Driving Multi-Channel Revenues by Using PRM

Partner Relationship Management
Kapi Attawar
OnDemand
Driving Multi-Channel Revenues
by Using PRM Technologies
http://attawar.CRMproject.com
PRM, a key area of differentiation for vendors, is a rapidly growing
market with good, robust solutions available from industry leaders.
A
cross a variety of industries – from manufacturing and high technology to
chemicals and energy – the direct sales model
is giving way to new types of distribution
channels powered by the World Wide Web.
These channels, which can encompass valueadded resellers, systems integrators, distributors, and e-marketplaces, can help efficiently
drive revenues without adding to the overhead and cost structure of the original manufacturer or supplier. To preserve and grow
these channel relationships, leading organizations are turning to Partner Relationship
Management (PRM) technologies.
Today’s PRM solutions enable these companies to manage, monitor, and empower
their channel partners by streamlining common processes; introducing collaborative
mechanisms for market development and
joint sales; and providing simple, efficient
communications capabilities. As the slowing
economy forces companies to strive toward
true differentiation and increased responsiveness to customers, the functionality
delivered by PRM vendors enables these
companies to achieve their strategic goals
much more efficiently and reliably.
As PRM technologies evolve, the focus is
on defining and delivering meaningful metrics to provide increased visibility into each
company’s demand chain. These metrics
enable organizations to see the returns
generated from their investments and also get
an accurate read of their revenue streams.
This white paper looks at the opportunities generated by PRM technologies, the
market dynamics that influence how PRM
solutions can be implemented and important
points for suppliers, manufacturers, and
distributors to consider.
Solutions in PRM
For years, channel managers have known
that they need to increase sales revenues and
reduce costs in the channel while continuing
to focus on increasing market share. The
Internet has brought new dynamics to the
equation – driving new levels of integration
among information and transaction systems
and enabling true collaborative markets for
generating revenues. These innovations
have helped make channel relationships
more productive without raising costs. At the
same time, the Web has provided channel
and alliance managers with new and powerful tools to address classic channel management challenges such as channel conflict
and sales training.
Web-based PRM solutions address three
primary revenue activities: pre-sales activities, the sales process, and post sales activities. Some functions in partner management
are needed across all stages of the sales
process while others only apply to one sector.
For example, sales force readiness for a new
product is mainly a pre-sales activity while
partner life cycle management has merit all
the way from recruiting a partner to rewarding them for excellence and achievement.
Vendors must bear in mind the five key
aspects of PRM within the three processes of
pre-sales, sales and post-sales. These aspects
are Relationship, Productivity, Transactions,
Community, and Entitlement. Relationships
are the foundation of all PRM activities and
process; if properly managed, relationships
can serve the key interests of the vendor.
A program that uses this philosophy with
appropriate metrics will have a highly
educated and motivated partner with
efficient engagement models.
Within each category, PRM solutions must
deliver a specific set of functions and infrastructure capabilities. The key functions are:
performance of registered partners. This
analysis can then be used to deliver targeted
and relevant information, transactions and
services to these channels. Like many parts
of PRM, lifecycle management is a combination of process and technology. It involves
gathering and managing valid, up-to-date
information on partners and then using this
information to service them appropriately.
Partner Lifecycle Management
Sales Effectiveness
PRM solutions must enable vendors to help
partners and vendors manage their indirect
business. This requires a good knowledge of
the partner base and good PRM applications
to plan, recruit, monitor, and analyze the
Like any effective sales force, partners will
sell what they know well. Often the channel
will promote a product purely because it’s
the easiest to sell, not because it’s the best or
generates the most revenue for them. Using
Analytics and Insight
This is the ability to capture partner information to make relevant decisions based on
partner performance and processes. The
Internet offers new opportunities to collect
and respond to fast-changing data in real
time. Vendors that are perceived to be
responsive to these changing market
conditions will have a significant advantage
in the channel and hence gain preference
among their key channel partners.
Demand Creation
A major reason partners choose each other
is their joint ability to create market demand
and grow revenue and market share.
Traditionally vendors have not done a good
job of creating demand for their partners
and delivering it to the people that matter –
the channel sales reps in the field. With
PRM-derived campaign management, funds
management and content creation and
delivery tools, effective demand creation
is finally an achievable goal. Companies
can create leads, add value to them, and
deliver them to the people who need them
leveraging these PRM applications.
Kapi Attawar is Vice President, Marketing, for OnDemand, an industry leader in delivering comprehensive
PRM service. He was previously Director of North American e-services for Hewlett-Packard.
Defying the Limits • 169
Partner Relationship Management
Supply and Demand Chain
CRM
Web
Call Center
Supplier
Direct Sales
Vendor
ERM
Customer
Partners
PRM
The Components of Integrated PRM
CRM
ERM
Customer
Demand
Creation
Transaction
Efficiency
Partner
Life Cycle
Management
Service &
Support
Sales
Efficiency
Re
170 • Defying the Limits
la
tio
A n a ly
nsh
ti c s & R e p o r t i n g
t
ip M
ras
anage m ent an d Inf
tu
ruc
re
Partner Relationship Management
PRM-Enabling Functionality Components
Demand Creation
Campaign Management
Content Management
Market Development Funds Management
Sales Effectiveness
Sales Training
Partner Forecasting
Opportunity Management
Interactive Selling & Cross Selling
Lead Management
Sales Configuration
Proposal Generation
Partner Compensation
Order Efficiency
E-Commerce Sell-Side
Transaction Platform
Service & Support
Service Training & Certification
Order Management
Service Level Management
Partner Life Cycle Management
Partner Profiling
Partner Analysis
Partner Planning
Partner Recruitment
Partner Registration
Partner Matching
Partner Monitoring
Analytics & Insight
Analytic & Reporting Capabilities
Leverage of Insights to Enhance Performance
Relationship Management Services
and Infrastructure
Supports modeling of many-to-many relationships
Role-based distribution of applications and content distributed
throughout extended demand value network
PRM
Application
Best of Breed
B2B Application
B2B Application
Suite
Allegis
ChannelWave
Click Commerce
Comergent
OnDemand
Partnerware
Siebel (eChannel)
infoNow
Siebel
Allegis
ChannelWave
Click Commerce
Comergent
OnDemand
Partnerware
Siebel (eChannel)
ATG
Broadvision
Blue Martini
CoVia
Delano
E.piphany
iMediation
infoNow
Promptu
SoftAd
Vignette
Oracle
Siebel
Allegis
ChannelWave
Click Commerce
Comergent
OnDemand
Partnerware
Siebel (eChannel)
Azerity
(Intellic)
Calico
Commerce
CoVia
Firepond
infoNow
MarketFirst
MarketSoft
Promptu
SoftAd
Trilogy
Oracle
Siebel
Allegis
ChannelWave
Click Commerce
Comergent
OnDemand
Partnerware
Siebel (eChannel)
Ariba
ATG
Broadvision
CommerceOne
IBM (Websphere)
Vignette
Oracle
SAP
Siebel
Allegis
ChannelWave
Click Commerce
Comergent
OnDemand
Partnerware
Siebel (eChannel)
Azerity
(Intellic)
Firepond
(Brightware)
infoNow
Primus
Nortel
Oracle
PeopleSoft
Siebel
Allegis
ChannelWave
Click Commerce
Comergent
OnDemand
Partnerware
Siebel (eChannel)
Brio
Business Objects
Cognos
Kana (Broadbase)
E.piphany
Microstrategy
Oracle
Siebel
Allegis
ChannelWave
Click Commerce
Comergent
OnDemand
Partnerware
Siebel (eChannel)
CoVia
iMediation
infoNow
MarketSoft
Siebel
Thin-client administration and customization tools, and
secure data schema
Collaboration and workflow tools for tasks, projects and processes
Back- and front-office integration, including multiple “touch-points”
Gartner Group, May 2001
Defying the Limits • 171
Partner Relationship Management
Web-based training methods as well as sales
and opportunity management tools, vendors
can help partners to effectively cross-sell and
up-sell. In addition, PRM tools can help vendors to forecast demand, thereby enabling
vendors to plan better and manage costs.
Transaction Efficiency
Vendors often hear from their channel partners that they are difficult to work with and
that channel partners have trouble dealing
with vendors’ complex internal processes
and systems needed to deliver solutions to
customers. The advent of the Web has added
to ensure the quality is delivered and the
vendor’s brand is protected.
PRM Infrastructure
Across all sales and service functions, the
user needs a consistent infrastructure with a
common look and feel. This should deliver all
aspects of enterprise scalability while catering to the end-users needs as a consumer. For
a vendor it is important that uptime, security,
and scalability are addressed; meanwhile the
end user needs a single log-on to multiple
back-end and front-office systems featuring a
user-friendly interface.
As economic uncertainties force a new pragmatism
about the return on investment for all IT spending,
PRM providers are already embracing analytics and
metrics as both a differentiator and an opportunity
to prove the viability of their applications.
an additional channel to contend with – the
Web commerce site. This means it is important to have solutions that enable sell-side
transactions that provide comprehensive
integration of partners’ systems into the
vendor’s front and back-office applications,
including sales force automation (SFA),
Customer Relationship Management (CRM)
and Enterprise Resource Planning (ERP)
systems. In other words, the channels need a
single access point with a consistent view of
all applications that are required for them to
do business.
Service and Support
Vendors need to consider service and
support from two aspects – the service from
vendors to partners and also the service
customers receive from whichever channel
they encounter. For the channel this means
pre-sales and post-sales support as well as
order management and entitlement management. For the customers and channel,
service training and certification become key
WEBLINK
Learn more about Partner Relationship
Management in a white paper by Gartner Inc.’s
Wendy Close at The CRM Project website,
http://close.CRMproject.com.
172 • Defying the Limits
The platform should automate the
management of multiple relationships as
defined by the vendor organization and
distribute services and transactions through
a reliable and secure environment based on
the roles of the people accessing the services.
There should be only one secure database
and schema across PRM, CRM, and, if
possible, ERM (Enterprise Relationship
Management) systems. Administration
should generally be biased towards selfmanagement to reduce the overhead of a
large IT maintenance staff and collaboration and workflow tools should be available
for all key projects and processes.
These functions are fundamental to the
success of any PRM implementation, but it
can be difficult for many organizations to successfully implement all the functions at once.
This is partly due to technology issues such
as legacy environments but also because of
people, process, and bandwidth issues. So it is
important to look at the state of the market
and match the available solutions and services with the priority needs of your company.
Then, based on a long-term vision, start at the
point of greatest need to get a quick success
under your belt. The rest of the PRM solution
can then be implemented with the blessing of
the whole company.
Market Dynamics
The Partner Relationship Management
arena is changing rapidly, driven by an
urgent need to turn distribution channel
relationships into a sustainable competitive
advantage. There are important market
trends now influencing the market, making
PRM a critical element to enable companies
to compete effectively.
Support for the full lifecycle of a PRM
strategy is now essential. What is becoming
very clear is that PRM vendors need to
embrace all aspects of the Partner
Relationship Management spectrum, including pre-sales, sales, and post-sales activity.
Vendors focusing only on one of the three
areas of PRM run the risk of greater competition from vendors with related technologies and potential consolidation.
Demand chain metrics and analytics have
arrived. As economic uncertainties force a
new pragmatism about the return on investment for all IT spending, PRM providers are
already embracing analytics and metrics as
both a differentiator and an opportunity to
prove the viability of their applications.
Partner Selectivity is also driving the vendor need for stronger bonds and preference
in the channel. As partners move higher up
the service value chain, they cannot afford to
service many vendors. Statistics show that
many major distributors get the majority of
their business from their top three vendors
and that this gap is currently widening. The
race is on to gain channel mind share; once
the battle is over it may be too difficult to win
a majority position in any market space.
Partner Relationship Management is not
new in concept – but this is the first time
channel management technologies have
combined with promise of the Internet to
fundamentally enhance and enrich the channel relationship. In the past, forward-thinking vendors such as Cisco attained market
leverage by building IT solutions – including
Partner Relationship Management solutions
– themselves. Today these same solutions are
available from a combination of vendors.
This enables suppliers, manufacturers, distributors, and others to get to market faster,
with more affordable and practical solutions
than at ever before.
Pragmatism
drives
this
market.
Ultimately those technologies that deliver
the ability to retain customers and grow a
customer base through responsiveness and
Partner Relationship Management
predictable execution will survive today’s
uncertain economic climate. Global 2,500
companies want pragmatism and proof of
execution over promises. So, if the solutions
are available and the market is ready, what
do you need to consider before you embark
on a PRM implementation?
Points to Consider
First, it is important to reject a series of common misconceptions about PRM. Vendors
cannot think of partners as extensions of
their own sales force but rather as extensions
of their customers. They must distinguish
between partner companies and the real end
users within these companies who sell all
vendors’ products. It is also important to keep
in mind the following key points when planning to deploy PRM:
Start with your goals in clear focus.
First, decide what you want to accomplish
with a PRM system and move forward with
the integration strategies to make internal
and partner systems work together seamlessly. Many companies use PRM applications in conjunction with their Customer
Relationship Management (CRM) prospecting tools, so be sure to think through the role
PRM can play with regard to all areas of your
organization. The opportunity to gather
greater input into product lifecycle manage-
ment (PLM) is also perfectly attuned to the
data captured by PRM.
Focus on metrics.
Especially in these tough economic times, it’s
critical to develop a solid business strategy
based on the actual performance that occurs
in your channels of distribution. Metrics on
the development of sales for a new product,
the sell-through rates on specific products,
and the definition of new strategies based on
the results of promotional strategies are all
necessary to create a consistently effective
PRM strategy.
Think Scalability.
Since many PRM vendors both have an ASPfocused hosted model in addition to a license
model, be sure to budget a significant
amount of time to assess how the applications are hosted and with whom. Exodus is
clearly a leader in this area, as their commitment to security is one of the most aggressive
in the industry.
head of implementing and managing solutions while delivering significant time-tomarket advantages. If all users need to
get onto a system is knowledge of the
browser and they can implement personal
changes in real time, they are more likely
to feel empowered and to use the system
consistently.
Conclusions
The PRM marketplace is undergoing fundamental shifts, as companies increasingly
focus their revenue strategies on customer
and demand chain relationship management.
The ability of PRM systems to help cultivate
and drive sales from the earliest pre-sales
processes to post-sales service and support
has combined with PRM’s ability to deliver
key metrics for ROI measurement. The result
is clear value from PRM implementations for
companies in a wide range of industries. PRM
is becoming a key area of differentiation for
vendors and as a result is now a rapidly
growing market with good, robust solutions
■
available from the PRM leaders.
Think Easy, Think Self-Manage.
Many vendors deliver solutions that require
complex training and huge investments to
manage the implementation. The Web now
offers the ability to reduce training to
minimum and to allow end-users new levels
of self-management. This reduces the over-
WEBLINK
Learn how OnDemand helps companies
accelerate sales, reduce channel operation costs,
and increase channel inventory efficiencies at
http://ondemand.CRMproject.com
Defying the Limits • 173