By Chanan Greenberg, SVP and GM, High Tech, Model N
“The future of channel partner programs and ecosystems will be anchored in automation, flexibility, scalability, and self-service. The effective use of technology tools is no longer optional. Ecosystems don’t run on spreadsheets,” observed Forrester analyst Chris Cleary during a recent Model N webcast.
And he’s right. The industry is currently poised to leave spreadsheets behind and progress toward real-time channel measurement and – ultimately – deal automation. In an era when some 75% of all high-tech transactions somehow touch channels, making channel transactions easy is a business imperative.
Today and in the past, numerous high tech companies have relied on massive spreadsheets or home-grown software applications to support the creation of incentives and rebates and oversee the disbursement of market development funds (MDF). This approach creates information siloes, and, while they may be managed by channel sales or sales operations teams, they’re often disconnected from channel measurement ecosystems that integrate enterprise resource planning (ERP) platforms or other systems of record.
Likely to be inaccurate, these solutions rely heavily on manual processes for data entry. What’s more, the absence of a channel ecosystem that integrates current and real-time data means that companies can often fail to validate sales commissions and partner payouts and may be unable to ensure correct allocation and spend of marketing funds.
As channel programs must evolve to align with new revenue models and help channels execute on pre-sales activities that drive the revenue outcome, these programs will become more granular, more numerous and more collaborative. They need to be easily monitored, measured and integrated into PRM, CRM and ERP, and this will further drive the need to retool and automate.
Most deals and pricing are managed by pricing teams and “deal desks,” with people that build customer deals that include correct pricing, applicable discounts, appropriate sales incentives, and other features, like MDF dollars. Company price books and deals were historically managed by these teams, using laborious manual processes – including gathering data on customers and purchasing – to feed into deal management. However, as channel ecosystems have grown and product complexity increases, the use of spreadsheets and in-house legacy systems doesn’t scale, limiting topline revenue and reducing margins.
Imagine a scenario where a partner requests a quote, hoping to fill their order quickly and go to market. But instead, imagine that partner being forced to wait days for a response, simply because manual processes and legacy systems can’t support the sales volume. The lack of responsiveness creates frustration and financial impacts for the channel partner, and the time delay gives ample opportunity for the partner to cross-shop other vendors – making the absence of channel measurement and deal automation a root cause for reduced client retention, lost sales and lower profits.
The above scenario is not at all uncommon, and channel vendors need real-time measurement and deal automation to correctly manage, fairly price and audit deals. Modern channel measurement leverages automation of key channel data processes, including partner data gathering and management, as well as data cleansing and enrichment, to provide greater transparency and more trusted data for decision-making. Supported by artificial intelligence (AI) and machine learning (ML), real-time channel measurement gives companies daily insights into the channel, helping them pinpoint issues faster.
These enhanced approaches to data work in partnership with deal automation. High-quality data that is successfully fed into processes that manage quote and deal review cycles typically creates a better, faster result. Automatic examination of different deal scenarios, and, in many cases, automatically resolving pricing, empowers companies to scale channel sales in a “hands-off” manner, diverting customers to self-service options that save time and money – while still providing outstanding, timely service.
In one real-world example, a semiconductor vendor utilized home-grown systems for quoting and pricing, as well as shipping and debit procedures. They had no visibility into their own quotes, and their cumbersome quoting cycle required three days, giving customers time to price shop competitors. The semiconductor vendor lost business as a result.
Subsequently, by implementing a cloud-based, AI-powered channel measurement solution that delivered nearly instantaneous channel reports, the company automated its quotes, reducing cycle time by 50%, while increasing quote and opportunity volume by 50%. By leveraging channel measurement and automation, they increased a 17% win rate to 34%, while achieving a 1.6% profitability gain.
Ultimately, real-time channel measurement and automation drive improved business results. Not only can channel vendors instantly understand program status, their partners can easily request the best prices and incentives with minimal friction and lag time, often while reducing workload. Additionally, better data enables channel vendors to dynamically adjust activities as needed, while insights from single-platform technology solutions can help align programs to more profitable market segments.
In 2021 and beyond, this kind of automation will better serve the channel, facilitating its widespread adoption.