Partnering with the proper PRM provider

A successful PRM initiative requires tools that your partners want to use and business processes that are aligned with their needs.

Know what your partner wants. It's the advice of relationship experts everywhere from Dr. Phil to Dr. Ruth.

And it's advice that holds true if your partner comes from the sales and supply channel as well.

Partner relationship management (PRM), a method of keeping channel partners connected to your business, requires a strategy that has tools partners will use and processes that are aligned with their needs. A PRM implementation requires much more care than a sales force automation implementation.

"The stakes are much higher when you're dealing with external partners," said Rob Desisto, vice president of CRM research with Stamford, Conn.-based Gartner Inc. "The No. 1 issue here is that the technology itself is part of the brand I offer to my partners. If I don't make it easy to do business -- whether through processes or technology -- it won't get done."

PRM software allows partners to access internal company information -- like shipping schedules -- over the Internet. Applications have generally grown from one of three areas, Desisto said. ERP suite vendors Oracle Corp., in Redwood Shores, Calif., Germany's SAP AG and PeopleSoft Inc., in Pleasanton, Calif., have developed PRM functionality as an outgrowth of the transactional side of the relationship. Siebel Systems Inc., in San Mateo, Calif., and to a lesser degree, Bellevue, Wash.-based Onyx Software Corp. have approached PRM from a sales perspective, Desisto said. Finally, there are the best-of-breed vendors like ChannelWave Inc., of Aliso Viejo, Calif., and Click Commerce Inc., of Chicago.

New launches spur PRM investments

PRM technology investments generally occur when a company launches a new product or transitions its channel. Five years ago, Parametrics Technology Corp. (PTC), a product lifecycle management software vendor in Needham, Mass., moved away from a channel structure to more of a direct sales approach. Two years later, the company elected to rebuild its channel and needed a PRM software vendor.

"We were looking for better coverage of the [small and midsized business] space," said Bob Thibeault, vice president of global channel operations and programs at PTC. "Our products were maturing and we needed to focus on local customer satisfaction, which you get from having a [value-added reseller] channel."

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To ease the transition, PTC purchased software from ChannelWave. The application serves as PTC's partner portal. Partners receive recruiting and planning information, and obtain leads, training and certification via collaboration applications on the site.

PTC made the investment partly for the application's ease of use, Thibeault said. PTC runs Siebel Systems Inc.'s software for marketing and tech support, but felt the vendor still approached PRM from a CRM perspective. When PTC began to rebuild its partnerships, it initially needed to recruit, retain and demonstrate value to its new partners, Thibeault said.

It seems to have paid off. PTC has grown from 50 partners three years ago to roughly 200 today. But PTC's use of the system has since evolved.

"What we've seen is a shift in what the partners want to use the tool for: lead generation, helping them do business development and planning, and using our info center," Thibeault said.

PTC also uses the ChannelWave portal as its primary messaging tool for communications with partners, Thibeault said. For example, when PTC starts a new sales campaign, it hosts a product development session for partners that includes a series of webcasts about the product. Groups throughout the company all want to use the tool to communicate to partners.

"As PTC begins to build its channel, there are many cross-functional groups that want to engage with our partners -- marketing, tech support, global services. You have to be careful not to inundate partners with a wall of noise," Thibeault said.

PTC has taken strides to ensure the PRM system provides the information that partners need. There are links into the Siebel CRM system and back-office software from Oracle Corp. that allow partners to check on order status information.

PRM and e-commerce: A tight fit

Organizations need to understand that a PRM strategy must be able to expand into areas like e-commerce, according to Desisto. For example, Oracle's iStore has done this by integrating e-commerce capabilities, he said.

"The bottom line is, this area is now combined with e-commerce," Desisto said. "It's merged and very tough to completely separate them."

In fact, Gartner is bringing together its e-commerce and PRM groups. Whether an organization is undertaking a PRM initiative to get into a new market segment or geography, reduce costs to serve a channel, create demand within a channel or to get a handle on market development expenses, they should consider the e-commerce implications down the road, Desisto said.

PRM buyers also need to beware the pitfalls of consolidation, Desisto warns. As ERP and CRM vendors expand into the space, the smaller, best-of-breed vendors face stricter competition and the possibility of being acquired. Some of this has already occurred with the acquisition ChannelWave-Aqueduct merger.

The large vendors lag behind the niche players in functionality and buyers need to consider the tradeoffs between that lack of functionality and the tight integration the ERP vendors provide, according to Desisto. Organizations with complex requirements such as distributed order management and multiple back-end systems should continue to evaluate the best-of-breed vendors, while those with more basic needs like partner portals and lead management for a single tier of partners should evaluate the large enterprise suites, he said.

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