Capacity Planning: Predictable Revenue Growth through Partners
The objective of partner Capacity Planning is to determine how company growth expectations can be fulfilled through partners. A prerequisite to this analysis is executive understanding that partners are a lever to scaling revenue and willingness to invest in the partner ecosystem to affect this scale.
In the prior Market Segmentation step, you document the solution areas and geographies in which you sell and take stock of your partner inventory (including loyalty level). Another important input to Capacity Planning is the revenue expectations per product/per geography as informed by prior growth, forecasted economic conditions, and your product release schedule.
While it is natural to assess partner strategy as part of the new fiscal year planning cycle, realize it takes time to make changes to partner coverage and spin up partner recruitment, so it is best to start the capacity planning modeling early and get the framework in place, so you can execute quickly once new fiscal year priorities are set.
Partner Capacity Planning
To develop an informed forecasting model, you’ll need to develop an average Partner Productivity Index for each level in your partner program (as well as those in “managed partner” tiers). For example: the average Gold Systems Integrator partner influences $40K/yr. for Product X.
Deriving partner productivity formulas requires introspection on historical partner productivity and thoughtful forecasting as part of individual partner account planning. If you haven’t developed a partner influenced revenue model before, you’ll find the effort helps focus your partner interactions on mutual selling objectives.
The Capacity Planning modeling effort helps you understand how company growth goals are supported by partner sales and service. The outcomes from this process include:
Identification of additional partner-driven revenue required to achieve growth expectations (per product per geography). This will inform at a macro level where you need to grow (and trim) existing partners and recruit net new partners.
Insight into partner capacity gaps (aka Partner Ecosystem Health Report), indicating where additional specific partner expertise is needed. For example, India may be a high growth opportunity with 50% growth expectations. Capacity modeling may indicate you need to attract 5 new entry-level partners, and grow 5 Silver level partners to Gold level to support this growth.
Determination of where to rebalance managed partner account management and marketing investments.
There is a cost to growing partner capacity: you should understand your fixed (e.g., partner portal) and variable (e.g., account management and support) costs. They are important ROI factors to consider in making partner ecosystem investment decisions.
Gap analysis (focusing on technology partners) and solution mapping (deriving go-to-market partner preference) are the next steps in the partner strategy process, which I’ll cover in upcoming posts.
Do internal executive stakeholders have common expectations about the revenue impact of partners? Where does partner capacity planning sit in your business planning cycle?
Do you have a partner capacity model in place? Is there an understanding of the incremental value and productivity of partners across different levels in your partner program?
How are your top markets served by partners today? Are there high growth markets where you should be recruiting additional partners? What expertise (industry segment, technical knowledge) would open up new markets for your products?