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© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 1
Aimee Fuller and Mark Bonfoey
Distributor Update
Cisco LSS/CE Brazil
April 2013
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 2 © 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 2
Continued Engagement – Gaining your Insights
Discussion
New Cisco in Brazil
Cisco Confidential © 2010 Cisco and/or its affiliates. All rights reserved. 3
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 4
Our goal is to:
• Inform you of changes and gain feedback, ideas and support
• Determine impacts and/or potential updates to scope, processes, timeline
• Create scalable and meaningful pre- and post go-live support
• Ultimately shape and support mutual business expansion and success
• Discuss expanded approach (including automation) plus added product set
• Executive Distributor/Partner Forums
• 1-on-1
• Quarterly Updates
How We Achieve Our Goals
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 5
Enable
• Contracts
• Processes
• Pre- & Post Enablement Support
• Follow-up
Gain Insight
• Assess Impacts
• Business Processes
• Gather Feedback
Engage
• Benefits of Country Enablement
• Inform, Listen, Adjust, Educate, Execute and Support
PARTNER & DISTRIBUTOR
CONFIDENCE
Minimum Disruption
Coordinated Planning
Timely Communication
BUSINESS CONTINUITY
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 6
Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-13
Pa
rtn
er
& D
istr
ibu
tor
En
ga
ge
me
nt
Sw
itc
he
s
Brazil on LSS Bundle 1
Awareness Communication
and Invitations for Executive
Sessions
Exec Sessions and Partner/Disti
1:1s
Partner/Disti Survey
Executive Update
Go-Live Prep Communication
Go Live Update
Optional Training
FAQs
Partner/Disti Summit
Gain Insight Engage
Enable
WS-C2960S-48LPS-BR
(October 14th)
WS-C2960-24TC-BR
(June 17th)
WS-C2960-24PC-BR
(August 19th)
Communication Meeting
Partner/Disti Handbook
Partner/Disti Confidence Survey
Executive Update
Ongoing 1:1s
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 7
Why We Are Doing This
• Creating a future buy/sell entity
• Creating full local subsidiary capabilities
• Increasing local manufacturing for more competitive pricing
Potential Challenge
• Interim – parallel ordering requirements
• Additional training requirements
Benefits to Customers, Partners and Distributors
• New business models
• Increased satisfaction levels and ease of doing business
• Reduced cycle times
Cisco Confidential © 2010 Cisco and/or its affiliates. All rights reserved. 8
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 9
Local
Mfg
Intellectual
Property
Agreements
Innovation
Center
With World Cup And Olympics, Cisco Bets Big On Brazil - Forbes So urce: forbes.com
Image via Cisco Cisco is betting big on Brazil. With the 2014
World Cup and the 2016 Olympic Summer Games coming to Brazil, US-based Cisco is investing $545 million over the next
four years. According to one report, Cisco plans to capitalize on the global attention on the world soccer championships and
the [...]
Cisco Investment Package
Announced: April, 2012
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 10
Transforming the order to fulfillment processes and
systems by:
• Protecting and growing your market share
• Improving Ease of Doing Business for you and your
customers • Enhance “no touch” customer experience
• Increasing efficiencies • Speed acquisition integration
• Improve reporting functionality
• Accelerating time to market
• Providing greater scalability
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 11
Enhanced
Route to
Market
for
Channels
in Brazil: LSS Bundle 1/
Country
Enablement
Strategic Manufacturing Node
Routers &
Switches,
WAP UCS
IP
Phones STB /
EMTA
Improved lead
times
For local Mfg
products
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 12
• Product +TS for locally mfg products
• Stand-alone TS local and imported products
• Advance Services (AS-S, AS-T, AS-F)
• Service Sales to support SW
• XaaS (Increased automation – TBD)
Legal Contracts,
BRL Pricing
T&C’s, Customer
PO, SO
Cisco
Brazil
Selling only Product locally in country
-50% of all Cisco products
Locally
Manufactured
Product
• Product +TS for imported products
• Standalone Software Sales (SW)
• SW Subscription Sales **
Legal Contracts,
USD Pricing
T&C’s, Customer
PO, SO
Channels continues to import from Inc and resell to
customers for all products not manufactured in
country Non-locally
manufactured
Product
Cisco
Inc
subsidiary
Order
(Manually
split)
** SW Subscription doesn’t have separate service SKUs (i.e. there are not separate services sold to support software subscription sales).
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 13
Both locally and
non-locally
manufactured
products
Selling both Product manufactured
locally in country as well as those
imported from out of country
Order
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 14
1-Tier
Partner
End user
INC.
1-Tier
Partner
End user
CE Brazil
Distributor
As-is with Importation
As-is Local Manufacturing Manual
R$
$
R$ R$
To-be with Importation (no change)
To-be Local Manufacturing Automated
1-Tier
Partner
End user
INC.
$
End user
CE Brazil Type
5 Entity*
R$
*CISCO COMÉRCIO E SERVIÇOS DE HARDWARE
E SOFTWARE DO BRASIL LTDA
Services attached
to standard Cisco
products will
continue to be
purchased through
Cisco Inc
Ability to purchase
through the local
entity:
• Products
purchased thru
Distribution or 1-
tier
• Locally
manufactured
products and
attached
services
• Both local and
non-local stand-
alone services
1-Tier
Partner
$
R$
$
Cisco Confidential © 2010 Cisco and/or its affiliates. All rights reserved. 15
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 16
Minimize Disruption
• Specific to q2 changes next year (1 Tier purchasing opens up), how can we minimize the disruption or address concerns?
Coordinated planning
• For the new products in the portfolio & the expanded route to market, what elements do we need to pay particular attention to?
• What is your overall impression of collaborative planning?
• What could we do together to accelerate and address any concerns?
Communication, Training & Overall Readiness
• Where do you need added support in these areas?
• What is the single biggest inhibitor to ensuring your readiness and how can we help mitigate any concern?
What is your overall confidence?
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 17
• What would be the preferred process for creating deals, quotes, and
submitting orders given the dual approach?
• What are the impacts to your internal systems/processes to break up the
placement of orders based on Brazil Price List vs.. Global Price List? This
would include quoting, ordering and invoicing.
• As orders will now have both US$ and Brazilian Reais, what challenges will
this create for you in quoting to end customers? What other challenges will
this create? What support would you expect from Cisco to resolve these
challenges?
• What could we do to improve the process for you?
• Will this model impact your willingness to do business with Cisco?
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 18
• Does the need to have a Bill To address in Brazil create challenges to your
existing business?
• Any unique Global deal impacts?
• What challenges created by potential lead times differences as well as stock
locations from Cisco Inc vs.. Cisco Brazil?
• What support do you expect from Cisco to minimize this impact?
• How can we ease the process of signing the sales agreement with Cisco
Brazil for you? What kind of support / documentation will you need and how
much lead time would you expect?
• What would you require to support an electronic “click to accept” of a new
Internet Commerce Agreement? (or legal agreement)?
• Any other issues or concerns about this new model on your ability to sell and
deliver product to your end customers?
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 19
• What challenges do you expect for your business because of the
need to have contracts with both entities and how can we support
you?
• Do the Service contract start dates match the Purchase Order
submission dates? Are the invoices being sent in the same calendar
month as the service contract start dates?
• What process is used by the Partners for receiving returns from their
customers in Brazil?
• Service contract splitting. Service contracts with sites in Brazil and
outside of Brazil will need to be split going forward (This will mean
more service contracts).
• Any other issues or concerns about this new model on your ability to
sell and deliver Services?
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 20
• What are the implications to your B2B ordering processes?
• Will you need this capability Day 1 for purchases through CE Brazil ?
• Do you foresee any additional integration / migration work we have to
prepare for on B2B? What lead times should we plan for?
• What are your lead times needed to make the changes and what constraints
will this model create for your tools?
• Are there any issues around signing new ICA agreements, do you require
any advance information outside of the actual new agreement 60 days prior
to go live?
• Are there any communications templates/materials that would be beneficial
from us to support the change experience/expectations to your customers
with this dual model?
• Any other issues, concerns or opportunities for this new model on your
ability to sell we should be aware in relation to B2B?
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 21
Review 1-Tier Questions
Q. Will Partners have a secondary credit line for local manufactured products? If not, how do we control it considering that today confusion persists when placing orders with different credit lines.
A. 1-Tier Partners will maintain their credit line as is with Cisco Inc. for purchases through Cisco Inc. Purchase of locally manufactured goods will be through the local Distributors. Credit lines with the Distributors will be dependent upon the agreement between the 1-Tier Partner and the Distributor, as is done today.
Q. If it is through Distribution, who will provide credit lines? What interest rates should we expect?
A. Credit lines and interest rates provided through the local Distributors, will be dependent upon the agreement between the 1-Tier Partner and the Distributor.
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 22
Q. Cisco informs that the lead time for locally manufactured goods will be three weeks -will this lead time be guaranteed for high volume sales? Are there specific steps required for high volume orders?
A. In order to take advantage of the shorter lead time for high volume orders, the Cisco Sales Team will meet monthly with each Distributor to effectively plan the forecast.
Q. Does the Partner have to have two discount approval paths?
A. Yes. Locally manufactured and Cisco Inc. products will be addressed as separate opportunities. There will be one deal for Cisco Inc. products, and one deal for locally manufactured products.
Review 1-Tier Questions cont.
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 23
Q. What will be the RMA process for locally manufactured goods? Through the Distributor?
A. All early life hardware failures will be supported by the Distributor. The Distributor will accept the defective unit back from the end user and will provide the end user a credit or replacement unit (out of the Distributor inventory), dependent on the terms of sale.
Q. Why is Cisco manufacturing in Sao Paulo and not in places with a more attractive tax incentive?
A. Cisco follows a robust process in selecting a manufacturer and their respective location(s) of operation. Evaluation was conducted across a number of dimensions including quality, price, proximity to customers, etc. For the respective products the selection of Sao Paolo offers the best balance of all dimensions, for Partners, Customers, and Cisco.
Review 1-Tier Questions cont.
Thank you.
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 25
• # Discuss with Internal /
Partner / Both Question
1 Both Dual ordering model for solution selling. What would be the preferred process for creating deals, quotes,
and submitting orders given that part will need to go through Cisco Systems, Inc. and the other part
through CE Brazil?
2 Both B2B ordering. Will this capability be needed Day 1 for purchases through CE Brazil (this covers the
Locally Manufactured Product and Services that will be sold through CE Brazil)?
3 Both Will Boleto be used? How often?
4 Both For things like Service Upgrades, what is the preferred method of settlement? E.g. netting? What would
that look like from your perspective?
5 Partner How are Partners working with their customers in Brazil for Service Contracts? Do the Service contract
start dates match the Purchase Order submission dates? Are the invoices being sent in the same
calendar month as the service contract start dates?
6 Partner What process is used by the Partners for receiving returns from their customers in Brazil with respect to
Nota Fiscals and booking the returns, e.g. is a Return Nota Fiscal received and then the return order is
booked?
7 Internal (Non-Sales) Data migration requirements – e.g. ask them what they view is required when data is migrated from the
Deloitte platform to the Cisco platform, e.g. historical order data.
8 Internal (Sales) (Potentially
sensitive topic!) Is CSPP a must-have program for Services through CE Brazil? What is the impact if it’s not available Day
1?
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 26
• # Discuss with Internal /
Partner / Both Impact
1 Both A Bill To address in Brazil is a requirement to do business with CE Brazil.
2 Both Service contact splitting. Service contracts with sites in Brazil and outside of Brazil will need to be
split going forward (This will mean more service contracts). Cisco will need to engage customers
prior to go-live to manage this split.
3 Both Service Contract Renewals. For the foreseeable future, all TS contract renewals will need to be
done through CE Brazil for both TS contracts sold by Cisco Systems, Inc. and by CE Brazil. For
TS contracts initially sold through Cisco Systems, Inc., the renewals will need to follow the CE
Brazil process, which includes local currency, invoicing, and require a Brazil Bill To address.
4 Both Global deal impacts. Partners and Customers buying locally manufactured product and services
to be delivered in Brazil, they will need to have a local presence, i.e. Bill To address in Brazil, to
purchase from CE Brazil.
5 Both (Potentially
sensitive topic!) Distribution Channel Model. On Day 1, the model will be similar to how it is in the current local
manufacturing entity where the Brazil entity will only sell the locally manufactured product at a
local price in BRL. Specifically, there won’t be any stock rotations or 30-day price protection.
6 Internal (Maybe Both
with Wording change) Standard shipment level will only be offered as that is how the local pricing is built. There will be
no express shipment level. 1-Tier and Direct are Opt-In. 2-tier is Opt-Out.
Side Note For Presenter If asked about the need to have local presence for the 2-tier model (meaning any requirement to
have the Distributor, Reseller and End Customer all with local presence in Brazil), defer the
question to say we are working through it and will get back on the question at a later time.
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 27
• What are the impacts to your internal systems/processes to break up the placement of orders based on Brazil Price List vs.. Global Price List? This would include quoting, ordering and invoicing.
Legal and Commerce Agreements
• How can we ease the process of signing the sales agreement with Cisco Brazil for you? What kind of support / documentation will you need and how much lead time should we plan for?
• Under what conditions will you support an electronic “click to accept” of a new Internet Commerce Agreement? (or legal agreement)?
Quoting, Deal Approval, Ordering
• How do you prepare to quote your end customers when you do part of an opportunity in US-$s and part in Brazilian Reais (if that is the case)? Any considerations we have to be aware of?
• How do you plan to deal with different lead times and potentially stock locations, tax, importation of products sourced from Cisco Inc vs.. Cisco Brazil?
• For partners with an existing Cisco B2B solution: Do you foresee any additional integration / migration work we have to prepare for on B2B? What lead times should we plan for?
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 28
Services
• You will have equipment under Service with Cisco Inc. and with Cisco Brazil. What challenges do you expect for your business because of this and how can we support you?
Other
• For B2B Partners, what are your expectations around notice timing and what constraints will you have?
• Are there any issues around signing new ICA agreements, do you require any advance information outside of the actual new agreement 60 days prior to go live?
• Are there any communications templates/materials you need to be able to support the change experience/expectations to your customers with this dual model?
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 29
Review 1-Tier Questions
Q. Will Partners have a secondary credit line for local manufactured products? If not, how do we control it considering that today confusion persists when placing orders with different credit lines.
A. 1-Tier Partners will maintain their credit line as is with Cisco Inc. for purchases through Cisco Inc. Purchase of locally manufactured goods will be through the local Distributors. Credit lines with the Distributors will be dependent upon the agreement between the 1-Tier Partner and the Distributor, as is done today.
Q. If it is through Distribution, who will provide credit lines? What interest rates should we expect?
A. Credit lines and interest rates provided through the local Distributors, will be dependent upon the agreement between the 1-Tier Partner and the Distributor.
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 30
Q. Cisco informs that the lead time for locally manufactured goods will be three weeks -will this lead time be guaranteed for high volume sales? Are there specific steps required for high volume orders?
A. In order to take advantage of the shorter lead time for high volume orders, the Cisco Sales Team will meet monthly with each Distributor to effectively plan the forecast.
Q. Does the Partner have to have two discount approval paths?
A. Yes. Locally manufactured and Cisco Inc. products will be addressed as separate opportunities. There will be one deal for Cisco Inc. products, and one deal for locally manufactured products.
Review 1-Tier Questions cont.
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 31
Q. What will be the RMA process for locally manufactured goods? Through the Distributor?
A. All early life hardware failures will be supported by the Distributor. The Distributor will accept the defective unit back from the end user and will provide the end user a credit or replacement unit (out of the Distributor inventory), dependent on the terms of sale.
Q. Why is Cisco manufacturing in Sao Paulo and not in places with a more attractive tax incentive?
A. Cisco follows a robust process in selecting a manufacturer and their respective location(s) of operation. Evaluation was conducted across a number of dimensions including quality, price, proximity to customers, etc. For the respective products the selection of Sao Paolo offers the best balance of all dimensions, for Partners, Customers, and Cisco.
Review 1-Tier Questions cont.
Cisco Confidential © 2010 Cisco and/or its affiliates. All rights reserved. 32
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 33
Lower Street Price
Lower VAT (non refundable)
Cisco Price
• List Price
• Average Discount
• Average Selling Price
Partner Price
• Importation + Logistics
• Partner Markup
Cisco Confidential © 2010 Cisco and/or its affiliates. All rights reserved. 34
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 35
1. Promon
2. Damovo
3. Ingram
4. Comstor
5. Officer
6. Multirede
7. Wittel
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 36
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 37
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 38
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 39
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 40
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 41
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 42
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