ondemand by using prm technologies · partner life cycle management has merit all the way from...

Driving Multi-Channel Revenues by Using PRM Technologies

PRM, a key area of differentiation for vendors, is a rapidly growingmarket with good, robust solutions available from industry leaders.

Kapi AttawarOnDemand

Partner Relationship Management

http://attawar.CRMproject.com

Across a variety of industries – from man-ufacturing and high technology to

chemicals and energy – the direct sales modelis giving way to new types of distributionchannels powered by the World Wide Web.These channels, which can encompass value-added resellers, systems integrators, distribu-tors, and e-marketplaces, can help efficientlydrive revenues without adding to the over-head and cost structure of the original manu-facturer or supplier. To preserve and growthese channel relationships, leading organiza-tions are turning to Partner RelationshipManagement (PRM) technologies.

Today’s PRM solutions enable these com-panies to manage, monitor, and empowertheir channel partners by streamlining com-mon processes; introducing collaborativemechanisms for market development andjoint sales; and providing simple, efficientcommunications capabilities. As the slowingeconomy forces companies to strive towardtrue differentiation and increased respon-siveness to customers, the functionalitydelivered by PRM vendors enables thesecompanies to achieve their strategic goalsmuch more efficiently and reliably.

As PRM technologies evolve, the focus ison defining and delivering meaningful met-rics to provide increased visibility into eachcompany’s demand chain. These metricsenable organizations to see the returns generated from their investments and also getan accurate read of their revenue streams.

This white paper looks at the opportuni-ties generated by PRM technologies, the market dynamics that influence how PRMsolutions can be implemented and importantpoints for suppliers, manufacturers, and distributors to consider.

Solutions in PRMFor years, channel managers have knownthat they need to increase sales revenues andreduce costs in the channel while continuingto focus on increasing market share. TheInternet has brought new dynamics to the

equation – driving new levels of integrationamong information and transaction systemsand enabling true collaborative markets forgenerating revenues. These innovationshave helped make channel relationshipsmore productive without raising costs. At thesame time, the Web has provided channeland alliance managers with new and power-ful tools to address classic channel manage-ment challenges such as channel conflictand sales training.

Web-based PRM solutions address threeprimary revenue activities: pre-sales activi-ties, the sales process, and post sales activi-ties. Some functions in partner managementare needed across all stages of the salesprocess while others only apply to one sector.For example, sales force readiness for a newproduct is mainly a pre-sales activity whilepartner life cycle management has merit allthe way from recruiting a partner to reward-ing them for excellence and achievement.

Vendors must bear in mind the five keyaspects of PRM within the three processes ofpre-sales, sales and post-sales. These aspectsare Relationship, Productivity, Transactions,Community, and Entitlement. Relationshipsare the foundation of all PRM activities andprocess; if properly managed, relationshipscan serve the key interests of the vendor. A program that uses this philosophy withappropriate metrics will have a highly educated and motivated partner with efficient engagement models.

Within each category, PRM solutions mustdeliver a specific set of functions and infra-structure capabilities. The key functions are:

Partner Lifecycle ManagementPRM solutions must enable vendors to helppartners and vendors manage their indirectbusiness. This requires a good knowledge ofthe partner base and good PRM applicationsto plan, recruit, monitor, and analyze the

performance of registered partners. Thisanalysis can then be used to deliver targetedand relevant information, transactions andservices to these channels. Like many partsof PRM, lifecycle management is a combina-tion of process and technology. It involvesgathering and managing valid, up-to-dateinformation on partners and then using thisinformation to service them appropriately.

Analytics and InsightThis is the ability to capture partner infor-mation to make relevant decisions based onpartner performance and processes. TheInternet offers new opportunities to collectand respond to fast-changing data in realtime. Vendors that are perceived to beresponsive to these changing market conditions will have a significant advantagein the channel and hence gain preferenceamong their key channel partners.

Demand CreationA major reason partners choose each otheris their joint ability to create market demandand grow revenue and market share.Traditionally vendors have not done a goodjob of creating demand for their partnersand delivering it to the people that matter –the channel sales reps in the field. WithPRM-derived campaign management, fundsmanagement and content creation anddelivery tools, effective demand creation is finally an achievable goal. Companies can create leads, add value to them, anddeliver them to the people who need themleveraging these PRM applications.

Sales EffectivenessLike any effective sales force, partners willsell what they know well. Often the channelwill promote a product purely because it’sthe easiest to sell, not because it’s the best orgenerates the most revenue for them. Using

Defying the Limits • 169

Kapi Attawar is Vice President, Marketing, for OnDemand, an industry leader in delivering comprehensivePRM service. He was previously Director of North American e-services for Hewlett-Packard.


170 • Defying the Limits

ERM

CRM

Customer

Supply and Demand Chain

The Components of Integrated PRM

SalesEfficiency

Service &Support

TransactionEfficiency

Partner Life Cycle

Management

DemandCreation

Analytics & ReportingRelationship Management and Infrastructu

re

Web

CRM

PRM

ERM

Call Center

Direct Sales

Partners

CustomerVendorSupplier



PRM-Enabling Functionality Components

Demand Creation

Sales Effectiveness

Service & Support

Partner Life Cycle Management

Analytics & Insight

Relationship Management Servicesand Infrastructure

infoNow

infoNowPromptuSoftAdVignette

ATGBroadvisionBlue MartiniCoViaDelanoE.piphanyiMediation

MarketFirstMarketSoftPromptuSoftAdTrilogy

Azerity (Intellic)Calico CommerceCoViaFirepondinfoNow

AribaATGBroadvisionCommerceOneIBM (Websphere)Vignette

Azerity (Intellic)Firepond (Brightware)infoNowPrimus

BrioBusiness ObjectsCognosKana (Broadbase)E.piphanyMicrostrategy

CoViaiMediationinfoNowMarketSoft

Siebel

OracleSiebel

OracleSiebel

OracleSAPSiebel

NortelOraclePeopleSoftSiebel

OracleSiebel

Siebel

Best of BreedB2B Application

PRM Application

B2B ApplicationSuite

Campaign ManagementContent ManagementMarket Development Funds Management

Supports modeling of many-to-many relationships

Role-based distribution of applications and content distributed throughout extended demand value network

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”

Order Efficiency

Sales TrainingPartner ForecastingOpportunity ManagementInteractive Selling & Cross Selling

E-Commerce Sell-SideTransaction Platform

Service Training & CertificationOrder ManagementService Level Management

Lead ManagementSales ConfigurationProposal GenerationPartner Compensation

Partner ProfilingPartner AnalysisPartner PlanningPartner Recruitment

Partner RegistrationPartner MatchingPartner Monitoring

Analytic & Reporting CapabilitiesLeverage of Insights to Enhance Performance

AllegisChannelWaveClick CommerceComergentOnDemandPartnerwareSiebel (eChannel)







Gartner Group, May 2001


172 • Defying the Limits

Web-based training methods as well as salesand opportunity management tools, vendorscan help partners to effectively cross-sell andup-sell. In addition, PRM tools can help ven-dors to forecast demand, thereby enablingvendors to plan better and manage costs.

Transaction EfficiencyVendors often hear from their channel part-ners that they are difficult to work with andthat channel partners have trouble dealingwith vendors’ complex internal processesand systems needed to deliver solutions tocustomers. The advent of the Web has added

an additional channel to contend with – theWeb commerce site. This means it is impor-tant to have solutions that enable sell-sidetransactions that provide comprehensiveintegration 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 asingle access point with a consistent view ofall applications that are required for them todo business.

Service and SupportVendors need to consider service and support from two aspects – the service fromvendors to partners and also the service customers receive from whichever channelthey encounter. For the channel this meanspre-sales and post-sales support as well asorder management and entitlement man-agement. For the customers and channel,service training and certification become key

to ensure the quality is delivered and the vendor’s brand is protected.

PRM InfrastructureAcross all sales and service functions, theuser needs a consistent infrastructure with acommon look and feel. This should deliver allaspects of enterprise scalability while cater-ing to the end-users needs as a consumer. Fora vendor it is important that uptime, security,and scalability are addressed; meanwhile theend user needs a single log-on to multipleback-end and front-office systems featuring auser-friendly interface.

The platform should automate the management of multiple relationships asdefined by the vendor organization and distribute services and transactions througha reliable and secure environment based onthe roles of the people accessing the services.There should be only one secure databaseand schema across PRM, CRM, and, if possible, ERM (Enterprise RelationshipManagement) systems. Administrationshould generally be biased towards self-management to reduce the overhead of alarge IT maintenance staff and collabora-tion and workflow tools should be availablefor all key projects and processes.

These functions are fundamental to thesuccess of any PRM implementation, but itcan be difficult for many organizations to suc-cessfully implement all the functions at once.This is partly due to technology issues suchas legacy environments but also because ofpeople, process, and bandwidth issues. So it isimportant to look at the state of the marketand match the available solutions and serv-ices with the priority needs of your company.Then, based on a long-term vision, start at thepoint of greatest need to get a quick successunder your belt. The rest of the PRM solutioncan then be implemented with the blessing ofthe whole company.

Market DynamicsThe Partner Relationship Managementarena is changing rapidly, driven by anurgent need to turn distribution channelrelationships into a sustainable competitiveadvantage. There are important markettrends now influencing the market, makingPRM a critical element to enable companiesto compete effectively.

Support for the full lifecycle of a PRMstrategy is now essential. What is becomingvery clear is that PRM vendors need toembrace all aspects of the PartnerRelationship Management spectrum, includ-ing pre-sales, sales, and post-sales activity.Vendors focusing only on one of the threeareas of PRM run the risk of greater compe-tition from vendors with related technolo-gies and potential consolidation.

Demand chain metrics and analytics havearrived. As economic uncertainties force anew pragmatism about the return on invest-ment for all IT spending, PRM providers arealready embracing analytics and metrics asboth a differentiator and an opportunity toprove the viability of their applications.

Partner Selectivity is also driving the ven-dor need for stronger bonds and preferencein the channel. As partners move higher upthe service value chain, they cannot afford toservice many vendors. Statistics show thatmany major distributors get the majority oftheir business from their top three vendorsand that this gap is currently widening. Therace is on to gain channel mind share; oncethe battle is over it may be too difficult to wina majority position in any market space.

Partner Relationship Management is notnew in concept – but this is the first timechannel management technologies havecombined with promise of the Internet tofundamentally enhance and enrich the chan-nel relationship. In the past, forward-think-ing vendors such as Cisco attained marketleverage by building IT solutions – includingPartner Relationship Management solutions– themselves. Today these same solutions areavailable from a combination of vendors.This enables suppliers, manufacturers, dis-tributors, and others to get to market faster,with more affordable and practical solutionsthan at ever before.

Pragmatism drives this market.Ultimately those technologies that deliverthe ability to retain customers and grow acustomer base through responsiveness and

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.

WEBLINK

Learn more about Partner RelationshipManagement in a white paper by Gartner Inc.’sWendy Close at The CRM Project website,http://close.CRMproject.com.



predictable execution will survive today’suncertain economic climate. Global 2,500companies want pragmatism and proof ofexecution over promises. So, if the solutionsare available and the market is ready, whatdo you need to consider before you embarkon a PRM implementation?

Points to Consider First, it is important to reject a series of com-mon misconceptions about PRM. Vendorscannot think of partners as extensions oftheir own sales force but rather as extensionsof their customers. They must distinguishbetween partner companies and the real endusers within these companies who sell allvendors’ products. It is also important to keepin mind the following key points when plan-ning to deploy PRM:

Start with your goals in clear focus. First, decide what you want to accomplishwith a PRM system and move forward withthe integration strategies to make internaland partner systems work together seam-lessly. Many companies use PRM applica-tions in conjunction with their CustomerRelationship Management (CRM) prospect-ing tools, so be sure to think through the rolePRM can play with regard to all areas of yourorganization. The opportunity to gathergreater input into product lifecycle manage-

ment (PLM) is also perfectly attuned to thedata captured by PRM.

Focus on metrics.Especially in these tough economic times, it’scritical to develop a solid business strategybased on the actual performance that occursin your channels of distribution. Metrics onthe development of sales for a new product,the sell-through rates on specific products,and the definition of new strategies based onthe results of promotional strategies are allnecessary to create a consistently effectivePRM strategy.

Think Scalability.Since many PRM vendors both have an ASP-focused hosted model in addition to a licensemodel, be sure to budget a significantamount of time to assess how the applica-tions are hosted and with whom. Exodus isclearly a leader in this area, as their commit-ment to security is one of the most aggressivein the industry.

Think Easy, Think Self-Manage.Many vendors deliver solutions that requirecomplex training and huge investments tomanage the implementation. The Web nowoffers the ability to reduce training to minimum and to allow end-users new levelsof self-management. This reduces the over-

head of implementing and managing solu-tions while delivering significant time-to-market advantages. If all users need to get onto a system is knowledge of thebrowser and they can implement personalchanges in real time, they are more likely to feel empowered and to use the systemconsistently.

ConclusionsThe PRM marketplace is undergoing funda-mental shifts, as companies increasinglyfocus their revenue strategies on customerand demand chain relationship management.The ability of PRM systems to help cultivateand drive sales from the earliest pre-salesprocesses to post-sales service and supporthas combined with PRM’s ability to deliverkey metrics for ROI measurement. The resultis clear value from PRM implementations forcompanies in a wide range of industries. PRMis becoming a key area of differentiation forvendors and as a result is now a rapidly growing market with good, robust solutionsavailable from the PRM leaders.

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WEBLINK

Learn how OnDemand helps companiesaccelerate sales, reduce channel operation costs,and increase channel inventory efficiencies athttp://ondemand.CRMproject.com

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