Research Finds Key Obstacles in IT Channel Automation
A new study found that channel leaders are falling behind in terms of investing in and implementing channel tools
A new Forrester Consulting study found that channel leaders are falling behind in terms of investing in and implementing channel tools that really work, causing relationships between vendors and partners to suffer.
The study which polled 211 senior leaders in channel strategy found that automating channel revenue processes across systems is difficult for firms to accomplish even though they see it as extremely valuable.
According to the report, over 70% of respondents stated that solution based incentive management, automated channel data management, and automated MDF management would be very valuable when optimizing channel revenue processes.
Additionally, greater than 65% of leaders place the same value on automated rebate management, channel partner portals, and automated channel management, making it clear that high tech executives place a high value on technology features that can interoperate across data and organizational silos.
Revenue management concerns feature prominently across the software and high-tech sectors. The research revealed the following obstacles when it comes to optimizing sales decisions and profitability:
- Short product lifecycles (53%)
- Lack of recognition/appreciation that sales data quality is an obstacle (52%)
- Reliance on manual tools and/or processes (33%)
- Lack of a unified view of channel sales data and activities (32%)
- Technology silos (29%)
- Inconsistent sales data entry (28%)
- Poor data integration/merging capabilities (27%)
“This new study and survey findings show that the crisis in channel automation is real. In many cases data is siloed, and a lack of common understanding around channel revenue processes exists,” said Model N’s SVP and GM of High Tech, Chanan Greenberg.
“Numerous high-tech and B2B software companies are literally flying blind due to siloed systems and processes. They’re leaving money on the table, because they don’t possess the proper tools to gather the timely, accurate and actionable channel sales information which can make a big difference when it comes to protecting margins and revenue streams.”
The problem is that channel leaders lag in terms of investing in and implementing channel tools that really work, causing relationships between vendors and partners to suffer.
More than half of companies (56%) rely on homegrown technology solutions to partly manage their channel revenue processes, and many of these in-house solutions suffer from overlapping functionality, resulting in disconnected silos of data that are prone to duplication, errors and inefficiency.
In fact, the Forrester Consulting study states that “firms are struggling to stitch together a myriad of channel tools and manual processes, resulting in low-quality channel data that fails to provide a clear and timely view of performance.”
However, executives do see the value in end to end channel automation for uncovering high-value opportunities and improving the partner experience. According to the study, “decision makers place a high value on solution features that provide a more automated and unified way of managing their channel processes and data from end-to-end.”
According to Forrester Research’s Principal Analyst for Channels, Partnerships and Ecosystems, Jay McBain, high-tech manufacturing and B2B software companies – given the current marketing environment – should seek to build a holistic set of metrics and KPIs that accurately reflect channel effectiveness.
“Today’s increasingly complex channel environment means once-reliable partner performance measurements such as revenue tiers, profit contribution, certifications, and customer satisfaction surveys fail to properly predict overall channel performance,” he states in the report entitled Unlocking The Power Of Partner Ecosystems Demands Powerful Measurement. “To succeed, B2B marketers and channel leaders must embrace techniques that will measure the expanding ecosystems’ influence on the entire buyer’s journey and not just the transaction.”
The survey data bears out McBain’s assertion. When asked if they could hypothetically improve the level of channel automation and integration, responses were broadly positive. Specific improvements cited included:
- Protecting our margins from fraud (49%)
- Improving the accuracy of our channel sales data (48%)
- Protecting our margins from leakage (48%)
- Empowering/rewarding our highest-performing partners (44%)
- Developing a single view of channel sales data (44%)
- Improving the experience of our end customers (44%)
According to Greenberg, Model N’s revenue management platform is designed and built to automate channel revenue processes and facilitate success in the areas of sales operations and profitability through more effective data management.
He added, “By integrating channel technologies and processes through automated, data-driven programs, brands can instill greater confidence in their channel partners and drive more revenue,” he observed. “And the research data from Forrester Consulting shows that companies are ready to embrace the benefits of channel automation – and the time to act is now.”