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Vertiv's History and Future: Principal Associates' Role and Challenges

Explore the history of Principal Associates and their transition to a Vertiv-centric focus. Learn about the challenges and topics discussed, including freight, services, thermal service, commissions, solutions, parts, and global accounts.

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Vertiv's History and Future: Principal Associates' Role and Challenges

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  1. Welcome and Introductions Welcome • Jeff Sturgeon • Matt Kightlinger

  2. History of Principal Associates • Founded in 1981 by Bob Colmer (Memphis) and Fred Grasso (Omaha) • Delray is the 40thmeeting • Originally very business and organization structure centric • Successful salesmen with growing companies • Shared knowledge on corporate structure, salesmen compensation, salesmen expenses, employees insurance, benefits, hiring practices, etc. • As businesses matured, evolved to Liebert centric • Sales strategies for new products and changing markets • Best practices for account and territory coverage • Unfiltered feedback to Liebert executives from the front lines

  3. History of Principal Associates • Continues to be Vertiv centric with shift back to business centric • Service departments • Best practices for IT Solutions sales • Channel coverage and strategies

  4. Territory Covered by Principal Associates 38% of Vertiv Annual Sales

  5. Topics / Agenda • Freight • Service • Commissions • Solutions • Parts • GSM • Channel • Products • LVO Offices • Vertiv Future

  6. Freight

  7. Freight Freight Quality / Tracking • No centralized website to track shipments. • Pro Number when it ships is not the same Number to Deliver. System is rarely updated • Increase in freight damage and lost shipments

  8. Freight Freight Cost (Recognizing that Freight Industry Capacity Stressed) • Errors in freight calculation program. Are they being addressed ? • Minimizing Freight Damage • Examples have been sent in to Ron Bednar’s group • Invoices with PW calculation vs Pre-Pay and Add • Reducing from Four to Two Consolidation Depots Should Eliminate Delays • LVO to help control freight if prudent • Smart to compare past invoices: Rarely the same cost • Reducing from Four to Two Consolidation Depots could Eliminate Delays

  9. Liebert Services (Excluding Thermal Service)

  10. Liebert Services (Excluding Thermal Service) Vertiv Services • Multi-Year Contracts, Pass-Thru DOP’s • Execution of Multi-Year Contracts • Accepting Pass-Thru DOP’s as combined contract • HVM and ERS Plans • Vertiv Service Plans – loss of techs and their skills is killing us.  What is the plan? • Keep Thermal Service Separate until up and running

  11. Liebert Services (Excluding Thermal Service) Challenges • Scheduling and Systems • Tickets Open • Hurting Power Sales as Customers see our Struggles • Continue to Lose Techs • Trucks Lined Up with open reqs for Techs

  12. Thermal Service

  13. Thermal Service Documentation • LVOs are burdened with two extra layers of Service startup paperwork. • What would work best if we could have a system the sends startup information electronically from the jobsite to Liebert’s database. • That would eliminate the need for the paperwork to be recreated back at our office and manually entered into the service portal. • Would also create access able information • QR codes on units both Power and Air to link to PDF’s on-line

  14. Thermal Service Thermal Service Rework • Update (Chad and Pete have outline) Old way was: • For LVOs the Liebert training policies and cost for our technicians are a huge financial and time burden. This is becoming a larger issue. Recently I have been told my techs need to have the factory service training every 3 years, even though all they do is work on Liebert units and we do in house training. • There needs to be a different program for LVOs who specialize and do only Liebert service everyday – should not have to go to a class designed for a novice. Maybe an on line competency course with a test. • The More on-line courses for certification: the Better

  15. Commissions

  16. Commissions Power Commission Rates After trying to fix low Power commission rates by lowering list Prices: • Price increases • Commodity Price Increases • Competitors are more aggressive We are all focusing on Flow and Channel • Focus on flow and Channel • Channel does not fill the bucket for loss of big jobs • Many Areas do not have the ‘Mega Projects’ International Compensation • Multiple jobs, same results. I want to get input on where to take it.

  17. Commissions Commissions Explanation of New LVO Plan? This is the concern on the commissions and lack of large projects

  18. Solutions Group

  19. Solutions Group Solutions Group with Rob Pflegling • What is the plan?  • What are their obligations for engaging LVO’s. • Should they be the lead or LVO take lead to drive business?

  20. Parts

  21. Parts HVAC Parts Move to Atlanta • Where do we stand with new plan • .50 for all parts • P1, P3, P5 go away • Pay for Freight Overnight • Stock orders: Freight Included • Warranty Returns use P Program? • Freight quality has been better

  22. Global Accounts

  23. GSM • How many? • Vertiv Building a sales force to supplement LVO Sales or to Lead ? • Global Strategic Accounts Discussion • Role of the LVO in these accounts and compensation • In the sales process • Consulting engineering support • There seems to be a misconception that engineering is not required on GSM Accounts • Territory support • Installing contractor support • Commissioning support • Meetings and site coordination • Thermal service technicians on site • Warranty support • Parts • Labor

  24. National Accounts

  25. National Accounts • How many? • Do we have MPAs with these accounts

  26. Channel

  27. Channel • After Vertiv spent big bucks on the channel business why did the Channel business shrink? • House accounts: who are they and why? • No Stock factory stock for any channel Products • LVO can’t sell direct? • Power BI commissions are wrong and they took the AR invoice Colum away making it difficult to reconcile our account receivables • New CPQ tool will stop orders for weeks • No visibility to channel orders Projects with rep assigned • Geist in General   • Reporting from Distribution Lack of information can’t track orders • Channel Commission • Sales Out reports vs Vertiv Reports • Incredibly cumbersome • Power BI Reports almost impossible to match up to Vertiv Commission Checks • Validity of Commissions • Timeliness of payments

  28. Channel LVO Channel Sales • Now have many Channel sales people to support • Not Covering themselves • Pennies from heaven no covering it • Late to market with products • Call Center Update on people and calls • Channel salespeople hiring practices • Onboarding and training of new channel salespeople • Channel sales organizational structure • Handling conflict between “traditional” products salespeople and channel salespeople

  29. Channel Policy 119 Discussion • What worked / what didn’t work • Effect of not being able to sell direct or buy back from resellers • Channel Orders / Commissions • Commissions being paid at wrong rate due to issues with registrations not being applied correctly • Difficulty for LVOs to reconcile commissions • Inability to track orders through distribution and have insight into what has been ordered by our resellers and commissions owed • Can we please discuss Buy/Resell where it makes sense

  30. Channel • Just one Example: We are falling down on Edge Support. GXT, PDU’s and Software Firmware issues… (Disconnect between GXT product management, PAP Program administrators, Liebert services, and service Network) • Example: Sanofi, Meriel, Genzyme, GXT’s big problems… customer looking at first cost so they buy standard warranty GXT ship’s with firmware Issue, depot repair ship’s a new unit with same issue. We sell them new batch of units with PAP to prevent problem and the PAP service network make a bigger mess ….customer look to go back to APC looks the 500 location are going APC we can’t seem to get it together and support our own stuff

  31. Racks • Flat Pack vs Built • Are we trying to be “Me Too” or “Customized” • Channel Products Discussion • White racks – vast majority of colos requiring white racks • 52U racks – increase in colos wanting 52U+ racks • 1-phase with lithium ion batteries • Larger size MCR (delay in MCR2) • Availability of White Cabinets? – all the new colo data centers in CO & NM require white cabinets.  • EDGE Computing – Account ownership.  What interference can we expect from the Vertiv BD’s group? • Channel inventory plans • Channel program mechanics • Relationship plans with eco-system like Cisco, Dell & HP? • What value do the Business Development really bring to Vertiv?  They are relationship -based with no technical or application knowledge and not strategic thinkers. • AMCO for customization

  32. Channel Direction • Vertiv • Focus on Diamond Resellers • Invest in LVO’s Sales Personnel • Establish Columbus Call Center • Expand Product Portfolio • LVO • Expand Sales Capabilities • Focus on Diamond Resellers • Embrace the Columbus Call Center • Looking Forward to Geist • Experiences • Turning Over Account Control Has Been Hard – This is a Major Cultural Change • Some Resellers See Us as Competition • Net New Sales have Yet to Materialize • Resellers Register Projects – Contractors Don’t – We will Not Be Able To Duplicate the Relationship • Managing Market Confusion

  33. Channel Direction • Experiences • Two fundamental problems have hindered us: Ease-of-Business; Product Portfolio • Performance From Ingram with Resellers Needs Help – Faster & Accurate Responses; Better Teamplay • We All Have Bills To Pay – Patience with National Resellers – RWNBIAD • Morale • Prove Profitability to Resellers – It’s a Great Story - Continue To Tell It • Add More Bundled Solutions • We Need Visibility Into Our Partners Registered Projects • More Local Partner Marketing

  34. Products and Product Development

  35. Product Development and Refresh Cycles CURRENT METHODOLOGY NOT WORKING UTILIZING SFA PROCESS TO FIX DESIGN FLAWS CONCERN WITH ENGINEERING RESOURCES AND CHINA DEVELOPMENT OF PRODUCTS AND LEVEL OF NA INFLUENCE SALES OFFICES SPEND MOST OF THE TIME IN OFFICE TRYING TO APPLY THE PRODUCTS Power Single Phase UPS GXT- Good Product, Need Proper Configurations Lithium Ion in this Space- Where Are We? Three Phase UPS ITA2 Debacle Need for a 3Phase Unit With A Smaller Footprint- eXM Too Large (Retail), EXS on same platform with ITA2 need fix NX Large open transition ATS Multi-Core units not-redundant PDU’s Need refresh of this product line Footprint Waveform capture IR Scan Windows – SFA’s Thermal SRC/Small Systems: • SRC- 0° Ambient, wall mount only, no multi-evaps • Poor Strategy with slow roll small systems, high cost PDX: • 2-Row 5-ton CW Coil • Frameless- Can’t Pass OSHPOD • Right Side Access, Condensate Pump/ducting Issues XD: • 2003 Launch- Nothing Since • High Density – Water doors poor header design DS/CW: • Glycool Doesn’t Meet Code • Only competitor without R410A • EC Fans on Drycooler CRV • High price • Footprint increased capacity

  36. Products and Product Development • PDU’s, Mini-mates, other products that aren’t saleable – what are we investing for innovation? If we didn’t have the DSE, CW, DS, and iCom, what do we really have? • Quality of Thermal units is a concern.  Is it true day labors being used to assemble the equipment? • Thermal portfolio – chillers in or out? • QR Codes

  37. Products and Product Development • Order / Manufacturing Execution • Decrease in sales support – especially on electrical side • Technical assistance on large projects • Slow DOP process • Thermal – increase in missed ship dates with late notice • Electrical Products • Colo market is trending towards larger UPS capacity • Large scalable UPS – every other large YPS manufacturer has one • Larger capacity static switches

  38. Product Development and Refresh Cycles Is this a direction ?

  39. Products and Product Development • Monitoring Portfolio Roadmap?

  40. LVO Business Office

  41. LVO Business Challenges • Timely commission, service work and warranty return payment • Your expectations of the roles ‘Product Offering Managers’ and ‘Territory Business Manager’ • We have different contracts that exist with LBP’s. It seems to me that this would be timely to discuss 2-3 year contracts. • (Trip Moore) – With the uncertainty around NewCo / SpinCo (even more with the news about Siemens and venture capitalists), all the LBPs have remained loyal and have not looked to change to other manufacturers, but it makes it difficult to invest for the future not knowing the LBPs future if some 3rd party buys ENP. • It may be selfish, but our loyalty should be rewarded with a longer term contract to provide us stability and allow us to invest in our businesses. I doubt longer contracts would have any negative ramifications in the negotiations of a sell – just be good for the LBPs.

  42. LVO Business Office The Role and Value of the LVO (LBP) • How We Want to Work Together • Website Presence • Onboarding New Vertiv Associates • A Sample Channel Growth vs Quota and Dollars • Ridiculous to think we can make total quota numbers (Or even sustainable business and revenue to survive) selling and growing channel business at ~5% YoY

  43. LVO Business Challenges Market Confusion • Avocent Sales Managers making direct sales calls on our end-users we confuse our customers. • IT end-users have to know the difference between an Avocent Regional Manager, a ENP Local Business partner and an ENP VAR. • No longer buying the argument we need them to drive our Channel product business. • We need to work together and organize our efforts. We’ve talked about this topic before, but it seems to me customers would like to be able to buy directly from their LPB and not go thru a third party.

  44. Future for Vertiv What is the Vision for Next Stage of the Vertiv Corporate Entity and Plans for Growth?

  45. Future for Vertiv Vertiv – IPO or Sale? • How do we direct the conversation at this meeting with the recent news of Siemens and other companies looking to purchase ENP? Do we get any clear direction for the LBP. • Rob Johnson & John Hewitt’s plan post-whatever transaction happens? Regaining the market share that we have lost? • Now that we will be released from the stranglehold of corporate Emerson, how will our new structure be better able to embrace our market in order to recapture the interest of those customers we have lost? Function of the Territory Manger • CRM Manager? • Power BI Instructor?

  46. Future for Vertiv Growth Idea #1 • Master All The Purchasing Contracts • Compliance Support • Support our IoT Business Pursuit • Increase Solution Opportunities • Increase Turnkey Opportunities • Most Channel-Focused Sales Managers Have Fundamental Understanding Already

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