HP explains thinking behind channel restructuring

Puts power into the hands of business divisions after closing SPO unit

Tags: Hewlett-Packard CompanyPartnerUnited Arab Emirates
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HP explains thinking behind channel restructuring Fawwaz Qadan says the restructuring of HP’s channel organisation reflects the push for specialisation among partners.
By  Andrew Seymour Published  November 19, 2009

Hewlett-Packard has revealed that a "move towards specialisation" lies behind the decision to dissolve its Solutions Partner Organisation (SPO) and shift channel responsibility into the hands of its individual business units.

From this month, all sales, business development and marketing activities that were formerly handled by SPO have been folded into HP's PSG, IPG and Enterprise Business units.

The restructuring, which has taken place on an EMEA-wide level, comes after an internal review of its operations concluded that the existing channel set-up no longer supported the direction of the market.

"You become less efficient if you try to run specialised programmes through an organisation that does it on behalf of so many other specialised organisations," explained Fawwaz Qadan, enterprise storage, servers and networking manager at HP Middle East.

"In the interests of quicker decision-making, quicker turnaround times and closer alignment between each of the market segments and the market segments that our partners play in, we decided to make this move and we expect it to have a very positive impact on our relationship with our partners," he said.

HP believes it will be better placed to address the unique requirements of resellers when it comes to things such as deal management, as the business functions that were formerly handled by SPO are now "embedded" in the different divisions.  

A new channel unit - dubbed the PSG Channel Sales Organisation - has risen up in place of SPO, but will simply operate as a vehicle to take ownership of centralised functions, such as PartnerONE, the Preferred Partner Programme and Smart Portal tools.  

The unit contains the term ‘PSG' in its title as it is "hosted" by HP's Personal Systems Group in the same way that SPO was. PSG is managed by Anil Kumar in the Middle East and this move reinforces his position as one of HP's main channel executives in the region.

Qadan denied the restructuring was an attempt to reduce costs, pointing out that business development managers and sales specialists that worked for SPO are now aligned more closely with the business units they represented under the previous set-up.

"The market is becoming increasingly competitive and we have to compete on every deal in every segment. What we are trying to do is align a more proactive posture to be more effective where it matters most - in front of the customer. But this is not a cost-cutting exercise," he stressed.

One Middle East partner suggested resellers specialising in more than one HP product category could view the prospect of having to deal with multiple sales managers as a burden, but was generally positive about the overhaul, pointing out that it was a return to the set-up in place before SPO was created.  

"It was becoming very difficult to manage the individual businesses and sub-contracting it to a third party business unit was no longer practical given the market circumstances," said the partner. "This new realignment seems to give each business unit the power to push for their own destiny and get maximum mileage from the opportunities available in the market."

Qadan says the continued centralisation of partner programme activities means resellers carrying multiple products will still enjoy a consistent interface with HP, but with the addition of specialised know-how that the new arrangement will bring them.

And while he accepts deteriorating market conditions this year may also have influenced the restructuring, he remains adamant that the bigger picture is much more significant.

"There is a very strong movement towards specialisation if you look at the resources that our partners are working with inside their own organisations," reasoned Qadan. "We are jointly investing in this to make sure that there are specialised resources in front of the customer because they want to deal with [a partner] that has access to the right information and can make quick decisions."

By extending greater autonomy to the individual business units, it appears likely that there will no longer be one individual that is regarded as the ‘face' of the HP channel, such as Bernhard Isemann, the previous SPO Middle East chief, or before him, Salim Ziade. Isemann has taken up a new role inside HP, driving the vendor's enterprise printing business.

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