Managing Channel Relations

Partner-relationship management (PRM) solutions have traditionally focused on maximizing sales revenue and increasing the effectiveness of sales and marketing initiatives through the coordination of channel partnerships. The earliest PRM tools used simple contact databases and the posting of product and pricing information through an extranet portal. But the extended enterprise has resulted in new types of partnerships, leading to new challenges in managing multiple facets of partner relationships and information flows that extend across a broad range of constituencies.

PRM applications go beyond customer-relationship management (CRM) and supplier-relationship management (SRM) solutions by providing visibility and control into multiple tiers of partners. At the same time, they provide a portal framework for the aggregation of back-end systems, content repositories and collaboration tools, as well as secure access to a broad range of employees and partners.

Improving the efficacy of sales and marketing activities is also no longer the sole objective of PRM. Now, instead of merely improving channel effectiveness, many organizations seek to improve the way they work with their partners.

In addition, the new definition of PRM differentiates between supply-side partners and demand-side partners. Supply-side partners provide information, tools, products or services that impact partners. Demand-side partners focus on increasing sales of products or services. By acknowledging the need for solutions that address both sets of relationships--often involving parties that play dual roles--organizations have raised the bar for PRM solutions.

Features Overview
Traditionally, PRM solutions feature such elements as:
Management dashboard: Visibility into contact information, sales opportunities and capabilities traditionally found in lead and opportunity management.

Channel marketing: Tools for managing the sharing of catalog, pricing and product data, marketing data and promotional information.

Partner portal: A Web-enabled interface that provides partners with self-service access to key information, such as product information, marketing collateral and transactional details.

Order management: Integration to tools that allow the brand owner and its channel partners to execute orders over the Internet, including visibility of order status and fulfillment.

Training and certification: Tools for the development, posting and retrieval of Web-based market-education and training activities.

The newer PRM products also feature the following: Contract management: Tools for managing relationships and for sharing detailed information for handling exceptions, instituting policies, and administering and enforcing service-level agreements.

Negotiation/sourcing: Tools that allow parties to collaborate in the sourcing of products and materials, and aid in the development of and response to RFPs.

Demand management: Tools that allow parties to share information crucial to understanding demand requirements.

Performance management: Tools for evaluating partner performance, including registration, profiling and metrics.

After-market service: Distributed access to customer-service features that extend beyond self-service access to information.

Vendor Approaches
There are various approaches to applications that are marketed as PRM solutions. No single vendor addresses everything required for a PRM solution. Nevertheless, the market is experiencing significant convergence and turmoil. The recent news about Oracle/PeopleSoft/JD Edwards is one example, along with the merger of Click Commerce and Allegis. And ERP and CRM vendors are adding PRM features to their products.

Siebel has garnered a leadership position in the field by leveraging superior account-management capabilities for the segmentation of partners, along with robust case-management and self-service capabilities to enable collaboration beyond sales to marketing and service support. Siebel has made strides to close the perceived gap between front-office CRM applications and back-office transactional systems by offering enhanced order-management features and packaged integration to back-office data through its Universal Application Network integration offering.

Several vendors have adopted a holistic view of PRM. SAP takes a broad view, focusing on integrated, end-to-end processes that emphasize SAP's heritage as a leading ERP application, with core strengths in back-office integration and order-management capabilities. A key differentiator is the level of self-service access to commerce tools it provides to the brand owner's partners, allowing them to play an active role in catalog management, inventory management and fulfillment.

Solution providers less established in enterprise accounts have taken a unique approach to PRM. Comergent articulates a comprehensive vision, deploying a solution set that addresses PRM within the broader requirements for demand-side collaboration in manufacturing and IT--areas characterized by complex user requirements. ChannelWave has emphasized the importance of supporting a many-to-many partnership model, an approach that most vendors have been reluctant to embrace because they view PRM as a tool designed to serve the needs of the brand owner.

JD Edwards has crafted the most expansive view of PRM, taking into account brand owners' need for order and inventory management, and customer service. Its comprehensive solution is rolled out on a modular basis, with a premium placed on "real-time" integration of the component pieces.

JD Edwards believes the crown jewel of its solution can be integration to its demand-consensus tool. Blue Martini also has had success, positioning best-of-breed e-commerce vendor capabilities in product configuration, catalog management, order processing and service support to address more effective order management, which it perceives to be an unmet need of manufacturers.

Meantime, Manugistics provides core components that focus on demand-planning and collaboration, reflecting its supply-chain heritage. The vendor offers extended supplier evaluation, sourcing and contract-management capabilities that enable deeper levels of collaboration between business partners. At the other end of the spectrum, NetLedger has added PRM capabilities to the integrated front- and back-office CRM applications set it has developed for Oracle.

Overall, the best PRM solutions are those where customers can understand their business goals, assess their current and future requirements and determine the level of process automation desired in their PRM solution.

Dennis Shin and Brook Foust are analysts, and Chris Klima is a technical editor with Doculabs ([email protected]).