HP, partners sort through rebate issues

Hewlett-Packard (HP) and its solution providers are working through rebate shortfall issues in advance of the vendor's annual partner conference.

Two weeks before the annual Hewlett-Packard (HP) partner conference, solution providers are still sorting through big HP rebate issues that are impacting their bottom lines.

At issue is the fact that the HP sales numbers that VARs tally often don't jibe with HP's own numbers. The result is often a rebate shortfall (or occasionally overage), partners say. That means cash-strapped partners aren't getting back all the money they should.

That discrepancy over HP rebates typically hovers around $700,000 for Decisive Business Systems Inc. (DBS), a Pennsauken, N.J., HP partner. Pete Busam, chief operating officer, attributes this to reporting issues that he and the vendor are working to rectify.

DBS is too small to do direct "retail sales out" or RSO reporting to the vendor so it relies on its distributors for that and is now trying to work with those distributors and the vendors to remedy the issue. The mismatched numbers can be a big problem especially for smaller partners. "If RSO isn't right, it affects us directly," Busam said. "We've been working on it with HP; they've taken note. They'll do their due diligence."

Tom Senecal, president of Laser's Resource Inc., an HP imaging and print services management company in Grand Rapids, Mich., has not been overly affected but said that the sheer number and variety of HP partner types and products results in a complex set of transactions that can be hard to track.

"HP used to have RSO relationships only with its biggest partner -- large resellers that would exchange information via EDI [electronic data interchange]. Last year they brought that down a notch to more partners," Senecal said.

Smaller partners cannot always afford to implement and support EDI systems and instead upload/download Excel spreadsheets with their sales data.

"If you, as a partner, are within some set of criteria, your data just blows through the system fine. Otherwise a live human gets involved," Senecal said.

Making HP rebates right

Tom LaRocca, vice president of partner development and programs for HP, seconds the notion that HP's size and scope contribute to the problem.

The solution-focused rebate program had been available only to the top 300 or 400 Platinum and Gold partners until this last AttachPlus iteration, he said. Now, more than twice that number of partners is eligible -- some of whom use a direct EDI feed and some of whom use spreadsheets. Some report quarterly, some monthly, some daily.

In addition, HP is still converging diverse back-end systems left over from a series of billion-dollar acquisitions -- of Compaq by HP and before that of Digital Equipment by Compaq. "We're trying to get to one ERP program [with] a three-year effort we announced two years ago," LaRocca told SearchITChannel.com.

"We're getting better all the time in delivering more accurate information, but we're not where we need to be," he added.

He agreed with partner input that HP can be hard to deal with. Sometimes the vendor is buffeted by contradictory complaints from the same partners. Several HP partners complained of email overload from the vendor while also griping that they must have the most up-to-date information from the company.

LaRocca said the vendor will simplify partner relationships. For one thing, at the conference, it will talk about combining some Web sites.

Partners who come to HP with a new business opportunity have to log into one Web site to register that, then to another site to get special pricing. "Usually if you're in a new opportunity, you're taking out a competitor [in that account] and probably need special pricing," he said. "So we will combine those two Web sites and make that process easier to navigate. You will enter once, not twice, and will deal with one team inside of HP. That will cut turnaround time."

The HP Americas Partners Conference (APC) kicks off Feb. 25 in Las Vegas.

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