Rethinking Digital Transformation for Channel Partner Success

Rethinking Digital Transformation for Channel Partner Success - Channel Mechanics

Michele Lee, Global Program Manager  |  

calednar Channel Mechanics6th May 2020

Rethinking Digital Transformation for Channel Partner Success

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Digital transformation has become one of the hottest topics in tech conversations in recent years. The breakthroughs in technology such as cloud computing, big data, and the Internet of Things (IoT) are enabling and empowering digital transformation by providing a secure, cost-effective platform. In addition, they offer the computing power to help companies stay agile and scale, as and when needed.

 

Most companies and executives understand how critical it is to integrate digital technology into their business. However, putting that transformation into action and having success are two very different stories. According to Forbes1, 70% of digital transformation projects fail. The primary reasons being a lack of focus on the ‘right’ strategic area and integration across the company.

 

Digital Transformation

Nonetheless, we are now witnessing a catalyst that is going to fast-track digital transformation. The Covid-19 pandemic has raised alarm bells worldwide. With unprecedented global stay-home orders resulting in an imperative to digitally transform the way companies operate. When sales are no longer meeting with customers and customers are no longer attending conferences due to travel bans, communications, conferencing, business models, collaboration, and the exchanges of information need to go ‘digital.’ Not only does digital technology enable business continuity, but it’s capable of delivering a differentiated customer experience that helps companies stay ahead of their competition during this challenging time.

To date, customer experience has been driving digital transformation. Therefore, the automation of channel business’ processes often takes a backseat. Forrester2 estimated that 80% of indirect businesses are operating in silos using management processes that are manual. If your company is looking to grow business through channels, automating indirect business’ processes and integrating them with the rest of the company should be a strategic focus. Now is the time to relook at digital transformation strategy, to build a resilient and adaptable ecosystem that is future-ready.

 

The Evolution of Automating Channel Management

Before we talk about the needs and benefits of channel automation, let us look at how channel management and automation have evolved.

 

The Analog Era

1990 saw the launch of the first web page. Throughout the next decade, companies began to create their digital presence on the internet to showcase their products. Yet, when it comes to channel sales and marketing, the ’90s was an ‘analog era’. Here, digital application was limited to ad-hoc emails for non-time critical exchanges and the distribution of agreements, partner prices and quotations. Sales interactions with partners were primarily face-to-face or over the phone. Business planning, tracking of partner performance and management of channel programs were still managed off spreadsheets. Marketing collateral, launch and training materials for partners were regularly dispatched by courier. There was still little to no transparency or feedback mechanism for partners.

 

The Time of Mixed Approaches

Towards the end of the ’90s, a digital approach to managing interaction with customers and prospects emerged.  The era of Customer Relationship Management (CRM). CRM enabled targeted communications and distribution of marketing content based on the customer’s history with the company. While CRM enables similar interactions with channel partners, its ability to manage other channel processes is limited. At the same time, Enterprise Resource Planning (ERP) capabilities were expanded beyond the company boundary to interact with other systems. This included those among partner organizations. In-house systems that harnessed the power of the web and e-commerce technologies were utilized, depending on the IT maturity and company capabilities. However these digital systems were fragmented. As such a significant part of the channel management function continued to be painfully manual.

 

The Digital Era

Over time, new automation software began to emerge that addresses the different touchpoints and processes of the partner lifecycle. Examples include software that automates marketing tasks, training/upskilling learning management systems, and sales pipeline tracking. At the same time, cloud computing took off with most of these digital applications “Software-as-a-Service” (Saas).” In this digital era, vendors have ‘digitized’ most, if not all the business processes for their direct and indirect business. However, these systems were still fragmented, and vendors would attempt to ‘integrate’ them by providing their partners with a single sign-on (SSO) or a landing page as the gateway to all the systems.

 

The Platform Era

This is the time when the paradigm of Partner Relationship Management (PRM) became popular. It provides a set of methodologies, software and templates that manages the process of the partner journey. From partner recruitment, onboarding, enablement, co-marketing, co-selling, compensation and incentives to program management of partner tiers, PRM provides seamless integration of workflows and partners’ data. Unlike its fragmented, usually in-house developed digitized predecessors, PRM is a platform that interconnects with other business applications through Application Programming Interfaces (APIs). In addition, it can integrate with the sales and marketing systems of channel partners. As a platform, PRM is scalable and flexible. Therefore vendors can easily add capabilities, customize (with little or no code changes) existing functions as their business goals and partner programs change, and add partners/users as the ecosystem grows.

 

 

What is Driving the Evolution in Channel Automation?

Many vendors look to partners to grow their business and recognize that channel automation is key to partnership success. But the reality is not every vendor has transitioned to the ‘ideal’ state. So what and who are the critical drivers for the transformation?

 

Executives Mandate

When executives understand how critical it is to evolve with technology and leverage digital processes for efficiencies, digital transformation becomes a top-down mandate. A corporate strategy that aims at digitally transforming the way a company operates, calls for executive sponsorship to align the company and provide ongoing directions.

 

Business Function Led

Channel organizations given the goal to grow indirect business exponentially, but who are finding the lack of automation a major roadblock, accelerate the adoption of PRM for a more robust environment to better manage partner relationships. Business functions such as marketing, salesops, renewals/customer success, finance and technical support that automate their business processes may also drive the deployment and integration of PRM, to extend existing operational efficiencies achieved, to their indirect business.

 

Customer Experience Driven

A significant part of the actual experience with customers is controlled and managed by channel partners. When vendors rely on partners to drive sales engagement and manage the relationships with customers, it is vital to influence partners to provide a better customer experience. To achieve that, vendors need to deliver a good partner experience by transforming ease-of-doing-business through automation.

 

Customer Success’ Requirement

Customer success is one of today’s buzzwords. When partners help manage the customer relationship, closely collaborating and aligning with them on customer success is key to delivering the outcomes that your customers desire. To enable better collaboration, a PRM platform that integrates seamlessly with your business applications to give partners the visibility to critical customer data points such as product usage, billing, and support is a must.

 

Innovations in PRM Platforms

A key driver for channel automation is simply the development of the PRM platform space in recent years. PRM applications have become so feature-rich that they can support most, if not all components of a vendors’ partner programs right out-of-the-box with little customization needed. PRM solutions are modular, so vendors can pick and choose the functionalities they need. With the ability to gradually scale over time. Integration with popular business applications and compatibility with key APIs are now ‘default,’. This makes PRM deployment quick and easy. Moreover, there are many PRM solution providers out there to choose from. Gartner’s recent release of the “Market Guide for Partner Relationship Management Applications” feature 20 providers, some of which are new and rising stars.

 

Partners’ Ask

It is not surprising that distributors or master agents that manage hundreds of second-tier resellers or sub-agents, as well as large partners, are making investments in PRM and CRM. As a result, partners’ ask is one of the drivers. This is because partners are aiming to reap the maximum benefits of automation and integration both upstream and downstream.

 

Conclusions

You have decided that ‘through partners’ is your route to increase your company’s sales. You wish to expand your partner ecosystem and enrich your partner program. Then it is time to rethink your digital transformation strategy. And ensure channel automation is a part of the game plan for partnership success.

The benefits are manifold – improve operational efficiencies, partner experience, productivity, collaboration, and engagement with partners.

A well-integrated PRM platform enables the channel organization to make partner centricity the focus of the company.

 

Stay tuned for “Partner Relationship Management Defined”. Here I’ll offer a deep dive into the core functionalities and benefits of PRM.

 

References:

1 Forbes.com “Companies that failed at Digital Transformation and what we can learn from them” [Online]

2 Forrester.com “Channel automation becomes table stakes for partnership success” [Online]

 

Further Reading: 

    1. Digital Business Transformation in the Channel Starts with Automation
    2. PRM Implementation Considerations
    3. 5 Ways for Vendors to Respond to Covid-19
    4. Top Three Channel Trends to Watch in 2020
    5. PRM Adoption and Utilization
    6. Critical Success Factors for Implementing Change Management

 

 

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