Manufacturers and Their Channel Partners Profit From Data-Driven Insights
REDWOOD SHORES, CA–(Marketwired – Jan 13, 2016) – For decades, the relationships between manufacturers and their channel partners were based on trust, and a mutual interest to maximize revenues and profit margins. But, too many times, not enough was known about how products flowed through the channel after they left the manufacturer’s plant. The pathway from manufacturer to partner and on to the end user was dark and mysterious, and not conducive to optimal performance.
Today, the emerging discipline of Channel Data Management (CDM) drives the business dynamics that ensure that product data is accurately tracked through the channel, and all the way to the ultimate customer. The business intelligence gained from modern CDM, coupled with associated best practices, improves channel results, and optimizes a wide range of channel processes.
CDM Summit Draws Attendees from Cisco, GoPro, Symantec, VMware, and Others
At the recent CDM Summit in Silicon Valley, channel performance experts from Microsoft, HP Inc., Accenture, and IDC described the transformative power that CDM injects into the manufacturing sector.
Executives from companies such as Brocade Communications, Cisco, GoPro, Logitech, Honeywell, Symantec, VMware, and others learned about the events that forced Microsoft to think differently about their channels. The introduction of the Microsoft Surface Computer into a competitive, constantly evolving market impacted the supply chain, sales compensation, incentives, and finance.
“Data matters, and it matters at the most senior levels,” explained Frank Martin, senior program manager at Microsoft.
When Microsoft acquired Nokia, the Zyme CDM platform caught the eye of Microsoft officials. Nokia has been a strong client and successful user of Zyme CDM.
“We learned that data is the common denominator, whether it’s marketing information, sales, loyalty programs, supply chain, or financial compliance,” Martin added. “We wanted to make it easier for our channel partners to do business with us.”
Microsoft has introduced Zyme CDM to some of its 3,000 managed partners, and tens of thousands of others to potentially be added to the CDM platform in the future. The company’s initial use of the Zyme platform has begun to deliver key business intelligence.
Martin cited a huge Zyme platform benefit. “Before we pull data in, it’s clean, it’s standard, and it hits our systems without making it hiccup.” In addition, he said, the company reduced its manual data submission failure rate from 50% to almost zero, and improved on time reporting of channel data more than fourfold, to 85%.
IDC Research: Must Move from Intuition to Data-Driven Insights
At the CDM summit, IDC Research Manager Gerry Murray released the results of IDC research into manufacturer-channel relationships, and found “there’s a lot of very sloppy decision-making through the whole channel chain of decisions that goes from corporate, to channel, to sales, and to management. Data is the way you fix it.” He also told the Summit audience that “ad hoc, fragmented, periodic reporting” must be replaced by “data-driven insight.”
The IDC report, “Channel Data Management: Enabling Data-Driven Decision,” listed a number of key benefits of CDM, including:
- Higher channel revenue
- Decreased inventory costs
- Improved marketing effectiveness
- Rationalized partner investment
- Increased compliance
Murray told manufacturers that only they have the data drawn from CDM to “rethink the whole partner relationship, to transition from a fulfillment model to an enablement model.” He believes that as channel partners become more than just fulfillment houses, manufacturers will become strategic channel advisors. Companies can become advisors with a wealth of data, improved visibility into channel sales, and richer insights from their partners, enabled by CDM.
The IDC report, commissioned by Zyme, noted that information sharing would succeed only if there is an effective policy to avoid releasing partner data that aids competitors. Follow this link to download the IDC report: http://goo.gl/ntcEac
Legendary Technology Pioneer Moves to Zyme CDM
HP Inc. (formerly Hewlett Packard) the newly created personal computer, printer, peripherals and services company, is starting this newest phase of its 76-year history with the addition of Zyme CDM. The vast majority of HP’s revenue, about $40 billion, flows through indirect sales channels.
“We are really focused on how we can simplify, how we can transform, how we can standardize, so we can move forward in this new world of Channel Data Management,” Gillian Campbell, director of channel data management at HP Inc. told the audience at the CDM summit.
HP Inc. has 270,000 partners, of which it is currently collecting data from less than 10%. Instead of many incompatible legacy tools, HP now has the Zyme platform as “a single vision around how we approach collecting data, and how we are going to use it,” Campbell said.
Campbell expects a 25% improvement in operational costs at HP Inc. when Zyme CDM is implemented starting this spring. Of potentially greatest impact is a reduction of partner overpayments and duplicate payments. She estimates that the company can save at least 1% of several billion dollars in discounts and incentives paid to partners.
Campbell is counting on Zyme and Accenture (as a system integrator) for data stewardship, thought leadership, and innovation, as more than 600 professionals are working on HP’s CDM implementation.
Accenture and Zyme: CDM Integration Partners
Jason Angelos, managing director of the Marketing and Sales practice at Accenture told the CDM Summit “the expectation of channel partners is that manufacturers are going to become more of an insight engine to them.” This “datafication” will allow them to not only know which partners are performing well today, but also determine which ones are driving the next generation of growth, which Angelos said, will “inform so many wonderful things.”
Zyme Founder and CEO, Chandran Sankaran, who served as moderator at the Summit, sees six broad pillars of value from CDM:
- Inspect and verify that partners receive accurate incentive payments.
- Determine what is being sold by whom and where and reward channel managers based on sell through.
- Commit marketing dollars based on performance and determine if new marketing techniques will aid sales in certain regions.
- Get a better handle on inventory and logistics to avoid write downs, expensive rush shipments to partners, and product shortages.
- Gain insight into whom the end customers are to offer upgrades and product/service renewal, and to upsell.
- Reduce financial risk and increase compliance with accurate and timely reporting from the channel.
Sankaran said one-third of Zyme’s customers, the larger ones in particular, have established formal data steering processes, which often include sales operations, channel marketing, and IT.
More information about Zyme and Channel Data Management, please visit: http://www.zyme.com/channel-data-management