Viewpoint

Ted Grossman talks to Mary Iverson, Cisco's Manager of Operations
about the changing role of the channel oganization.

Ted Grossman: Tell me about the role that the Channel organization plays within Cisco?

Mary Iverson: Historically, the Channel organization has represented about 20% of Cisco's field force and has played a supportive role ensuring that Cisco's channel partners are familiar with and have access to all of the various programs and tools to conduct the business of Cisco. Additionally, the Channel organization helped Cisco's direct sales force identify partners who were capable of delivering what the direct sales force was selling.

Currently about 50% of all sales are driven by the direct sales force; the other 50% are driven by the channel. Over time, however, we see our channel partners picking up and driving more of the direct sales to our end customers.

Ted Grossman: As channel partners are driving a larger part of the business, what effect has this had on the channel organization within Cisco?

Mary Iverson: The big change is that our Channel Account Managers (CAMs) have to do more to ensure that channel partners are actually creating and delivering vertical or industry solutions into the market based on Cisco's latest technologies.

So, the role of the Cisco CAM is evolving from very administrative and tactical to more strategic. Going forward, the CAM will help guide the strategic direction of our partners to ensure that the partnership is profitable for them and for Cisco. Done correctly, the partnership ensures that maximum quality and value is delivered to our customers.

Ted Grossman: As Cisco's channel organization deals with this transition, what are some of the key challenges that you see them facing?

Mary Iverson: Well, there are a number of challenges that we have to overcome. The first is simply overcoming our own history. People who are currently in the CAM role have gotten used to doing administrative and supportive tasks. A lot of these tasks, albeit necessary, are very tactical. If we're going to move the CAMs into a more strategic role, we've got to determine how we can manage these tasks going forward. So there's a potential for a whole set of productivity measures including better use of technology, creation of centralized support centers and simply off-loading more administrative tasks to lower salaried individuals.

The channel is also challenged to create training and development programs that support a higher value sales process going forward. We've started by providing the CAMs with direction and vision on the skills and competencies they will need to develop in the channel. Our next step is to build the training and development programs to support these competencies.

Lastly, and perhaps most important, Cisco as a corporation needs to step back and look at how we effectively measure and reward the CAMs in their new role.

Ted Grossman: What effect will the new CAM role have with regard to the direct sales force?

Mary Iverson: In defining the new role and trying to make the Channel more effective, we spent a lot of time talking with the direct sales force and with channel partners. The sales force understands the need for change, but there is legitimate concern for how we roll it out and whether we will be ready.

Traditionally, the CAM role has been very supportive of the AM. Typically the AM was the driving force behind the sale; the AM prospected, built relationships and got the deal within weeks of closing before contacting the partner. Once the partner was contacted the CAM would facilitate communications and ensure that the partner properly fulfilled the order.

What we're now hearing from our senior leadership is that this model needs to change. To effectively sell in the future, we need to act as a team earlier in the sales process, bring in the most capable partner to deliver the specific solution and work in a more coordinated way throughout the sales process. This will allow partners to better leverage their knowledge and expertise. Customers will be the ultimate beneficiary as they experience a more coordinated effort and are presented a broader and more complete solution.

What this means for our AMs is that we will be asking them to identify and involve our partners earlier in the game, and this means relinquishing some control. In the end the customer will benefit the most, but it will require changing the way the AMs, the CAMs and the partners work together.

Ted Grossman: How are the channel partners reacting to changing the role of the CAM? Is this something that the channel partners are asking for from Cisco or is this something that Cisco is pushing?

Mary Iverson: That's a good question. Initially I would have thought that some of our bigger partners would resist the idea. I thought your HPs, IBMs and some of the large integrators just wanted us to give them product and a program to participate in. It would be the next tier down and smaller partners who would welcome more strategic involvement from Cisco (i.e. advice and direction on where they could move their business model).

What we're actually finding is that, almost universally, our partners are coming to Cisco asking us to help them understand where the opportunities are, and where should they be directing their business.

Ted Grossman: This is a big change for Cisco. What sort of timeline are you looking at?

Mary Iverson: I think there are numerous answers to that. We're currently seeing pockets of acceptance and implementation already happening. For example, we've got some teams in North America and Europe and in some of the more advanced areas of Emerging Markets, who have jumped on this because they realize that this is the best way to do business.

We're also seeing some of our Emerging Markets adopt a more involved partner model because Cisco hasn't had a history of a direct sales force within these regions. The regional leadership has had to rely on the partners by default. So there's more acceptance of getting deals done together.

On a broader level, I think Cisco management would like to see this model happen sooner rather then later but I'm not exactly sure how fast this will be pushed. What we're doing is pushing this top-down through discussions at our global sales meetings, as well as using early success stories as a catalyst.

Ted Grossman: What steps is Cisco taking to support this change?

Mary Iverson: We need to elevate the skills within the CAM community and we certainly need to change their impact. We, in channel training, have been really pushing for updating the curriculum of our CAMs and ChSEs and ensuring that these roles are filled by people who can act as strategic business advisors for our Channel partners. Specifically, we're planning on providing a combined training effort, where the AMs, CAMs, and Channel Management train together on strategic thinking, planning skills and executive communication. The objective is to have all the players in the same room and paint the picture of how they will interact with each other.

Additionally, there are some collective efforts to better enable the channel and allow the CAM role to be more strategic. A key initiative is the rollout of productivity offices whose objective will be to take administrative and support burden off of the CAMs and AMs.

Most importantly, we'll be asking our senior theater leadership to champion communications within their geography. Their role will be to support and reinforce the need for moving to the new model and ensure that the AMs and CAMs understand and buy into the changes to the engagement model.

Mary Iverson is a Manager of Operations within Cisco’s Worldwide Channel Operations group. Her primary focus is driving a globally consistent development program and curriculum for Cisco’s Channel Account Managers (CAMs) and Channel System Engineers (ChSEs).