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November 1, 2004

12 Min Read
DAWN OF A NEW ERA

By Tara Seals

As channel sales continue to evolve to a dominant distribution segment, partner relationship management (PRM) software is coming out of the cave, too. With functionality ranging from portal-based commissions tracking to automatic online training, closed-loop lead management and e-commerce, these platforms are no longer primitive attempts to help partners do business without calling a channel manager. Now, they are civilized tools to streamline operations and reduce transaction costs, while providing a differentiator for providers competing for effective channel salespeople by improving the partner experience. For the next generation of the platforms, more sales tools and integration with other BSS systems have been naturally selected.


Master agent views from RPM Software

“Having the capability has gone from ‘great to offer’ to ‘gotta have it,'” says Ted Schuman, CEO and president of master agency PlanetOne Communications Inc., which has licensed and customized the Logicware Inc. PRM platform, resulting in the ‘AgencyLogic’ online portal for subagents.

Beyond being must-have, the level of functionality makes a difference, too. “Agents want convenience, one log-in, one portal,” says Chris Heidelberger, CEO at PRM developer ChannelWave Software Inc. “Agents face a lot of different options for who they do business with. Telecom services are somewhat commoditized. Good business processes and programs, and customization, can greatly differentiate your agent program.”

Some service providers see PRM as a way to build loyalty. “We want to invest in more communications functionality,” says Meredith Johnson, senior manager of channel marketing at Covad Communications Group, a ChannelWave user. “We can do broadcast e-mails now, but we could segment the partner base according to where they are in the partner lifecycle, or by geography, etc. So the system can automatically sign new partners up for training, or upon his or her first sale we can program PRM to send a congratulations message. Our goal is to develop communication for milestones and let them know we’re excited. If they want to build a Covad VoIP practice, we want to reward them for that.”

Good for the partner, good for the supplier defines those fittest for survival. “PRM is about improving your partner experience in a way that creates bottomline results,” says Dana Dwyer, president of RPM Software, which develops commissions and processmanagement software.

“It’s not a magic bullet application that once installed is going to fix your channel. [It needs to meet] the fundamental needs of the relationships to be supported.”

OUT OF THE STONE AGE

More and more suppliers are turning to the indirect channel, meaning the volume and complexity of managing a partner base is growing. PRM is becoming more advanced in its tool-making as well.

“It’s the hottest topic there is,” says Daniel Kenyon, vice president of communications industry strategy at PeopleSoft Inc. “The terminology of the triple play and the quad play - there’s a concept that people look to the alternate channel to distribute them and to aggregate up different services. So from incumbent carriers down to agents, we have been thinking about this onslaught of partner-distributed services. Two-thirds of all services will be delivered via partners at some point so we have to think about where the flex points need to be in our product.”

Carriers aren’t the only ones that need help. Logicware Inc. has designed three versions of its i400 software. “There’s a master agent version, a service provider version and an independent agent version, the i400 IA; it can grow, and is modular,” says Logicware President Andrew Taplin. “It’s indicative of the evolution of the master agent. These large master agents are becoming serious telecom companies. Many of them are billing a lot of dollars, and management and opex are concerns.”

Indeed, easier management is a key aspect of PRM systems development. Kenyon says the challenge for vendors is in monitoring, management and sign-up, renewals and training of all those agents in the field. “Training alone is a horrifyingly huge endeavor,” he says. “Cost is king, and it’s all about margin and driving costs out of supporting distribution and the customer base.

From the contract through training, maintaining customers and measuring success and ultimately the profitability of the relationship is the point.”

NetGain Communications, a reseller, master agent and professional services consultant, found its RPM Software-provided PRM to be critical for management. “We tried to do it in-house but we hit many roadblocks, the biggest of which was commissions calculations,” says James Larsen, founder and CEO at NetGain, which manages $6 million in telecom spending. “We’re more of a professional services company, so we need to build projects on the fly to meet the needs of our clients. We also have inhouse commissions and agents. So there are different compensation plans, at least 10, and while Excel is OK, automation allows you to hire less people. Instead of having people to do commissions (we had three), I can do it myself in four hours.”

Ron Bohm, director of master agency SelecTel Corp. and an RPM Software user, says the main benefit of a PRM system comes from making data visible to the partners. “We’ve consolidated all customer information into one database,” he says. “All our correspondence relating to pricing, orders, commissions and issues are done through the notes attached to each record. Our philosophy is to run our master agency very openly and honestly, and the PRM system allows us to share everything with our partners.

“It’s so much easier for the partners to exchange data with us now that we don’t need to rely so heavily on email and spreadsheets” he adds. “The commissions system is central to the way RPM designed their PRM so historical commission information is always available to the partners with an easy to use human interface.”

MODERN TIMES

The future of PRM development lies in the cultivation of other sales and marketing aspects, such as customer relationship management (CRM) and sales force automation, along with integration to other back-office systems and even e-commerce.


A channel manager’s home page in ChannelWave’s e-commerce-ready product

Info Directions Inc’s E-Finity product, for instance, offers a specialty CRM tool for the telecom space. “It’s a Salesforce.com-like portal for forecasting, setting up products and services, updating billing software and third-party systems,” says Derrick Van Grol, vice president of sales and marketing at the software maker. “It has user permissions on each level, from God-like to very restricted information views.”

Logicware’s Taplin says CRM-like recruiting and communication tools are a focus. “The ability to enter partner opportunities and to track them through the sales process is part of it,” he says. “You can enter an agent you met at Channel Partners [Conference & Expo], say he has X amount in billing revenue per month, and that you want to get 25 percent of that business. You can enter that you contacted them, gave a demo, that they were interested to move to the contract stage, etc., to become a won agent. So we focus on bringing CRM into PRM.”

Covad’s Johnson is using PRM to perform customer satisfaction. “We get feedback on customer satisfaction directly from the customer,” she says. “So we want to post customer satisfaction information for partners on an individual basis. We also want to provide reference guides on front-end expectations.”


Info Direction’s E-Finity offers sales force automation functionality.

More sales and marketing tools are on the table for development. “Take branding for example,” says Van Grol. “The portal can look like the agents’ internal systems. It will be closed loop, back to end user billing and helping to make the process seamless. There are multilevel marketing people, subagents, agents, etc., and we will help push that sales and marketing out to the partners.”

ChannelWave has added sales force automation capability for companies that sell direct and indirect. “We offer opportunities and contact management for internal sales and for the agents in version 6.2, so you don’t have three different systems,” says Heidelberger. This idea of integration with other systems beyond sales and marketing extends to other core business process functionality, such as billing.

“The product we launched based on Microsoft .NET has helped us become more nimble,” says Jim Lazeroff, director of marketing at Info Directions. “We can tie in with rating, billing, customer management, integration with CRM, workflow management. .NET also allows a better user interface, so we can operate securely over the Internet.”

Bohm says having better control over information has profoundly impacted his agency. “If partners are out at a sales site, they can access a customer’s complete history, including all usage, orders, quotations, issues, contracts and more,” he says. “We had an employee’s computer go down because of a disk drive failure recently.

Before implementing our PRM, we would have lost valuable customer and partner information. We avoided this disaster by having all our critical data safely and professionally managed by our PRM provider. You can tame almost any business process.” Bohm uses the system for commissions, trouble tickets, billing tickets, supplier information, renewals, organizing quotes and opportunities, order management, tracking and escalation, sales proposal management and managing deliverables for the customer.

“Full-encompassing OSS is where they’re heading,” says Larsen. “It’s your e-mail; it’s everything. It’s going more towards open-standards and being customizable, so its easier, from a template standpoint, to match your needs without spending millions [of dollars] in development.” E-commerce is another development area, spurred by merger activity in the space.

ChannelWave bought Accurus Inc., an e-commerce infrastructure company, and merged with Aqueduct Inc., which had an ecommerce platform for business-to-consumer and business-to-business commerce sites. ChannelWave plans to combine multichannel sales and marketing with integrated commerce.

Meanwhile, Allegis has merged with ClickCommerce and has spawned the eBusiness Suite, which focuses on “improved relationships and operational efficiencies within distribution channels through online commerce, channel management and partner relationship management.”

“The pure-play PRM providers have effectively become part of the B2B e-commerce space,” says Olivier Choron of Noroch Consulting. “The software now enables partners to order products online. PRM in the past handled the distribution of leads, sales and marketing, and now it’s more end-to-end. It can extend down to the customer at times. There’s 100 percent automation for ordering.”

THE MISSING LINK

Despite all this growth and development, some aspects of PRM are still missing. One future functionality many master agents would like to see is seamless integration to carrier and supplier systems.

“There’s a break in the chain between us and the vendors, and it needs to be patched,” says Schuman. “We need to upload data from servers to a provider, and we’re just beginning to do that. What’s missing is information from vendors flowing back into our system that can auto-populate our fields. So we could do automatic data sweeps for the latest, greatest information.”

PlanetOne is manually writing customizing code to adapt its system to suppliers. “We’re 12 months to 24 months out before we’ll be able to put orders online, upload to the carrier, get it back and populate the system,” says Schuman. “Their IT and billing infrastructure is so complex, and they have various billing platforms.” Getting carriers to commit IT resources to integrate systems is difficult, he acknowledges.


A master agents view in Logicwares i400 platform

“Everyone would like to have APIs into carriers and have billing systems download information into the PRM system - that’s the Holy Grail,” says Larsen. “But say they do. Even if carriers change their software slightly, they would have to build all new APIs to the systems. The cost associated with it would be prohibitive. So we have three people that help with the provisioning process.”

Larsen says the main thing lacking is the ability to reconcile commissions to billing. “I get calls that something was misbilled, because the commission wasn’t as high as it should have been,” he says. “Manually tracking this is time-intensive and makes for headaches.

Integrating telecom spending management - if they have a tool that’s customer-facing and can reconcile bills, with an API into the accounts payable system - then you’d really have something.”

At least one vendor is interested in integration. WilTel Communications Group offers Direct Network Access, a Web-based portal that presents information on WilTel’s back-office systems to provide wholesale customers with real-time information about their network services. “The economic climate in recent years has shown that the success of the customer is critical to the success and growth of the provider,” says a spokesperson. “We believe technology interaction between companies will continue to expand because it is critical to the customer’s success in delivering on business objectives and meeting end user expectations. System transparency through e-bonding and Web-based technologies meets the need for real-time information access.

Logicware tries to bring suppliers to its portal so less integration is needed. “A sub[agent] will request a quote, go through the master agent to the supplier, who will enter a price in their portal and go back through the master agent,” says Taplin. “So it’s a customer-agent-supplier methodology.

We send the carrier an e-mail, they get a link and it opens up the portal, so they’re brought into the i400. We know the carriers are difficult from an integration standpoint, so we don’t spend a lot of time getting them to allow electronic seamlessness. Instead we try to bring them into our world.”

Regardless of some developmental hiccups, the outlook for PRM’s survival as a species is good.

“Carriers have always had partner extranets, but they were built in-house, not customizable, very feature-poor and not scalable,” says Choron. “Those archaic solutions are being replaced with off-the-shelf, all-encompassing software. PRM is becoming critical. The competition is getting tougher. The software covers more aspects of carrier operators and their resellers and agents. PRM has been frustrated by a lack of recognition, but the need is astronomical, and this space will continue to grow.”

Links

ChannelWave Software Inc. www.channelwave.com
Covad Communications Group www.covad.com
Info Directions Inc. www.infodir.com
King Communications www.kingcommunications.com
Logicware Inc. www.logicware.com
NetGain Communications www.netgaincom.com
Noroch Consulting www.noroch.com
PeopleSoft Inc. www.peoplesoft.com
PlanetOne Communications Inc. www.planet1comm.com
RPM Software Inc. www.rpmsoftware.com

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