ESSENTIALS FOR MUTUALLY PROFITABLE CO-DEVELOPMENT
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1 ESSENTIALS FOR MUTUALLY PROFITABLE CO-DEVELOPMENT Steve Steinhilber Vice President, Strategic Alliances 1
2 Cisco Systems, Inc. All rights reserved. 2
3 Cisco had the distinction of being the only provider labeled best-in-class by every participant that also named Cisco a strategic partner. Gartner Dataquest, Alliances Best Practices Survey Report, Feb Presentation_ID 2003, 2004 Cisco Systems, Inc. All rights reserved. 3
4 Cisco Systems, Inc. All rights reserved. 4
5 Cisco s Strategic Alliances 5
6 Cisco Corporate Strategy BUY BUILD PARTNER Cisco Systems, Inc. All rights reserved.
7 Build, Buy or Partner? Build Criteria Technology exists in house Technology is in development with sufficient time to complete Cisco s next version represents best technical standard Buy Criteria Technology is an essential component of the whole solution Technology is leveragable across other Cisco platforms Cisco has high familiarity with the technology (reduces integration costs) Small to mid-share company is available at a reasonable price Target company needs capital or market access High likelihood of key talent retention Partner Criteria Technology or functional expertise complementary to Cisco s The need to access the technology seen as one-time event Little in-house Cisco knowledge of the technology or service High barriers to acquisition (strong, expensive target company) Opportunity to create/boost pull demand for existing Cisco products 7
8 6. Constant Measurement 5. Early Field Alignment 4. Early Customer Wins 3. Gated Phases 2. Alliance Governance Framework 1. Shared Strategic Map 8
9 1. Shared Strategic Map 9
10 What Belongs in a Shared Strategic Map? External factors creating opportunities and threats Key customers and customer value proposition Joint solution architecture Delivery, service and support strategy Roles and responsibilities Mutual goal(s) with milestones and metrics Routes to goal(s) Competitive positioning Exit options 2003, 2004 Cisco Systems, Inc. All rights reserved. 10
11 Failure to Articulate Specific, Common Goal(s) Lack of Unique Customer Value Proposition 1. Shared Strategic Map 11
12 2. Alliance Governance Framework 1. Shared Strategic Map 12
13 Typical Cisco Governance Model 13
14 Relationship Vigilance Cisco Executive/Role CEO SVP, Technology VP, Sales VP, EMEA Director, Cust. Advocacy GM, BU Alliance Manager Partner Peer/Role CEO SVP, Enterprise Solutions VP, Sales VP, EMEA Director, Services GM, BU Alliance Manager Q1CY04 Status 2003, 2004 Cisco Systems, Inc. All rights reserved. 14
15 Lack of Trust Too Limited Set of Partner Touchpoints 2. Alliance Governance Framework 1. Shared Strategic Map 15
16 3. Gated Phases 2. Alliance Governance Framework 1. Shared Strategic Map 16
17 Three Critical Gates Concept Commit Execute Commit Launch Commit Step 1: Discovery Step 2: Evaluation Step 3: Planning Step 4: Execution Step 5: Launch Step 6: Support Define the opportunity Evaluate the opportunity Build the business plan Confirm launch readiness Launch the solution Provide ongoing support 2003, 2004 Cisco Systems, Inc. All rights reserved. 17
18 Gate 1: Concept Commit Define and Evaluate the Opportunity Concept Commit Step 1: Discovery Step 2: Evaluation Solution Overview Value Proposition Market Overview Risks/Barriers to Entry Sponsorship Strategic Fit Technical Feasibility Financial Analysis Stakeholder Commitment 2003, 2004 Cisco Systems, Inc. All rights reserved. 18
19 Gate 2: Execute Commit Execute Commit Step 3: Planning 2003, 2004 Cisco Systems, Inc. All rights reserved. Program Plan Governance Plan Go-to-Market Plan Engineering Plan IPR Allocation Test Plan Support Plan Training Plan Field Engagement Plan 19
20 Gate 3: Launch Commit Confirm Launch Readiness Launch Commit Step 4: Execution Step 5: Launch Launch Readiness Summary Marketing Plan Legal Agreements 2003, 2004 Cisco Systems, Inc. All rights reserved. 20
21 Launching Deal before Solid Business Plan in Place Launching Deal with Inappropriate Org. Model/Team Under-Resourcing/Planning Alliance Ramp-Up 3. Gated Phases 2. Alliance Governance Framework 1. Shared Strategic Map 21
22 4. Early Field Engagement 3. Gated Phases 2. Alliance Governance Framework 1. Shared Strategic Map 22
23 Why Important? Sales Cycle Sales Focus Expertise Cisco Sales Model days Products Networking Needs Sales Cycle Gap Different Compensation Models Different Value to Client Partner Sales Model 6-12 months Services Business Needs 2003, 2004 Cisco Systems, Inc. All rights reserved. 23
24 Cisco Solution Sales Cycle Sales Focus Expertise Cisco Sales Model days Products Networking Needs Early Engagement Prototyping Collaborate on select accounts Refine engagement model Partner Sales Model 6-12 months Services Business Needs 2003, 2004 Cisco Systems, Inc. All rights reserved. 24
25 Cisco Solution Sales Cycle Sales Focus Expertise Cisco Sales Model days Products Networking Needs Sales Overlay Teams Smooth differences in sales structures Apply focus on partnership GTM Guide partnership sales process Partner Sales Model 6-12 months Services Business Needs 2003, 2004 Cisco Systems, Inc. All rights reserved. 25
26 Cisco Solution Sales Cycle Sales Focus Expertise Cisco Sales Model days Products Networking Needs Compensation Tailored to Partner, Value-Add Consultants: Rewarded for creating demand Resellers: Rewarded for solutions delivery Partner Sales Model 6-12 months Services Business Needs 2003, 2004 Cisco Systems, Inc. All rights reserved. 26
27 Not Making Field Relationship Co-Owner Mis-Aligning Field Incentives 4. Early Field Alignment 3. Gated Phases 2. Alliance Governance Structure 1. Shared Strategic Map 27
28 5. Early Customer Wins 4. Early Field Engagement 3. Gated Phases 2. Alliance Governance Structure 1. Shared Strategic Map 28
29 Early Customer Wins Why Important? Motivate teams Communicate value of alliance to shareholders Demonstrate substance to industry influencers Help all stakeholders stay committed How Manage? Make successful beta customers a priority Keep team focused on customer 2003, 2004 Cisco Systems, Inc. All rights reserved. 29
30 Launching Solution Without Customer Validation Not-Invented-Here Syndrome 5. Early Customer Wins 4. Early Field Engagement 3. Gated Phases 2. Alliance Governance Structure 1. Shared Strategic Map 30
31 6. Constant Measurement 5. Early Customer Wins 4. Early Field Engagement 3. Gated Phases 2. Alliance Governance Structure 1. Shared Strategic Map 31
32 Find Appropriate Metrics Business goals drive metrics Benchmarks for intangibles Operational and long-term ROI Clear articulation 2003, 2004 Cisco Systems, Inc. All rights reserved. 32
33 Examples of Metrics Integrator Partner A Technology Partner A Technology Partner B Bookings Customer Satisfaction New Business/New Accounts Practices Established Bookings Customer Satisfaction Certifications Vertical Solutions Developed Bookings Customer Satisfaction New Market Acceleration Standards Development 2003, 2004 Cisco Systems, Inc. All rights reserved. 33
34 Provide Meaningful Views Partner X Dashboard Q2FY04 FY04 Initiatives Initiative A Initiative B Initiative C Initiative D Marketing Development Status update on all initiatives and activities provided here, with next steps and action items Sales Engagements Top Customer Wins Customer A $M Customer B $M Customer C $M Customer D $M Customer E $M Customer F $M Executive Briefings Business Development Status update on all initiatives and activities provided here, with next steps and action items Supplier Rating Balance of Trade Categories Q2 Q2 CY04 CY04 Cisco Rev Partner Rev Cisco Rev Partner Rev Cisco Sales To End Customer Partner Sales To End Customer Sub Total # Brief Avg. Rating FY04YTD Bookings Revenue Q3FY03 Q4FY03 Q1FY04 Q2FY04 Bookings/Revenue ($M) FY02 FY03 Q1FY04 Q2FY04 Partner/Cisco Web Hits WW Q3FY03 Q4FY03 Q1FY04 Q2FY04 Cisco Purchases (internal use) Partner Purchases (Internal use) Grand Total URL hits Q4FY03 Q1FY04 Q1FY04 Q2FY04 Q2FY04 Public Site Shared Site News Success Stories 34
35 Provide Meaningful Views Partner Y Dashboard Q2FY04 FY04 Initiatives Technology 1. Eureka Solution Development 2. Discovery 3. Planning 4. Execution 5. Launch 6. Support Totals Initiative A Initiative B Initiative C Initiative D Mobility Security Content Networks Voice Total Emerging Other Verticals SP Grand Total Standards/Tech Collaboration Quarterly Progress Against Milestones (GYR) Q1FY04 Q2FY04 Milestones/Comments/Activities Objective A Objective B Emerging Tech. Specializations Mobility Security Content Networking Voice New Technology Specializations Total Specializations Q1FY04 Q2FY04 Objective C Bookings/Order Impact Partner Direct Bookings ($M) Q1FY04 Q2FY04 YTD FY04 Partner Associated Bookings Q1FY04 Q2FY04 YTD FY04 Program A Program B Program C Program D Total Indirect Bookings Grand Total Bookings! 35
36 Be Prepared to Act 2003, 2004 Cisco Cisco Systems, Systems, Inc. Inc. All All rights rights reserved. reserved. 36
37 Exit Options Transition Exit a JV Re-alignment 2003, 2004 Cisco Systems, Inc. All rights reserved. 37
38 Lack of Clear Metrics Reluctance to Adjust Resources if Goals Underachieved 6. Constant Measurement 5. Early Customer Wins 4. Early Field Engagement 3. Gated Phases 2. Alliance Governance Framework 1. Shared Strategic Map 38
39 6. Constant Measurement 5. Early Field Alignment 4. Early Customer Wins 3. Gated Phases 2. Alliance Governance Framework 1. Shared Strategic Map 39
40 Across Partner Type, Segment and Geography Consumer Electronics Companies Multimedia Consulting Integrators Security System Integrators Technology Companies Telephony Vertical Partners 40
41 2003 Cisco Systems, Inc. All rights reserved. 41
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