Unleashing the full power of strategic alliances and maximising the value of collaboration for a competitive advantage is an accelerating trend in the channel, and to get a window on this important development Comms Dealer research shed light on the factors driving the expansion of partnerships, providing food for thought among channel leaders during the gold standard Comms Vision conference this year (8th-10th November, Gleneagles).
The expansion of industry collaboration is essential to the future success of the channel, according to 90 per cent of the reseller/MSP business leaders we spoke to in our Channel Collaboration research. Furthermore, 92 per cent expect to see more collaboration between like-minded organisations in the channel over the coming two years, and they agree that collaboration in all its forms makes their world of opportunity bigger and more disruptive. It's a viewpoint echoed by Tom Robinson, Head of Commercial Indirect, Vodafone Business. "The conversations I'm having with channel partners are more entrepreneurial," he said. "They are disruptive and creative. They're conversations that probably wouldn't have taken place 18-24 months ago. The greater willingness and openness to sharing risk and reward allows us to have very different conversations that traditionally would not have taken place."
How we collaborate as a community is fundamental to driving momentum across the channel
Many of the channel's business leaders are addressing the challenge of finding growth in a complex and transforming ICT market by expanding their focus. Given this sentiment, it's not surprising that over 80 per cent of business leaders think the channel needs to elevate supply chain collaboration as an absolute priority - and two thirds say upstream suppliers could do better at collaborating with channel partners. "Greater collaboration is going to be an underpinning requirement," emphasised Dale Parkinson, Managing Director, Connectivity, Giacom. "There is a good reason for that: We are at a point of generational technology change and end user customers are stacking their businesses in the cloud. That opens up a fantastic opportunity to sell an ever widening range of products and solutions. Collaboration has to be at the heart of this."
By overlaying the expansion of alliances with the demands of ESG goals, the requirement for collaboration becomes ever more pressing among channel firms wanting to elevate their organisational purpose
This move towards more collaboration puts a spotlight on how the channel is reacting in agile ways to a transforming comms market that is growing in complexity against a backdrop of evolving demand factors, observed Gavin Jones, Channel Partners Director, BT Wholesale. "Technology is changing fast," he stated. "We saw massive change during the pandemic and all-IP is making things more software based. The world we operate in is faster, more dynamic and there's many more solutions - therefore you need a range of partners. The old days of exclusivity are long gone because you can't address all of the opportunities. Collaborative partnerships that enable you to adapt at the speed of the market are critical."
According to Sam Weller, Head of Wholesale, Sky Business, this means working harder at having more direct conversations. "The barrier can be that we are all busy - there's lots of people to see and support - and there may be a limited number of subject matter experts," he said. "But creating a community, as Comms Vision has done, allows us to exchange ideas, exchange thoughts and challenge each other, which is healthy. The decisions we make about who we partner with and take our learnings from are absolutely critical as we scale our business in the channel."
There is a more openness and willingness to collaborate and we are on the start of something quite interesting
But maximising the rewards of collaboration is not a guaranteed result of joining forces, meaning that strategic alliances must always be kept on track and the success factors maximised. For 86 per cent of business leaders the trend towards greater collaboration has brought trust forward as a key factor. According to the majority of this cohort, trust is not one dimensional, with most saying that trust between their business and partners has become more multifaceted. "Risk traditionally can be a bit taboo," said Robinson. "It's the conversation that people try to avoid. But with greater transparency and a degree of openness around facing into risk up-front, that helps build trust. Alongside risk comes reward. As long as we are open and collaborative in how we address that, and align and gain consensus on how we apportion risk and reward, then that's beneficial for the partnership."
According to our research, among those with a strategic focus on building greater trust in their business, over half (52 per cent) say trust is manifested through greater visibility and transparency, while closer communication is the main foundation of trust for 32 per cent. In this context, it is worth noting that nearly all expect to shift their focus onto future innovations, but only 18.5 per cent currently leverage alliances to boost innovation, probably due in large part to perceived risk.
"The reality is that you can't have innovation without some risk," stated Paul Smith, Chief Sales Officer (Partners), TalkTalk Wholesale Services. "We just need to be bold in how we work with collaboration. There's a massive ICT space out there that's very new to many partners and feels quite risky. Partners have great relationships with their customers, and collaboration allows you to work with other partners and take different approaches. So be OK with risk and explore it."
Open and collaborative partnerships that enable you to adapt at the speed of the market are critical
Robinson added: "Collaboration drives innovation, so greater collaboration is fundamental to the needs and wants of the industry we are servicing. There is a more openness and willingness to collaborate and we are on the start of something quite interesting. In terms of partners and conversations with customers, there's almost an expectation for collaboration which we've not seen to this degree before. Innovation in isolation is dangerous and hard to do. And how we collaborate as a community is fundamental to driving momentum across the channel."
It is good news that over 80 per cent of reseller/MSP business leaders in our survey think the channel needs to elevate supply chain collaboration as an absolute priority, and it's fair to say that they have a head start. "From a comms perspective, partners have been collaborating at a local level for many years," commented Parkinson. "But the technology change we are going through will substantially change that, especially when you consider what SMBs want from the partners that we serve. This may change how organisations need to work together at a channel level and across the vendor community.
"We are moving away from volume-based programmes to the vendor community effectively orchestrating an ecosystem of partners with a multiple set of disciplines because, ultimately, that is what customers will be asking for. Broadening out capability and portfolio through collaboration is a fantastic opportunity for the channel."
Furthermore, by overlaying the expansion of alliances with the demands of ESG goals the requirement for collaboration becomes ever more pressing among channel firms wanting to elevate their organisational purpose. "There is an opportunity to explore meeting ESG targets with partners," said Robinson. "Organisations will be at different stages on their ESG journeys. It's front and centre for us, and there is an opportunity for partners to take advantage of our knowledge and understanding. There is synergy in information sharing."
Collaboration drives innovation, so greater collaboration is fundamental to the needs and wants of the industry we are servicing
According to Parkinson, in terms of vendor-to-vendor and vendor-into-channel partners, much more needs to done on ESG. "It's not just about net zero or key parts of an ESG policy, there are adjacent topics – like digital inclusion, rural broadband and supporting the most vulnerable people in society – that we can have a bigger impact on by working together more effectively," he stated. "Everyone stands to gain."
That value and growth will be enhanced by ESG compliance is beyond question, and an observation made by Andy Wilson, Sales Director, Wholesale Channel, CityFibre, serves as a harbinger of what's to come. "In our supply chain we are actively choosing partners who have a low emission carbon plan," he stated. "Equally, we recently won a big rural scheme in Cambridgeshire and one of the primary points in contract negotiations was around showing our ESG commitments. In general, collaboration reflects the continual evolution of what is effectively an ecosystem. Gone are the days of supplier-customer and supplier-partner relationships. To be successful in this market you've got to add value through working together."
More key points to consider
Gavin Jones, Channel Partners Director, BT Wholesale
Everybody should be sharing skills, knowledge, experience and innovation. In this changing world no-one can be an expert in everything.
Tom Robinson, Head of Commercial Indirect, Vodafone Business
The partner community informs, educates, provides insight and has a level of entrepreneurial spirit that helps guide and shape our thinking as operators.
Andy Wilson, Sales Director, Wholesale Channel, CityFibre
From an altnet perspective, and as a challenger in that market, working with other alternative network providers is critical.
Paul Smith Chief Sales Officer (Partners), TalkTalk Wholesale Services
Regulations can make everyone more risk averse, but if you go down that route you stop innovating. There needs to be a strong voice around pushing forward. Shared goals drive change but we can do more, and everyone should be open to what collaboration can bring. It's a win-win.
Sam Weller, Head of Wholesale, Sky Business
Sky Zero commits us to being carbon neutral by 2030, and the thought, effort and innovation that goes into delivering against those commitments gives us insight. It's incumbent on resellers in the channel to demand that insight of their suppliers, even though their mindset might just be around hard numbers and growth.
Gavin Jones, Channel Partners Director, BT Wholesale
Microsoft Teams is ubiquitous across a lot of organisations but there is a complexity to rolling Teams out that partners need to address. This is where collaboration comes in. Helping partners to educate, be aware and be able to sell such services is our role.