VAR veteran Terry Petrzelka, now a valued advisor and consultant to vendors and resellers discusses the top concerns for accounting technology consultants in this monthly Q&A series.
This month he takes a look at partnerships, taking on new products, and the cloud in particular.
AT: So you are thinking of signing on as a cloud vendor partner. What do you need to know/do going in?
Petrzelka: If the partner is a horizontal partner, before the partner makes a move to add a new platform to their business the partner needs to analyze its installed customer base to find where they have a concentration of clients in a specific industry.
The partner needs to make sure they fully understand their strengths in order to differentiate themselves in an industry niche if they add a new cloud platform. Once this is completed, the partner should start their research for cloud solution providers.
Part of the publisher research should be to find out where the publisher has strengths and weaknesses that match their business & their client demographics. If there are gaps [which there will be], the partner must decide if they can fill the gaps with ISV Industry Solutions or their own IP? Bottom line -- if the partner is horizontal today, the above steps must be taken.
If a partner is vertically focused today, then that partner needs to analyze the strength of the cloud offering and see where the gaps lay and how they can be filled – either by an ISV Solution or their own existing IP. It is a fact that cloud ERP Publishers are eager for partners who have industry expertise or want to focus on industry niches to become one of their channel partners for their cloud platform.
When the partner picks a cloud offering[a publisher’s solution], the next key step is to put in place a plan an aggressive plan to get themselves found… they need to start to generate leads and become known. This is a must today, and has to be a top priority. Getting known and found today is much, much different than anything they did in the past. So, make sure this is in place. The partner may need some help from the outside to make this a success, sometimes the publisher can help here.
Without a plan, the partner’s journey will FAIL and a lot of energy, time and money will be wasted. The partner needs to have the right people I place, figure out what the key motivator is in choosing a new publisher r solution, and what resources a publisher has in place to provide business assistance in making the cloud practice a success.
This is not a part-time job. You need to pick a team, empower them with the vision, the business requirements that has been laid out, and let the team drive the selection. Finally, keep emotion out of the decision process.
AT: What are some common traps/pitfalls you are seeing firms get into when taking on new product lines as they have been lately?
Petrzelka: It is that the partner has no plan, and/or it’s not a major business decision for them. They are playing the field, most partners feel they need a quick fix offering or a solution to appease the market, they go through training but then it dies because they are not truly committed. The days of this approach are over.
The starting of a new practice has to have a purpose, a plan, milestones, measures, investments, and decision points to either stop or continue. One cannot just dabble, you have to be committed. Publishers are looking for committed partners, not opportunistic partners. Partners need to sit down with their publishers and get them to sign up to their business plan. There needs to be follow-up with the publisher to demonstrate progress. The more you partner with the publisher the easier the start-up will be for most will help you get started if they see you are committed.
AT: How do I select the right firm to partner with for added services/revenue or even approach as a potential buyer?
Petrzelka: Firms can get all enthralled with the newest thing like business intelligence, cloud offerings, big data, etc. However, their existing client base is their biggest asset and their best indicator of what service is needed the most. Instead of surveying their customer base first partners generally just go off and chase the newest or hottest most fashionable technology. What really should be the best step is surveying their client base. Once completed, then the partner needs to assess out whether they can stand it up themselves or look to a local or regional partner to partner with who can deliver the service today.
The importance here is responding to the partner’s client need. If not, the partner may begin to lose their client base. Partnering discussions need to focus on finding out if partnering [a common vision] can be established based on a co-operative, non-competitive relationship. If so, work out a business plan, and see how it might be structured. Actively discuss if there’s enough opportunity to put a partnering arrangement in place rather than you trying to build it from scratch.
If partnering looks to be a viable option, the plan must establish a period of time to measure progress based on a set of common, agreed upon milestones. The plan must discuss what each partner’s role will be and how that will evolve over a period of time with the understanding that as the partnership continues, both partners learn more about each other, the technology and naturally become back-ups for each other. Establish decisions point discussions: Do we continue? Do we stop? Make the discussions focused on how the partnership is going, and what the path is to the next decision point. The partnership has to be a win-win for both partners. Keep this in mind at all times: no one can do it all alone!
A benefit of working a partnership in this manner is that if a partner is looking at acquiring or getting acquired this is the best approach to start that process. Working together, getting to know each other, experiencing success and failure together are great bell-weathers for determining if conditions really are right to have acquisition strategy discussions. Remember the keys: It is all about culture, values and common vision. Technology is the commodity here, the bonding force, reason to continue discussions is the common vision, common values. It is all about the key assets of each business and that is ‘the people’ – team members and clients.
Got a question or concern Terry can address? Send it to
