Faced with a gradual slowdown in their traditional business-to-business sales, telecom operators have been looking to expand into the adjacent IT/digital services industry, which has been growing at a much faster rate. However, operators’ current sales channels are not equipped for this purpose, and they therefore urgently need to develop an ecosystem of partners that can help them grasp this opportunity.
The IT/digital services market, worth around $52 billion in the Middle East and North Africa region in 2020, covers a wide range of services and products, including traditional IT services, cloud computing, the Internet of things, big data, and emerging technology services. According to IDC, this market is expected to be responsible for more than 80% of the projected USD 14.3 billion growth in the combined ICT market (which also incorporates telecom services) between 2020 and 2024.
However, telecom operators’ ambitions in this market are hampered by their existing mix of sales channels. Account managers responsible for large corporate accounts lack the product knowledge and consultative selling skills required for the more complex field of IT/digital services. Operators’ sales channels for small and medium-sized enterprises (SMEs), such as door-to-door sellers and telesales, are also unsuitable.
Telecom operators should therefore take a similar approach to global technology vendors and hyperscale cloud providers, such as Microsoft, AWS, Dell, and Cisco, who have benefited from extensive partnership networks with local IT and digital service providers. Such a channel has the potential to contribute more than 70% of an operator’s IT/digital sales in the SME segment, and up to 20% of these sales to large enterprises.
To realise this prize, the IT/digital partner channel should be diverse, encompassing a wide variety of complementary participants, such as system integrators, consultants, resellers, and distributors. Operators face competition for these partners’ sales attention from other suitors, such as global tech vendors and cloud providers. Developing the channel in a sustainable way therefore requires proper attention and investment.
First, operators need to identify the products they want partners to sell, as well as the customer segments that the channel should focus on. Business-to-business (B2B) leaders in telecom operators may not like the idea of partners selling the operators’ products to large corporations and key accounts. However, there are good reasons to allow them to do so.
Most operators are not well positioned in IT/digital business, and they would therefore benefit from multiple contacts with large companies. Besides, partners already have established relationships with these accounts so the operator would not necessarily be surrendering any relationships to them.
Second, operators need to decide what types of IT/digital partners would be most appropriate for each product and segment. For example, managed service providers and application integrators are likely to be adept at promoting in-country cloud hosting services. To win partners’ commitment, operators must define an appealing value proposition, demonstrating for example that the relationship will help partners win more business by giving them access to a strong brand and extensive customer reach.
Third, operators need to design key program components, such as benefits, partner tiers, and qualification requirements. If they are creating a program for the first time, operators could start with one tier with the minimum viable level of benefits for making the collaboration effective, and then augment benefits as the program expands.
Sales incentives are an important element of the value proposition for prospective partners. Combining various types of incentives can help to meet certain objectives. For example, partner discounts and rebates are the most effective means of attracting partners and building loyalty, while immediate bonuses for the partners’ sales team can boost sales. Clear and frequent communication on objectives and expected rewards, as well as transparent monitoring of performance, also boost partner motivation.
Finally, operators need to ensure that the right people, policies and processes are in place, and that the necessary tools are provided to partners. Partner Account Managers with good knowledge of the IT/ digital product portfolio are key to managing the relationship. They act as ambassadors of the partners within the telecom operator’s organisation, and spur sales performance. The broader B2B teams need to embrace the new channel. Product teams should develop products that create opportunities for partners, while marketing teams must provide partners with high-quality collateral and support.
By building a robust partner channel network in such a systematic fashion, telecom operators can reap the benefits from the fast-growing IT/digital market.
