Avnet To Help VARs Grab More IBM Rebates

The tool, called the Quarterly Cash Connection, previously tracked IBM rebates and other promotional incentives but gave VARs a tally only after the quarter ended. The system will be enhanced by year's end to give VARs realtime rebate data, Avnet Partner Solutions executives said.

Solution providers attending the Avnet Partner Solutions Ignition '04 IBM partner conference in San Antonio welcomed the change. "The system helps me better manage my cash flow," said Ben Cherbonnier, president of CMA Technology Solutions, an IBM Business Partner in Baton Rouge, La. He said the distributor has integrated its accounting system with his and that, in turn, Avnet Partner Solutions has better integrated its system with IBM's. "That eliminates redundancies," he said.

Roger Arndt, vice president of product and consumer marketing at Avnet Partner Solutions' IBM Division, said the original system was "hard-wired," making it difficult to update rebate programs during the quarter as IBM made changes. "Every quarter IBM makes a modification to their [rebate] program and if they are not making their quarter, they put enhancements in the program," he said. "When we first rolled it out, we didn't realize there was going to be this volatility."

As a result, Avnet Partner Solutions had to rewrite program code each time IBM made a change, causing delays in reporting rebates to VARs, he said. "We told IBM that it's great to have a bonus out there. But if I put a bonus on iSeries sales that pays $50,000--but I don't know if I've hit it until the end of the quarter--it becomes a reward. If I can tell VARs how they are performing against their target during the quarter, it's an incentive."

Arndt said the old system was particularly vexing when VARs found out after the fact that they'd missed their bonus targets by a small margin.

The enhanced system, which will be rolled out by the end of the year and begin tracking rebates in the first quarter of 2005, relies on a modular, table-driven design. Arndt said that when IBM makes a change, Avnet Partner Solutions simply pops in a new variable to recalculate rebate status. The system will be updated at the end of each business day, he said.

In addition, the Quarterly Cash Connection calculates rebates on all IBM brands, giving solution providers a view of their rebate status across their entire IBM business. "VARs can't afford to miss their rebate targets because so much of the margin has moved to the back end of the transaction," he said.