+ All Categories
Home > Documents > Profitability Benchmark Playbook › ~ › media › ...Profitability Benchmark Playbook...

Profitability Benchmark Playbook › ~ › media › ...Profitability Benchmark Playbook...

Date post: 03-Jul-2020
Category:
Author: others
View: 7 times
Download: 1 times
Share this document with a friend
Embed Size (px)
of 10 /10
Profitability Benchmark Playbook Profitability Benchmark Playbook Profitability Benchmark Playbook Page 01 Partners are transforming their businesses to take full advantage of the cloud, and many need help making this transition. Through IDC research and discussions with thousands of partners around the world, we’ve identified four core pillars of the modern partner that contribute to building a successful, profitable cloud business. Our findings are summarized in the Modern Microsoft Partner series, a collection of five ebooks designed to help IT solution providers on their journey to success in the cloud. This playbook synthesizes, for each of 4 pillars (differentiate to stand out, modernize sales and marketing, optimize your operations and deliver customer lifetime value) the best practices those Modern Partners imple- mented throughout their journey to the Cloud, from start, through grow, to optimize maturity level.
Transcript
  • Profitability BenchmarkPlaybook

    Profitability Benchmark Playbook

    Profitability Benchmark Playbook Page 01

    Partners are transforming their businesses to take full advantage of the cloud, and many need help making this transition. Through IDC research and discussions with thousands of partners around the world, we’ve identified four core pillars of the modern partner that contribute to building a successful, profitable cloud business. Our findings are summarized in the Modern Microsoft Partner series,  a collection of five ebooks designed to help IT solution providers on their journey to success in the cloud.

    This playbook synthesizes, for each of 4 pillars (differentiate to stand out, modernize sales and marketing, optimize your operations and deliver customer lifetime value)  the best practices those Modern Partners imple-mented throughout their journey to the Cloud, from start, through grow, to optimize maturity level.

    http://aka.ms/modernpartner

  • Differentiate to Stand Out

    The successful partner of the future will have to differentiate his or her practice from the wide and growing variety of

    competitors in the market. The competition is no longer just other IT channel partners in your territory, but with IT

    partners worldwide, as well as vendors outside of IT such as operating technology companies (think about

    companies who deal with electrical, pumps, HVAC, etc.) and telco providers. There is also a growing influx of new

    solution providers coming from born in the cloud startups and even spinoff companies that started as internal

    customer IT projects.

    Go through your past projects in detail with an independent, unbiased eye to identify vertical, process, functional, or technology common threads that you can turn into a specialization.

    Look for unique knowledge that your company has. Do you or one of your staff have a deep understanding of a particular market or use case?

    Pick one or two specializations and begin to investigate them further to gain a deeper understanding of the markets.

    Create a Target Customer Profile for each potential focus area that includes what makes that market unique and how your solution will help them.

    Begin to develop one or two focus areas into trial projects with a customer with whom you have a close relationship.

    Ramp up your specialization by making your solutions more and more specific to your selected markets’ needs.

    You may need to do the trial work for free or at a dramatically reduced cost. This may be an iterative process and the first attempt might not be successful, but keep working at it, it will be the key to your future.

    Start one step at a time, you don’t have to do everything at once. A small, very specific solution is better than a generic solution with a little surface-level, market-specific customization. Customers are looking at their business over a long-term horizon. A small successful project will allow you to expand your footprint with additional projects.

    If you are migrating customers to the cloud, add a managed service that helps customers accomplish their goals. Adding other ecosystem partners’ products might be a good way to start.

    READ THE DIFFERENTIATE TO STAND OUT EBOOK

    START

    Profitability Benchmark Playbook

    Profitability Benchmark Playbook Page 02

    http://benchmarktool.microsoft.internal.dev.vertic.com/track-link?hash=75BD66D345E60315B5E303F980CC2A78CD1F118D&eventname=Playbook_differentiation_ebook_download&url=http%3a%2f%2faka.ms%2fdifferentiate

  • Double-down and extend your lead on other solution providers who are still trying to figure out their specialization.

    If you are focused on a specific vertical, consider adding IP to your solutions.

    If you are IP focused, add vertically focused modules to that IP. Partner to get the vertical expertise you need by utilizing Pinpoint and other ecosystem resources.

    Expand your vertical portfolio. Look for vertical markets that have similar characteristics to your primary focus. If there are similar use cases and business practices, you probably have a good target expansion.

    Once you have a packaged product, look for marketplaces that would extend your reach.

    Identify the various third-party players who can contribute to your current practice. Then determine if there is a player (or two) who you can work with to build a solution more efficiently than starting from scratch.

    The deeper you understand your selected market and the more specific your solutions are to the markets’ unique needs, the more successful and profitable you will be.

    Use your own specialization experience to assist your customers to differentiate.

    Establish a staff member or team that is responsible for emerging technologies intelligence.

    OPTIMIZE

    Ramp up your specialization by making your solutions more and more specific to your selected markets’ needs. You may want to add market optimized language, vertically focused templates or specific use case solutions.

    Update your Target Customer Profile, expanding it to include user groups and their associated pain points. Include specific use cases for each user group, detailing your associated solution.

    Begin to develop tactics to maintain ownership of code developed during professional service projects. Create a perpetual license agreement that clearly identifies IP ownership. Consider using online legal resources such as LegalZoom to create the agreement.

    Continuously review your specialization projects and build and expand on the most successful.

    If you need to add vertical expertise, look for partners that offer those skills by utilizing Pinpoint and other ecosystem resources.

    Invest in growing your reference accounts and continue to grow your capabilities.

    Brand your differentiation. Start by using outside help.

    Expand your vertical portfolio. Look for vertical markets that have similar characteristics to your primary focus.

    Communicate your most compelling target market use case stories with digital media.

    Stay close to your industry associations and follow social media sources and leaders in your target market.

    GROW

    Profitability Benchmark Playbook Page 03

    Profitability Benchmark Playbook

  • Modernize Sales and Marketing

    The successful partner of the future will earn some of his or her success to modernizing their sales and marketing.

    These partners have not only learned to build and leverage their digital presence, but also understand the new

    customer journey and capitalize upon that understanding with their sales and marketing activities.

    READ THE DIFFERENTIATE TO STAND OUT EBOOK

    Revisit your company differentiation, what makes a customer want to choose you? The market is moving fast, so it is worthwhile having regular checkups to review this.

    Map out your customer journey and content to serve them at varying stages – leverage your workforce to gain insights and start to use the customer journey thinking as common language in your business.

    Clarify your key sales and marketing themes and engage your workforce in social activities to extend the reach of your messages. Identify initial potential bloggers and social media champions to act as evangelists.

    Review your digital content – do you need to update and refresh? Websites are a classic area that tend to get stale fast, so start there as that is where your customers either first visit you or are driven by future activities. Your website needs to represent your DNA.

    Get professional marketing help – whether that be in the form of investigating marketing tools, or engaging a specialist digital marketing agency. These tools and resources are a way to fast track your progress.

    Visit the Mic rosoft Smart Partner Marketing site – there are lots of great resources and partner case studies that can help you to define your next steps.

    START

    Profitability Benchmark Playbook

    Profitability Benchmark Playbook Page 04

    http://benchmarktool.microsoft.internal.dev.vertic.com/track-link?hash=75BD66D345E60315B5E303F980CC2A78CD1F118D&eventname=Playbook_differentiation_ebook_download&url=http%3a%2f%2faka.ms%2fdifferentiate

  • Aim for a completely connected and measureable customer journey, using tools and specialist resources that enable you to be more efficient in your customer interactions. Drive towards a company DNA that thinks customer first.Expand your social selling efforts by engaging your executives as well as your workforce. Use their credibility to drive more interactions.

    Define customer journeys by customer types and roles – really understand who the target role is who consumes and makes decisions on the purchase, and drive to understand their pain points.

    Hire industry expertise – really look to get closer to the industries and customers you are targeting by recruiting staff with more in depth knowledge and experience of those industries.

    Continually refine and evolve your modern sales and marketing approach. We are in a time of much technology change, and the pace of change means you can’t afford to stand still.

    OPTIMIZE

    Identify your big key themes, and start to build out a deeper campaign strategy with messaging that can be pushed out via social selling.

    Build out your modern marketing strategy, and share with your workforce. Expand your customer journey thinking and really start to engage your workforce at all stages. Define active roles they will play and garner their insights and feedback to improve the customer journey knowledge.

    Review and improve your measurement of sales and marketing activities. Look to identify and share what is successful and what is less successful, and evolve your plans based on these insights.

    Rethink the way you develop your digital content across the customer journey. Think of ways to stand out, give customers an insight into your DNA and also help them along their journey.

    Keep visiting the Microsoft Smart Partner Marketing site – as you evolve, you will find examples of partners like you who are also evolving that might spark some new ideas.

    GROW

    Profitability Benchmark Playbook

    Profitability Benchmark Playbook Page 05

  • Optimize Your Operations

    Optimizing your operations requires focus and discipline. You need to pay attention to documenting your processes

    and methods, allocating your resources in the most cost effective way, and measuring your performance. These

    insights can help you get started or help you get better at running a profitable cloud business.

    READ THE DIFFERENTIATE TO STAND OUT EBOOK

    Begin with an honest assessment of your current operations. How well aligned are they with the characteristics of a successful cloud business? Do you have the right people, processes and technology in place to sell and deliver services on a recurring revenue basis?

    You don't have to do everything at once. Start with a gap analysis, then put a plan in place to make the required changes based on what you've determined are the top readiness priorities.

    If you aren't already doing it, start tracking the time and resources involved in delivering projects and services to clients. Start to consistently and accurately measure utilization.

    Set appropriate financial targets for your cloud business, realizing you won’t break even right away or turn a profit in the near term. Plan for how you will fund revenue shortfalls while you get your recurring revenue stream up and running.

    START

    Profitability Benchmark Playbook

    Profitability Benchmark Playbook Page 06

    http://benchmarktool.microsoft.internal.dev.vertic.com/track-link?hash=75BD66D345E60315B5E303F980CC2A78CD1F118D&eventname=Playbook_differentiation_ebook_download&url=http%3a%2f%2faka.ms%2fdifferentiate

  • Regularly assess your processes and repeatable methods and fine tune them based on lessons learned.

    If something that should be standard constantly requires adjustment, go back to the drawing board and fix it.

    Continue to look for opportunities to automate or to refine existing tools.

    Raise the bar on your performance metrics. Profitability should increase as you solidify your cloud revenue streams.

    Dedicate time and effort to incubating potential products and services that are emerging opportunities.

    Always include slack in your pricing to cover unforeseen circumstances that could affect profitability.

    Keep track of how much time you are spending on running daily operations as opposed to more strategic management tasks and adjust if necessary.

    OPTIMIZE

    Regularly measure gross margin, utilization, and billable markup rate. Set performance benchmarks and have a plan for how to improve if you fall below the baseline.

    Identify your profit pools, or the core activities in your business that generate gross profit. Allocate resources proportionately based on profit potential.

    Look at the last 20 or 30 or even 50 projects you delivered to see what could be reused in future projects.

    Focus on standardization of tasks, methods and processes to make staff more efficient, delivery effort more predictable, and quality more certain.

    Identify opportunities for automation. Take advantage of commercial tools already available within the Microsoft ecosystem.

    Use variable pay to reward high utilization and stewardship of project profitability.

    Allocate time for ongoing learning. As skills increase, so should fees.

    Reduce your reliance on charging based on hourly or daily rates in favor of charging based on a deliverable or outcome.

    GROW

    Profitability Benchmark Playbook Page 07

    Profitability Benchmark Playbook

  • Deliver Lifetime Customer Value

    Lifetime value does not happen without a plan. You need to map out the cloud journey in collaboration with your customer. What should they do first? Where will they be in two, three or five years? Once you have the plan, you can work with the customer to make potential business benefits a reality. Everything doesn’t need to happen at once, but it does need to happen in a thoughtful and logical way. Always be thinking about what’s next: would complementary or incremental functionality be a good fit at your customer’s stage in cloud maturity?

    READ THE DIFFERENTIATE TO STAND OUT EBOOK

    Define your company’s value proposition and what you want to be known for. That’s the first step in determining where you will add customer value. Read the “Differentiate to Stand Out” ebook to learn more about how you can stake out your unique value.

    Begin with the end in mind. Identify the services you will provide beyond resale and basic cloud migration. What project services, managed services and IP services can you offer?

    Ask lots of questions to build up your understanding of your customer’s business. Focus on helping customers learn how to solve their most pressing pain points.

    Get yourself designated as digital partner of record for every customer. That’s the key to understanding how your customer is using their cloud solutions. The Cloud Services Partner Dashboard provides both a summary report about your competencies and benefits and cloud performance metrics for your customer subscriptions.

    START

    Profitability Benchmark Playbook

    Profitability Benchmark Playbook Page 08

    http://benchmarktool.microsoft.internal.dev.vertic.com/track-link?hash=75BD66D345E60315B5E303F980CC2A78CD1F118D&eventname=Playbook_differentiation_ebook_download&url=http%3a%2f%2faka.ms%2fdifferentiate

  • Read the “Optimize Your Operations” ebook for insights into how other partners have built repeatable methods and processes.

    Fine-tune your customer satisfaction measures and feedback loop. Instill customer satisfaction as a core value for your organization by making it part of everyone’s goals.

    Segment your customers and prospects based on their lifetime value potential. Allocate resources to maximize high value success and reward staff based on nurturing customer lifetime value.

    Establish an adoption portal that consolidates learning assets and content. Use technology to leverage training and education resources and provide self-service learning.

    Help your customers on their digital transformation journey. Emphasize your skills and experience with all types of integration (business processes, enterprise applications, enabling technologies, interdisciplinary teams) as key to your customer’s digital transformation success.

    Ensure your customers all have designated cloud business owners and maintain close ties with them to drive implementation of the cloud adoption plan.

    Always bring cloud best practices to the table, based on your own depth of knowledge of the solutions.

    OPTIMIZE

    Consult the “Modernize Sales and Marketing” ebook for ideas on how to adjust your cloud sales and marketing approach to be more successful.

    Build your skills at consultative sales. Have conversations with your customers about their business challenges and opportunities, and offer solutions that are relevant to their short and long term needs.

    Communicate the value you have created for your customers by publishing customer success stories to provide examples of the business benefits that have been achieved.

    Consider adding a dedicated customer support role to work side-by-side with the customer to make sure they stay engaged over the long run of the relationship.

    Keep a laser focus on churn management and reduction by staying on top of customer retention activities.

    Leverage your MPN internal use rights to track your customer relationships and opportunities through CRM Online.

    Your customer is ready to talk about digital transformation. Use Microsoft resources to get ready to have the conversation.

    Establish a formal customer satisfaction measurement process and learn from the feedback. Make sure your customers know you are listening.

    Work with your customer to develop a long term adoption plan. Help them move through cloud adoption in a logical way to achieve incremental business value.

    Fine tune your up-sell and cross-sell tactics while proactively connecting with your customers.

    Train customer trainers to be cloud usage champions. That way, cloud solution skills and knowledge will filter through the entire organization more quickly.

    GROW

    Profitability Benchmark Playbook Page 09

    Profitability Benchmark Playbook

  • Thanks for taking the time to read the playbook. We hope you identified  opportunities to improve your performance. If you want to determine the overall maturity level of your company as well as its maturity level for each of the 4 pillars of the Modern Partner,  we recommend that you take a simple online assessment. Baselines for this assessment come from a survey launched in December 2015 of 411 solution provider partners spanning more than 60 countries.

    Profitability Benchmark Playbook Page 10

    Profitability Benchmark Playbook

    http://profitabilitybenchmark.microsoft.com

Recommended