Why automation will underpin the future, of channel management

Forrester analyst Jay McBain makes his case for an automation-enabled future in the channel ecosystem space

The days of manual, labour-heavy channel management processes could be coming to an end, with at least one industry analyst suggesting the future of channel partner programs and ecosystems will be anchored on automation, flexibility, scalability and self-service.

Given the rapidly shifting partner landscape, channel leaders and business-to-business marketers in the channel sector will find it increasingly difficult to succeed with manual, human-centric processes, according to channel partnerships and alliances principal analyst at Forrester Research Jay McBain.

Likewise, those individuals and organisations in the channel management space still relying on spreadsheets to manage their partner programs are set to struggle, McBain suggested in an online post.

Returning to the prospect of the so-called “trifurcated” channel model — which played a major role earlier this year in McBain’s 2020 outlook for the channel and involves the separation of the channel landscape into influencer, transactional and retention categories — the analyst suggested that managing multiple concurrent activities without sufficient automation is no longer possible.

This is where the channel software tech stack — as McBain calls it — comes in, providing the breadth and depth of solutions needed for channel-facing businesses, particularly vendors, to better manage their partner ecosystems.

“The channel technology stack is a group of technologies that firms leverage to plan with, find, recruit, onboard, develop, enable, incentivise, co-sell with, co-market with, manage, measure, and report on partners,” McBain said in his post.

It seems difficult to imagine that the relationship-driven nature of partner engagement, along with the human touch needed to make those relationships work, will no longer continue to be an essential factor in channel management.

However, McBain reckons that automation and other technology-based solutions are already becoming a dominant factor in the ultimate success or failure of the effective management of a channel ecosystem.

“Delivering automation of indirect sales processes, workflows, and partner programs, channel software is becoming increasingly critical to a brand’s ability to win, serve, and retain its customers and partners. It’s a fast-growing market, with 59 per cent of companies increasing spending across the stack,” he added.

So, why is such specialised software essential today and into the future?

From McBain’s perspective, partner programs generate loads of data from a bunch of different internal and external systems. At the same time, data can often arrive at unpredictable intervals, and is sometimes incomplete or inaccurate.

Moreover, such data doesn’t always offer an integrated view of each partner or channel performance as a whole.

Additionally, channel programs can also be very expensive, according to McBain, with front- and back-end discounts, rebates, programs, and incentives costing anywhere between 10 per cent to 50 per cent of the overall sale.

“Vendors are quickly overcoming these challenges and beginning to offer AI [artificial intelligence]-infused, real-time, actionable insight,” McBain said.

“To accelerate performance of their partnerships, alliances, and channel ecosystems, companies are evaluating and adopting a range of contributing technologies. Often, the focus of channel technologies is to manage, monitor, and measure the partner journey while improving the overall partner experience,” he said.

The channel software tech stack, according to Forrester’s research — as outlined in The Forrester Tech Tide: Channel Software, Q2 2020 — is made up of at least 159 companies, including IBM, Oracle, Salesforce, and SAP, along with small startups delivering point solutions, across seven technology categories, which are:

• Partner relationship management (PRM);
• Through-channel marketing automation (TCMA);
• Channel learning and readiness (CLR);
• Channel incentives management (CIM);
• Channel data management (CDM);
• Channel financials, pricing, and inventory;
• And, channel ecosystem management.

Today, these even categories as a whole drive roughly US$2.1 billion in pure software revenue, Forrester’s research suggests, with the vast majority of these solutions packaged up in a software-as-a-service model.

Drawing upon Accenture research that found 76 per cent of CEOs agree that their current business model will be unrecognisable in the next five years, with ecosystems being the primary agent of change, McBain suggests that the number of partnerships, whether transactional or non-transactional, will grow exponentially over that time frame.

This change will, of course, be accompanied by new partners needing to be found, recruited, onboarded, educated, trained and incentivised. As such, having the tools necessary to support and promote products and services at scale is essential.

“The future of channel partner programs and ecosystems will be anchored on automation, flexibility, scalability, and self-service,” McBain said. “The effective use of technology tools is no longer optional — ecosystems don’t run on spreadsheets.”

RESSELERNEWS / Balkantimes.press