How to maintain your growth as a Microsoft CRM Partner. qbsgroup.com

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1 How to maintain your growth as a Microsoft CRM Partner. DIVIDE TASKS, DOUBLE SUCCESS!

2 How to make money as a Microsoft Dynamics CRM Partner in 5 years from now? It s great to be a Microsoft Dynamics CRM partner these days! Dynamics CRM is hot. And the market is growing double-digit. Leads are easy to get since we live in a customer centric world. And every organisation on the planet needs innovative tools to manage their relationships. It s no wonder capacity is everybody s number one challenge! But have you ever wondered if the world will always be like this? And if you are expecting some changes - what do today to be prepared for the more saturated market of tomorrow? The good news is that you can learn from the experiences of ERP resellers over the last years. The ERP market shifted from a long period of double-digit growth to a more saturated market with limited or even no organic growth at all. To demonstrate how we can learn, I will use some slides of a presentation that I delivered on this topic at the extreme CRM EMEA event.

3 Many years ago, ERP resellers including Dynamics ERP partners experienced great market conditions. They enjoyed double-digit growth and their main concern was finding enough implementation capacity to satisfy the huge demand. A large majority of ERP resellers didn t fully consider or prepare for the decelerated market conditions. And some of them still regret this choice! Here are our Top-10 challenges for today s ERP partners, where Dynamics CRM partners can learn from. Now let s take a closer look at each individual challenge. 1) Pressure on services revenue Most of today s buyers have learned their lessons. They prefer standardised solutions, tailored for a specific niche or micro-vertical market as that offers lower risk, smaller investment and shorter time to value. Many ERP partners however, persist in offering largely customised solutions, delivered based on 1-to-1 services. The result of that is pressure on services revenue and poor utilisation.

4 2) Low score ratios Traditionally, just like CRM partners, ERP partners had a wide focus on markets and opportunities. But as solutions both standardise and commoditise, the magic word for winning deals is specialisation. Potential customers can buy software licenses almost everywhere. Yet, they re looking for partners who are relevant for their businesses! Today, many ERP partners are not specialised and/or relevant enough. As a result, they lose big money and big parts of their scarce capacity in inefficient pre-sales projects and collecting silver medals. 3) Biggest competitor is No Decision The third challenge is No Decision. At the end of their selection process, many prospective customers decide to do nothing. And ask there favourite vendors to come back in two years time. The reason? These companies simply perceive the risk of implementing a new solution as too high! 4) Poor marketing Marketing in the partner channel is widely perceived as more of a cost rather than as an investment. And many business owners still try to make savings on their marketing spending. However, in today s digital world, customers have the power. So without memorable marketing impressions (think website, positioning and messages), your potential customers will not be able to find you. And if they do, they will be turning their backs. 5) Veteran owners Many of today s ERP owners started their businesses in the nighties when they were in their mid-thirty to early forty years old. Twenty somewhat years later we can observe that most of them are aged in the 55 to 60+ years range. They have built their companies based on their familiar success formula. The question now is are these owners both willing and mentally able to change their mindset to create a new type of company that lead to success in a Cloud First, Mobile First world? 6) Customer bases with outdated versions Due to a lack of specialisation and an unstoppable addiction for services revenue, many ERP partners see themselves confronted with a large customer base that work on outdated versions. This results in poor customer satisfaction (think quality of support!) and limited revenue streams. Even worse it opens the doors for these customer to easily switch to another partner. Or even another solution. 7) Love to do Projects! Market demand is moving away from complex, expensive and long-lasting ERP projects towards a more product-based approach. One with a focus on standardisation of (micro-) vertical solutions, subscription priced and offered with low risk for the buyer. Much of the ERP partners however, still love to do projects. Over time, this of course leads to a serious mismatch.

5 8) Struggle to transform to recurring revenue model The story is clear. Customers increasingly choose product based solutions with subscription based pricing. Without spending their scarce working capital in owning something trivial as an ERP software license. So, any ERP partner would do well in switching gears towards a business model based on a recurring revenue model. However, many still have difficulties seeing the wood from the trees. 9) Profitability under pressure Many ERP partners have failed to respond effectively on all the market changes when the overall ERP market growth decreased. As a result, their profitability is under pressure. Without a realistic prospect of improvement. 10) Declining company value The previous 9 points result in a declining company value. Today, the value of an implementation company is determined by the share of recurring revenue in the total revenue, besides other aspects like profit, the possession of certified IP, the market focus and the sales and delivery effectiveness.

6 About QBS group Quattro Business Solutions (QBS group) is Value Add SMB Distributor for Microsoft Dynamics. The world has changed! From a sellers market in the early 00 s to a buyers market today, where buyers travel the biggest part of their buying journey online. From a sales to a marketing focused approach, with heavy competition and a growing demand for standard cloud based solutions. To support Dynamics Partners with these huge changes, Microsoft appointed QBS group as her partner to support and guide Dynamics Partners with all the necessary strategic and operational changes. We have started our journey (as Dynamics Master VAR) in early 2013 and currently support close to 400 partners Resellers and ISV s - in 17 countries. Recent information from Microsoft shows that on average QBS partners outperform non-qbs partners, underlining the success of the strategy. We support our partners with services aimed at achieving growth in revenue and reduction in costs. www. Need some help? At QBS group, our goal is to help Microsoft partners to become more successful. So just let us know if we can help you in one or more of the challenges mentioned above. You can do that via info@. QBS group April 2017 DIVIDE TASKS, DOUBLE SUCCESS! Wesley Vonk Business Software Consultant Direct: wvonk@