Anything that reduces the sales cycle and/or increases revenue in the context of a joint go-to-market activity by two or more companies can be said to be a form of partner relationship management.

We can define PRM thus: an alliance management approach, supported by tooling to manage the process of information exchange between the partners in a joint sales cycle.

Going to market with partners is a very common phenomena (which even works sometime) – provided the partnership is well thought out. Within the concept the normal rules apply in terms of managing a formal alliance: such as complementarity, agreed and shared objectives and clear rules of engagement with the client to name but three. Provided a good basis for partnership is agreed benefits can accrue to the partners:

• Completion of a total package for the client – an SI with a major software house can provide a credible total solution for the client (Partners bring complementary assets to the table).
• Faster time to market – particularly for software vendor’s new releases or extensions.
• Maximising sales productivity and potentially faster closure cycles – in general an enhancement of the sales channel effectiveness can be expected.
• To obtain access to new verticals, for example a partner who may lack vertical experience in say, finance, can piggyback on a partners expertise and credibility in this area.
• Better reach and access to the installed base of the partners. This latter point seems to be one of the main reasons for partnership in some software houses, indeed the sole raison d’etre for their partnership.

Some issues to consider:

• How to manage multiple partners/suppliers. Need good transparent sales pipeline process from lead to bid/win that is fair to all parties.
• Rules of engagement need to be clear up front. For example if there is an agreement to go into a certain client no introduction of competitors or cross selling of alternative products may be a precondition. This is difficult if the client demands an alternative – do you as a partner turn down the sale?

• Playing fair rules on sharing opportunities. Partnering must be win-win. If only the installed base of an SI is the objective and no new leads are brought to the table the partnership will not go very far – similarly access must be given and active selling in by the SI attempted. My own research into alliances shows that both sides must bring (i.e. deliver) clear value to the table and not just feed off the other.

Tooling
It is difficult to see how just giving access (via an extranet for example) to the lead company’s CRM or core ERP is sufficient in terms of tooling to support the sales and marketing cycle. For one thing we must remember that there may be many, up to several hundred, ‘partnerships’ on the go at any one time. Making it critically important that we organise the exchange of information – perhaps limiting partner’s access to that part of the client base the two have agreed to pursue. An interesting point is who ‘owns’ the PRM system and information – who is the lead? (Not forgetting we are talking many to many relationships). Are all companies to set-up PRM’s that communicate with each other?

Several of your partners will be keen competitors and protection and control of access to information, to which they are entitled to, will be critical. Furthermore, the type of information, basically supporting the sales cycle, is often required in quite different ways and formats to that which is held to cover more issue based needs, such as in a CRM. Careful monitoring of how the partners are exploiting the market channel how the sales pipeline is evolving and how the partners are performing, (potentially across many partners, sectors and clients) demand different approaches to information management.

In the US there has been some work in developing specific software tooling to support partner based sales cycles but as yet there is little penetration here in Europe/UK. And there is little evidence that anyone is using PRM in any substantial way beyond simple lead registration. Furthermore the classic CRM vendors are adding functionality at a speed to cover PRM so we can expect some hype and sales push in this area.

Basically it all boils down to developing a process to manage partners in a joint go-to-market initiative. These types of process are well known (at least in theory) but are only practiced sporadically. We see that most ‘partnerships’ are not strategic at all but are product sales based, with limited objectives, (to gain channel access for example) at least in Europe. Can we really talk of strategic partnerships - find me a major system house with no ‘strategic partnership’ with any of the top ten software vendors. Joint marketing, true partnership (only two way), going together in a sales way to market is very rare and as long as it remains so the potential for PRM will remain stunted.


Roy

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Royston Morgan