Consider a few of the many complex scenarios encountered:
# Lock the account with a vendor, get the MAF for quotation but price is not received till the last day. When the final bid opens, there are multiple partners with more aggressive prices.
# Conducting demos and POCs, but another partner known well to the customer comes into the picture whem the vendor prefers.
# Unwillingly conducting time consuming tasks that are not part of SLA. The fear being non-release or delay in payment.
# Quoting a competitive price including services to a customer. Another unauthorized partner of the same vendor quotes a lesser price and walks away with the deal.
Such circumstances are jittery enough to increase anxiety and uncertainty about a particular deal in a partner’s mind. Partners have to exhibit intelligence, patience and determination to handle such situations without burning bridges.
ChannelWorld explores real-life stories of five solution providers who displayed proficiency and entrepreneurial skillfulness to sail through tight situations.
D M Systems : Client Delays; Partner Pays
D M Systems was successfully implementing the entire IT infrastructure (servers, laptops, desktops, etc) of HP at Cosmic Business School (CBS) located in Delhi since 2007. This included networking, firewall, anti virus and other IT services too. CBS was a key account as DM Systems headquartered in Delhi was rapidly increasing focus on educational institutes in and around the capital. A routine order of approximately 60 lakh rupees (comprising more than 90 percent were HP products) in 2009-10 at CBS suddenly hit a serious roadblock.
The CBS management indicated paucity of funds. “There was too much dillydallying from the customer end. We understand niggling payment issues can occur with loyal customers too,” recalls DK Bajaj, Director, DM Systems.
After few months, DM Systems was astonished as a new order (to the tune of Rs 35 lakh) at CBS was awarded to another channel partner. HP did not inform DM Systems about the new query and routed the order through this partner. Somehow, the order did not get executed and CBS management came back to DM Systems. “We executed that order as the payment for previous order was not delayed much till then,” recalls Bajaj.
However, numerous phone calls and regular visits went in vain for the previous payment. DM Systems continued warranty and post sales support (of last order) as per business ethics. After few months, D M Systems stopped doing business with CBS and finally lost the account as this kind of payment delays make hefty losses.
Vendor grabs opportunity
For another order, CBS neither contacted DM Systems nor new partner (who could not execute the previous order) but approached HP directly. The direct order with advance payment was executed by HP. “The vendor should have supported not to execute the new order of the customer unless they released our much delayed payment first for a previous order,” says Bajaj in a complaining tone. When Bajaj confronted CBS management about this change of supplier with each order, they gave an excuse of single party contact directly with the vendor.
“Because of immediate opportunity, vendor companies do not want to lose any business deal. In many large deals, if a partner does not have good credit value, the vendor brings in a new and bigger partner. Whether you are handling that account since years is immaterial,” Bajaj says.
There are customers in market who kind of take advantage of vendors. If their credit is not good, many customers look for new partners as this partner is not aware of payment issues till first few deals.
Customer support is extremely tough for systems integrator especially for delayed payments. It means an extra cost for us as customer’s next order might go to another partner through your vendor.
Payment was finally received from CBS after eight months of deployment of the Rs 60 lakh order. It’s been a year since DM Systems understandably does not deal with CBS anymore. That case was a direct loss of a loyal customer for us, though HP still continued their business with them, says Bajaj. DM Systems till date is still a strong HP partner in many enterprise deals. “It may just have been a one off case, but we think vendor should have been more transparent to us,” feels Bajaj.