Becoming a Siveco “EPC type” partner
In 2008, Siveco China launched its Value Added Partner Program, better known as “VAPP”. The program has since achieved some success but lessons have been learnt to improve its performance. In January 2014, the Siveco management team established new guidelines for partners, summarized in this article.
Six years of VAPP have shown that the most successful long-term partnerships are, in this order:
– Partnership with EPC (Engineering Procurement and Construction) and related companies, which built plants and package Siveco solutions and services as part of their delivery to final customers. This type of partnership generates revenue for both companies.
– Technology partnerships, where Siveco solutions embed a partner’s technology or when both companies work side by side for a customer, integrating technologies and services. If this type of partnership brings value to customers and provides a “marketing advantage” to Siveco and partner, it however seldom generates additional revenue.
– Other partnerships are sales partnerships of either “reseller” or “introductory partner” model, which have almost always been one-off: after the first sale, no more business can be done. The most typical situation is when a partner has a business opportunity with an existing customer and brings Siveco in. It is however very difficult for such partners to proactively sell Siveco’s technologies and services elsewhere. Such deals are more than welcome, but should be recognized as one-off partnerships to avoid future disappointment.
Revenue-wise, for both Siveco and partners, the “EPC model” has proven the best model, but not every potential partner is an EPC. What can we learn from this model, which we can apply to other partners? What are the main characteristics of EPC partnerships?
1- Partner is delivering a package of products and services to end-client, for example a manufacturing plant, a production line, a scope of engineering services etc. The package may include a CMMS and related services, either requested by the client (i.e. the client specified a CMMS to be part of the package) or proposed by the partner (the partner promoted the concept to the customer), perhaps as an option, with a clear value-added for the client.
2- The CMMS and related services value is typically small compared to total package value. As a result, the customer will not focus on lowering the CMMS cost and the partner will not focus too much on profit margin either, since the amount is small.
3- The CMMS scope of service provides a unique sales advantage to the partner, usually because competitors do not provide such service or lack a mature solution for the same scope.
4- Interaction between Siveco and customer is limited during the sales process, for the same reason (low value compared to total package). Usually, documents are exchanged during the sales process (technical proposal, commercial proposal, clarification documents), with perhaps 1 or 2 meetings in total. This lower cost of sales also helps raise partner margin (or reduce price for end-customer).
5- Business can be repeated, as partner’s main business is to deliver such packaged deals.
Overview of Siveco’s EPC partners
Does your company qualify as an “EPC model” partner?
The closer your business is to that of an EPC, the more likely we have a match. Successful partnerships in this model include of course EPC companies in various industries (power plants, process plants, infrastructures), but also related construction businesses such as engineering companies, project management companies, automation suppliers, major equipment suppliers (usually high-value equipment requiring complex maintenance), maintenance service companies. In some cases, large IT companies may also qualify, especially if they understand the industrial value-added Siveco can bring compared to traditional IT vendors. Feel free to contact us for a talk!
What if you do not qualify?
One-off sales partnerships are also very important for our business success and the success of our partners! Siveco China remains open – enthusiastic even – for one-off deals with all sorts of resellers. We also hope to sign a second, a third, a fourth deal… but we believe both parties should recognize their limitations: let’s work to make the first project together a success, make sure we are happy with it, then we see what comes next. No need to invest months in negotiations for a partnership agreement, technical training, complex revenue sharing schemes, JV discussions and what not. Let’s just focus on the deal. If you have a business opportunity on hand, feel free to contact us!
You can reach the Siveco China VAPP team at 4006-300-213 or email to vapp@sivecochina.com.
