Companies (especially in high technology) that sell through an indirect channel face a difficult challenge because global sales channels are complex, fragmented and changeable, with different business practices and customs than direct channels. Keeping track of which products have sold in and sold through which partners can be a difficult task. Unless a company is working with only a handful of channel partners, just collecting the data is time-consuming. Not only is the data complex, much of it is taken from disparate IT systems of individual channel partners. They report their data at different times and in different ways using a mishmash of data structures, aggregations and nomenclature, so companies have to go through a data-cleansing step to acquire a consistent data set with which to work. Yet having accurate, detailed and timely data is important to both the day-to-day and strategic management of a corporation. Without that, it’s hard to manage customer and partner relationships effectively and have a timely, accurate view of aggregate indirect channel sales and inventory positions.
Not having reliable, complete or timely sales information from indirect channel partners can delay revenue recognition, lead to inaccurate reserves for returns or cause material errors in inventory valuations. It can impair a company’s ability to do sales planning, market analysis and channel partner effectiveness assessments and is part of an overall sales performance management program which my colleague recently articulated. And the lack of visibility makes it difficult to understand which incentive programs are working and which are not. Thus companies may be missing opportunities to give their best partners better treatment or to attract new ones. Compensation and incentives also are much harder to manage accurately because of missing information and long time lags between when events occur and when reliable data is available. Both sales people and channel partners are unhappy if they think they have not been properly credited or if waiting for information extends delays in payments. Moreover, there’s an asymmetry when it comes to compensation: Sales people and channel partners never complain when they are overpaid, which inflates costs, requires time and effort to correct and can produce hard feelings.
I think there’s a broader issue at play here, too. The lack of timely, reliable channel data makes it harder for company executives to design and execute channel-based strategies and to manage the day-to-day business. It may not be possible to ensure that the right resources are applied to the right channel partners. Measuring results in an accurate and timely fashion may be infeasible to support the kind of agility required to compete effectively in dynamic markets. Moreover, it’s difficult to manage any organization well when information is not immediately at hand. In other words, channel data visibility is important for the CEO, COO, CFO and the finance department, as well as the sales and channel management organization.
It’s not that companies haven’t been trying hard to get the channel data they need. Until recently, however, they have had to make do with improvised and imperfect solutions. Now, however, Zyme Solutions offers an array of products that help companies manage their channel visibility more cost-effectively. Its TrueData enables companies to capture validated worldwide channel data from hundreds partners and end customers. Its TrueID enables them to identify their channel partners and end customers and match them to point-of-sale transactions. TruePay automates the validation of an organization’s channel incentive programs, allowing for faster and more accurate compensation. Zyme dashboards – and the Zyme Analysis Portal – enable companies to present data in the most effective fashion, along with the Tech Channel Index that companies can use to benchmark their performance. ChannelView brings channel visibility into a company’s CRM system (Zyme has prebuilt integration with salesforce.com) that was brought to market in 2010. Zyme also offers professional services support with its data steward services.
By specializing in providing channel visibility and focusing on the technology sector, Zyme Solutions is able to achieve economies of scale that it can pass on to its customers. Few companies on their own have a scale of operations that can support or justify the investment required to ensure channel data integrity. Consequently, they wind up making do with what they have, which often fails to provide sufficient visibility. In this context, it’s not surprising that within the high-technology vertical market, Zyme’s most common competitor is the desktop spreadsheet and other home-grown solutions.
I recommend that companies with dynamic product lines that use worldwide indirect channels – especially those that are in the technology sector and/or use salesforce.com to manage their indirect channel partnerships – compare the cost and quality of Zyme Solutions’ channel visibility offerings with the quality and timeliness, as well as the direct and hidden costs, of the data they currently have to work with.
Robert Kugel - SVP Research