Pls. elaborate on the initiative on making investor ready organizations.
The investor ready organization means we are preparing the partner organizations to be ready and compliant enabling them to attract investment to grow to the next level. We take care of putting in place all right kinds of things of the partner organization including EBITA, payment histories, banking records, etc. so when an invest comes, it makes easy for him pick and choose. We hired E&Y and invested in a few of the organizations to make these organizations investor ready. In follow up to that, we are creating this as a yearly exercise. We started this concept in our partner conference in Prague last year. This time we had taken 100 partners to Malta for a similar conference and brought in investors too, who were keen in investing in infra space. So if the partners are ready and they want to dilute or raise funds, they are ready to do so. Similarly, we will be taking another set of organization next year to enable them to cross the threshold. So in next 2-3 years, we will be creating such 50-60 organizations. The objective is to create the foundation better.
“Dell partners are going to be the new power house. Here is an organization which is thinking about the partner organization more than the partner himself.”
Director & General Manager
Channels Dell India
The partner community today needs a lot of disciple – disciple of finance, disciple of the way they transact, etc. Because these organizations are not street run organization, they need to bring some stature to their entity. And our exercise with these organizations helps in bringing a lot of discipline to these organizations.
So, while you do something like this to the pool of organizations, you are doing something great to the industry. It comes back in some form to you. If the mindset of these organization will change it will make all profitable.
What we are doing is not done by nobody else in the competition. It is a cost to the company. We are not going to see a direct return on this but this is an investment sincerely for the channel community to grow big.
How do you select the partners while offering credit limit?
We do it on the basis of their market credibility… look at their P&L and give them the limit, which of course can change – increased or decreased – after two quarters. There are people who are doing great business but their P&L does not support us to give them credit.
There is always an argument between direct and indirect mode of operation by the vendors. Dell becoming indirect means what? Does the company really mean indirect when it comes to supporting the partners at the time of really need?
Two years back when we added our indirect RTM, we openly said that these are the number of accounts that we would work as direct. It means we would manage the relationship directly. We did not say that you cannot work on those accounts. Partner can operate in all the three RTMs. We have some 2000 accounts that we do directly and incase the partners want to work on those, they are most welcome. Our account manager would work with them and create a DR and they can start working with those companies. Last year only, around 25% of our business had happened through the partners in the direct space.
How partner-led and distribution-led RTM are different from each other?
Under the distribution-led, we have five distributors, including Ingram Micro, Redington, HCL DDMS, Iris and Supertron, who are responsible for stock and sell. And many partners are aligned with these distributions as these distributors can offer credit limit to the partners.
In the partner-led RTM, partners are aligned with us directly who get credit limit from us. But that does not restrict these partners to get credit limit from under the distribution- led or buy from the distributors. We have the most flexible channel programme for our partners. For example, Hitachi Micro Clinic has a limit with us and they do have a limit with the distributor as well. It depends upon the intake capacity of the partners.
What is your message to the aspiring Dell partners?
Dell partners are going to be the new power house. Here is an organization which is thinking about the partner organization more than the partner himself. I am more passionate about the strategy of making the partners future ready and investor ready. It is actually done for the development of channel fraternity and I am a complete advocate of that. It takes a lot of time and effort to make it happen.
We will continue to expand our market coverage and ensure that our partners be engaged and profitable. Percentages can keep varying but we will stay consistent in our policy and strategy to make partners organizations profitable in a long term. Our plan is to reenergize the center and bottom of the pyramid.