Victor -
I think we'll need to see how this rolls out, but it looks like Rosen and team are working to simplify both the message and the substance of the indirect sales model. In some of his comments at the shareholders' meeting, Doyle had said that one advantage of an "office of the CEO" would be to allow both an inward focus and an outward focus. He said it is almost impossible for one person to do both effectively, and said that one of the strengths of the office of the CFEO at GE was allowing that kind of division of energy.
From the scuttlebutt I have been hearing, Rosen has focused on field operations, particularly North America and the channel, as the key problem to be solved quickly. We have seen already a flattening of the organization, and now a dramatic simplification of the actual channel logistics. He had also hit on excessive bureaucracy with the related confusion over who could make decisions, resulting in no decisions. Looks like that is changing also.
The channel has been a huge asset for CPQ over the years, but the programs which resulted in slower response to market conditions, the growing burden of contra-revenue, and the need to tightly manage programs and inventory all pointed to a smaller number of closely connected channel partners. This is the kind of thinking CPQ needs to do, rather than the silly attempts to emulate DELL, which is after all in a different business, or at least one in which CPQ is only peripherally involved. Like DELL, CPQ needs to play to the strengths of its existing business model and relationships. For CPQ to try and do a DELL-like direct model is as fruitless as it would be for DELL to develop a big channel program.
This initiative is, I think, the beginning of a new kind of "virtual corporation" where the channel becomes almost a part of CPQ. It requires close executive contact and a relationship based on trust and communication, something which was lacking in the later days of the Pfeiffer regime. |
