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Cloud-Based Channel Data Management By @Dan_Blacharski | @CloudExpo [#Cloud]

Managing a large reseller network is a little like herding cats

Cloud-Based Channel Data Management Solutions

Large technology manufacturers that focus on channel sales through distributors and resellers have traditionally operated with informal processes, using tools like spreadsheets and information driven by anecdotal stories from channel partners, unstructured data, and the "gut instinct" of channel sales managers. Too often, the result is an unacceptable level of inaccurate payouts and leaky incentivizing, stock-outs due to lack of insight into inventory, and missed revenue opportunities.

These old school approaches to channel management are undergoing some radical transformations, by necessity. Public companies have an especially heavy burden to ensure accurate channel management, in response to SEC revenue recognition rules designed to avoid channel-stuffing. Even privately held corporations are seeing the results of this change in channel management practices. Private equity firms are holding their portfolio companies to a higher standard, and smaller manufacturers are looking to refine their channel programs to meet the continuing challenges of low margins and increased competition.

This shift increasingly involves data-driven channel management and a high degree of automation that validates and enriches the incoming channel data, while combining a services component to resolve inaccurate or incomplete information reported by channel partners in the field. In addition, closer attention is being paid to the "long tail" of the channel.

What Are Your Resellers Doing? The Cloud Knows
Managing a large reseller network is a little like herding cats, and a cloud-based channel data management system may turn out to be the perfect channel wrangler.

"Traditionally, most companies haven't had the accuracy and visibility they need regarding channel partner inventory to truly understand what is physically in that channel inventory," says Ted Dimbero, Chief Customer Officer of the cloud-based channel data management firm Zyme. "They were making a lot of guesses, and sometimes that doesn't work. When you have new products, there's a risk in how much inventory to put into the channel, because you're not sure if it's going to sell. On the other side, revenue can be lost through stock-outs and lack of available inventory. The key is to gather more detailed channel inventory down to the store level. It allows companies to respond in real time to inventory that may be building up, or inventory that is rapidly selling so you can avoid stock-outs."

Achieving that level of granularity in an informal and far-reaching network is challenging, to say the least. Getting accurate information, in the right format and on a timely basis, often rests with thousands of individuals who may be independent-minded and reluctant to spend time filing paperwork when they could be talking with customers instead.

Managing a large reseller network requires as much automation as possible - automation that is integrated into a decision support framework based on a sophisticated analytics platform that allows decision-makers to see in real time who is selling what, where.

Analytics and cloud-based data collection have advanced to the point where large amounts of data, even when unstructured, can be collected, parsed, and analyzed in real time to deliver greater visibility. But analytics is only part of the solution. Reports coming from a large network of independent partners may often contain inaccuracies or overstated POS information, might be filed late, and are likely to be missing the type of granular data that ultimately makes a difference in the bottom line.

The solution lies in pairing an automated data management platform with a staff of human data stewards who understand the manufacturer's channel program and product line and are able to manage data quality and exceptions. A data steward essentially acts as a type of human middleware, cleansing data and resolving problems. The result is a better and more accurate picture of the channel, and an early warning system that catches and resolves issues before they turn into disasters.

The Sales Channel's Long Tail
Manufacturers with multiple SKUs, short cycles, and a large network need to know the amount and location of products at any given moment to avoid inventory problems. But accurate data is also important as part of the incentivization and rebate processes. It's not unusual for a large manufacturer to invest most of its resources into a small number of high-performing channel partners, following the 80/20 rule, which sends most of the resources to partners who bring in most of the sales.

The problem with that approach is it ignores the long tail, and the result can be enormous waste, improper payments, and lost market share. Rather than devoting 80 percent of channel resources to 20 percent of channel partners, a micro-targeting strategy based on more accurate data throughout the network would deliver better results.

Reduced Risk, Lower Costs, Higher Revenues
To summarize, a better channel management program will:

  • Address the "long tail" of the channel, devoting time and energy to the entire program, not just the top performers.
  • Include a combination of technology-based analytics and data collection, validation, and enrichment with a corresponding human-powered data steward program.

There are three concrete benefits to this approach. First, an increased ROI can result from better inventory risk management and increased visibility because of fewer write-offs and stock-outs. Second, manufacturers benefit from cost reductions due to more accurate channel information. And third, manufacturers gain more revenue opportunities with increased visibility into seller activity. Granular details down to the store level, for example, allow a manufacturer to know what is selling in each location, and to respond with appropriate inventory adjustments.

More attention to every part of the channel is essential to staying competitive. An effective solution to this is a cloud-based channel management platform with a complete ecosystem of applications to manage and monitor market development funds, partner rebates, and loyalty programs. Such a platform, that validates and enriches the incoming channel data, along with human data stewards to manage the exceptions, can address the most vexing channel sales problems facing manufacturers today.

More Stories By Dan Blacharski

Dan Blacharski is a thought leader, advisor, industry observer and PR counsel at Ugly Dog Media, and author of the book "Dotcloud Boom." He has been widely published on subjects relating to customer-facing technology, fintech, cloud computing and crowdsourcing. He lives in South Bend, Indiana with his wife Charoenkwan and their Boston Terrier, "Ling Ba." Follow @Dan_Blacharski

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