor and publish scorecards to create transparency

The services portion of HP’s business contributes $39 Billion per year.  This is a high stakes strategic shift that warrants the activities above.  If the channel management strategy pays off, it will more than pay for the additional resources and time invested.
Do you have any great sales strategy examples for us where bold change produced incredible results or disastrous outcomes?