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Maximizing Channel ROI The Importance of Collaboration to High-Tech Selling Sales II: Advanced Strategies Saideep Raj, Accenture Ron Ref, Accenture

Accenture Overview  Revenue: $16+ Billion total with $4+ Billion in the Communications, Electronics, and High Tech markets  Employees: 158,000 People around the globe  Clients: Approximately 4,000 clients that span the full range of industries around the world including 91 of the Fortune Global 100  Services: Our work covers the entire life cycle from initial strategy development through systems integration all the way through outsourcing leveraging a world class global service delivery network  Example engagements:  Channel and program design  Sales force optimization  Partner Relationship Management  Sales operations outsourcing  Channel Operating & Capability  Lead generation outsourcing  Models Customer data management  Channel Profitability  Marketing Optimization  Geo/Emerging markets expansion Copyright © 2007 Accenture All Rights Reserved. 2

Increasing pressure for Vendor-Partner engagement in High-Tech  The buying and selling discussion is changing  Unique solution offerings are growing in numbers  Differentiation through specialization is rising  Business models continue to evolve …the business dialogue is changing Copyright © 2007 Accenture All Rights Reserved. 4

Solution complexity is increasing in High- Tech - Spectrum of Business Focus - Product Services Focused Focused Services Solutions Services Services Product are the differentiate are the support Only Products Products Products Products Model 2: Model 3: Model 5: Model 1: Model 4: Service Service Business Random Solution Opportunist Specialist Integrator Opportunist Led INCREASING COLLABORATION Copyright © 2007 Accenture All Rights Reserved. 5

Transforming from a ‘Sneaker Network’ to a ‘Collaborative Network’  Historically it has been about who you know  The challenge is to scale to a collaborative network across the value-chain  It requires new capabilities spanning innovative strategic operating models, business processes, competencies and technologies Copyright © 2007 Accenture All Rights Reserved. 6

‘Collaborative Networks’ will require companies to do something different What’s different? Collaborative Capabilities • How well do you integrate Collaborative Design the partner insights into your & Development design & development process? • Are you enabling your Collaborative Marketing partners to plan and market unique solutions? • How will you meet the need of configuring solutions with Collaborative Selling partners that cross multiple product lines? • Who’s services are you Collaborative Solution partners selling & delivering: Delivery yours or their own? © 2007 Accenture. All rights reserved. 7

The Collaboration Continuum - Channel Business Model Phases - Transactional Collaborative Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Collaborative Managed Enabled Interactive Virtual Service Channel Channel Channel Franchise Channel Channel “Advanced Sales “McDonald’s Like “Product “Specialization / & Delivery Front/Back Office Authorization Basic Service “Vendor GtM of Collaborative Enablement” Focus” Delivery” & Co-Branding” Solutions” Design/Dev Marketing Selling Svc Delivery Copyright © 2007 Accenture All Rights Reserved. 8

Technology as an Enabler  Increasing adoption of social networking technologies in the workplace  Convergence around virtual collaboration tools  New appetite to address ‘data sharing’ barriers?  Unique opportunity of the multi-tenant SaaS model to enable data sharing Copyright © 2007 Accenture All Rights Reserved. 9

Target: Collaboration at Scale = 5 P’s Improving partnership PRODUCTIVITY Enhancing Increasing partnership value partnership PROPOSITION PROFITABILITY Creating Driving partnership partnership service PATRONAGE PREDICTABILITY Copyright © 2007 Accenture All Rights Reserved. 10

Case Study #1: Collaborative Service Portfolio Services Enablement Model Sophistication - Resell Only - - Subcontract - - Collaborative Service - V C V V P Sales Interactions C C OR V P P C P V V V Delivery C C C Interactions P P P V = Vendor P = Partner C = Customer Copyright © 2007 Accenture All Rights Reserved. 12 opyright © 2007 Accenture All Rights Reserved.

Case Study #1: Collaborative Service Portfolio - Success Requires Quantifying Partner Value Levers… - Current New Profit Profit Vendor Levers For Technical Support Services Lever Lever Advantage Advantage Position Examples Position Channel Dealer Buy Price Vendor Channel $ 506 $ 405 Vendor (Standard Sales Discount) Channel Service Program Rebate Vendor Channel $ 40 $ 133 Vendor (Service Delivery Program Payment) Channel Service Delivery Payments Vendor Channel $ 200 $ 352 Vendor (Event-based payment from Vendor) Vendor Spare Parts/Inventory Usage Fees Vendor Channel $ 198 $ 324 Channel (weighted average based on usage) • Different levers close the profit gap between vendor and channel branded services • This is an “absolute” assessment where value levers are looked at individually • Analysis must consider “ripple effect” of a single lever on overall partner program Copyright © 2007 Accenture All Rights Reserved. 13

Case Study #1: Collaborative Service Portfolio - Results can be Significant - Vendor Benefit Partner Benefit  Potential to drive higher Growth in Partner Attach Rates and Revenues (Revenue data expressed annually) profit margins with revised vendor branded Current Current Potential Potential services Vendor Vendor Vendor Vendor Revenues Attach Rate Attach Rate Revenues  Ability to offer expand service offering $9M 16% 42% $19M 159% Increase Product 1 portfolio  Ability to access new $25M 20% 40% $39M 102% Increase Product 2 customer segments previously inaccessible $13M 18% 112% Increase 37% $25M Product 3  Strengthened $47M $83M relationship with the vendor Benefit: $36M Copyright © 2007 Accenture All Rights Reserved. 14

Case Study #2: Virtual Franchise - Typical Value Chain vs. Virtual Franchise Value Chain- Typical Value Chain  Duplicated infrastructure costs End Xerox Suppliers Manufacturer Partner Customer  One-size-fits-all products  Limited ability to define the experience  Transaction oriented Virtual Franchise Value Chain  Integrated infrastructures End Suppliers Manufacturer Partner Customer  Customized solutions  Scaled capability for consistent experience  Collaborative oriented “This is the best tool we have to grow revenue through our partners.” - Client Senior Vice President & General Manager of Global Services Copyright © 2007 Accenture All Rights Reserved. 15

Case Study #2: Virtual Franchise - Vendor Virtual Franchise: Economies Across the Value Chain - Design & Market & Manage Manage Manage Manage Manage Develop Launch Sales Customer Delivery IT HR Solutions Solutions Operations Support Operations Sales Support Example Pooled Logistics Example Contract Mgmt & Partner 1 Partner 1 10 Spares Renewal Platform Contract Mgmt & Partner 2 10 Spares Partner 2 Renewal Platform Contract Mgmt & 22 Spares 1 Platform Partner 3 10 Spares Partner 3 Renewal Platform Pooled Vendor Shared Services Contract Mgmt & Partner 4 Partner 4 10 Spares Inventory Platform For Sales Renewal Platform Contract Mgmt & 10 Spares Partner 5 Partner 5 Renewal Platform Copyright © 2007 Accenture All Rights Reserved. 16

Case Study #2: Virtual Franchise - Virtual Franchise Value Proposition - End Suppliers Manufacturer Partner Customer Customer Value Proposition Partner Value Proposition Vendor Value Proposition • Drive growth through: • Meet growth targets • Predictability in service quality through scale of partner – Enhanced core capabilities • Predictability in service value capabilities – Faster TTM of solutions – Enabling systems • Predictability in service • Faster technology – Leverage of Vendor brand availability adoption • Improve profitability via new • Generate new services service offerings and revenue streams cost effective business • Increase partner loyalty & systems and tools switching costs Copyright © 2007 Accenture All Rights Reserved. 17

Key Takeaways  Shifting from the ‘sneaker network’ isn’t easy  Fundamentally, the business - Channel Business Model Phases - Transactional Collaborativ e Virtual Enabled Managed Interactive Collaborative Franchise dialogue needs to change Channel Channel Channel Channel Channel Phase 1 Phase 2 Phase 3 Phase 4 Phase 5  Collaboration at scale requires End Suppliers Manufacturer Partner Customer business transformation Copyright © 2007 Accenture All Rights Reserved. 19

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