August 2, 2002

By Amy Glynn Hornick, News@Cisco

With more than 85-percent of Cisco's annual revenue going through channel partners, a channel engagement model that drives mutual profitability is imperative. In an effort to help channel partners increase profitability, Cisco introduced a new Value Engagement Model at this year's Partner Summit.

News@Cisco recently had the opportunity to sit down with Paul Mountford, vice president of Cisco's Worldwide Channels Organization to talk about Cisco's global channel strategy to help drive partner profitability and increase customer value.

What is the Value Engagement Model?
The Value Engagement Model is a critical worldwide channels initiative, designed to ensure we engage the right partner with the right skills at the right time in the sales cycle to generate mutual customer success for both Cisco and our channel partners, at the same time driving incremental customer satisfaction.

There are four components to the value engagement model. First, organizational development provides Cisco channel account managers with the necessary training to help them become business advisors to their channel partners. The second component, individual partner planning, provides channel partners with market opportunity data from both the technology and vertical perspective for a specific region to help them make intelligent decisions about how to evolve their businesses. Third, regional planning by the Cisco enterprise sales organization and channels team identifies channel partner strengths, including specialized skills, services capabilities, geographical coverage and vertical market knowledge, to effectively match partners with the customer's business needs. And the final component, channel partner engagement, which means engaging the appropriate channel partner early on in the sales process is critical to enabling channel partners to compete on value as opposed to price and safe guard their profitability.

Why is Cisco changing its engagement model?
Cisco is changing from a point product sales engagement model to a more solutions oriented strategy to establish more long term, profitable relationships with its channel partners and customers. Two years ago, we were focused on price and availability. Today, we are focusing on developing best business practices, increasing ROI and productivity, building new revenue and advancing the ability of our channel partners to offer specialized services and solutions in their areas of core competency.

The Value Engagement Model elevates channel partners from their status as vendors and resellers to business managers who are in tune with the marketplace, making them strong and capable partners for Cisco-and indispensable customer allies. Engaging the right channel partners with the right knowledge and skills at the right time in the sales process will improve the customer's overall experience with both Cisco and our channel partners. It's clear that early partner engagement and committed partner involvement is required for today's solution-based selling model.

Additionally, this shift in planning and strategy will help Cisco and its channel partners capitalize on the $35 billion network consulting, services and support market of which Cisco currently has less than 10 percent.

What are the benefits of the new model for partners and Cisco?
For our channel partners, it's about being able to compete on their value add -- specialized technical knowledge, service capabilities, geographical coverage and vertical market knowledge -- rather than price. Early engagement provides them with the opportunity to make services part of every deal and deliver true value to the customer through an intimate knowledge of their business.

For Cisco, customer satisfaction is our top priority, so the benefit of implementing a structured process that ensures optimal channel partner engagement results in more efficient solution deployment and satisfied customers.

How does the new model benefit the customer?
The new Value Engagement Model enables customers to select channel partners based on their specialized technical skills, services provided, geographical coverage and vertical market knowledge, resulting in the ability to make a more educated partnering decision, which in turn allows Cisco and its channel partners to more efficiently address the customer's business needs and return on investment.

Amy Glynn Hornick is a freelance writer based in San Francisco, CA.