IBM Gets Principled About the Channel

By Michael Vizard

All too often perception is reality. And the perception that most people have of IBM is that it likes to be in control. And that need to control things generally results in a predilection for taking most sales opportunities direct.

IBM executives are now starting a broad campaign to change that perception by publishing a "Principles of Engagement" document that outlines what IBM expects from its internal salespeople when dealing with the channel.

As with any rule book, there are exceptions. But by and large the document strongly states that IBM's senior executives expect that the preponderance of the company's sales will come through the channel.

The only exceptions to that statement are about 100 accounts that IBM has identified as house accounts, or if there is some sort of specific customer requirement or regulation that requires IBM to sell to the customer directly.

To put some teeth into this document, IBM has also said it will no longer make special pricing available to its internal sales team if the deal in question has already been registered by a channel partner, and that it has created a decision tree process that walks IBM salespeople through exactly what types of accounts they can service directly and what types of accounts should be serviced through the channel. According to Lance Liden, IBM BPO for Competitive Programs, the decision tree is deliberately structured in a way that requires the IBM salesperson to push the vast majority of the sales opportunities through the channel.

Of course, this being IBM, it will take a while to push these cultural changes through the whole company. The Principles of Engagement document in the immediate future only applies to xSeries server sales. But over time IBM expects to implement the concept across the company's entire line of products.

In the meantime, IBM is also trying to make its channel conflict resolution process more transparent under the Principles of Engagement. If there is an issue, the vice president of channels for a specific region is the first point of contact. If he or she can't resolve it, the issue then flows up to what IBM calls a "Four in a Box" meeting where a vice president of channels, the vice president of client sales and two vice presidents representing the product brands affected attempt to resolve the problem. If they can't resolve it, then one final appeal can be made to the overall IBM channel chief and the vice president and general manager of the appropriate IBM group.

The whole Principles of Engagement effort is part of a deliberate attempt to improve IBM's reputation in the channel as part of an overall "Move to Blue" campaign. It's unclear how many solution providers don't trust IBM when it comes to sales or just find IBM too difficult to work with. We've all heard our share of horror stories over the years.

But one thing that is certain is that the company is trying. And when things go wrong, it's a lot easier to forgive people when they are seen to be trying, versus dealing with somebody who doesn't seem to care at all.

This article was originally published on 2008-08-15