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You Got Your PRM in My CRM
How are the changes that channel management systems and their providers are experiencing going to play out?
For the rest of the July 2005 issue of CRM magazine please click here
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There is an emerging trend for CRM suite vendors and service providers to include a means for partners, resellers, and even customers to access parts of a company's CRM system. Corollary to that trend, specialized providers of PRM tools are risking doom if they don't seek alliances, either by partnering with bigger players or by acquiring their rivals. NetSuite's NetCRM Services Edition and Salesforce.com's Partner Portal are examples of the former trend; Click Commerce's acquisition of bTrade and ChannelWave, the demise of PartnerWave, and BlueRoads' partnerships with WebEx and Salesforce.com portray the latter. "The most notable part of this trend is that it's largely the hosted-CRM vendors who are announcing partner and channel management additions," says Liz Herbert, an analyst at Forrester Research. "These capabilities allow them to bridge the gap between hosted solutions and on-premise CRM systems like SAP and Oracle, which have pretty much always had this functionality." Robert DeSisto, vice president of CRM for Gartner, agrees. "PRM and channel management haven't really hit the big time with on-demand solutions." According to DeSisto, there are two separate dimensions to this issue. One is that "PRM isn't a standalone environment anymore--it has been combined with e-commerce." The reason for this, he says, is simple convenience. "No company wants to build two separate portals into their CRM system." The other factor is the cost of building new functionality into existing products. "NetSuite and Siebel will provide you with the application, so they have that much more cost and development time, whereas Salesforce.com gives you the tools to build the application." In both cases it can make better business sense to acquire or partner with a vendor who has a proven product. The question remains: Will specialized channel management and PRM providers continue to thrive like BlueRoads, or will they disappear like PartnerWave? Lawrence Lindsey, vice president of engineering for BPA software vendor Nsite, is doubtful of the segment's future. "I don't know if specialized PRM vendors will be around much longer," he says, noting that Nsite version 4.5 has integrated bidirectional Web services for CRM. "This integration lets us support traditional B2B2C supply chains, such as the automotive industry," Lindsey says. Rosie Hausler, Nsite's vice president of marketing, agrees the trend is against standalone products of this nature. "But there's a paradox in Web services like this," she says. "To the end user, it's a unified solution; the most successful PRM products aren't going to be noticeable as separate entities." Gartner's DeSisto is more positive about the future. "I believe specialists will remain strong in vertical industries, where their focused offerings fill an organization's needs better than the suite vendors can."
Forrester's Herbert recommends that when venturing into PRM implementers focus first on partners' needs. PRM initiatives are likely to fail unless they consider that: channel partners need alerts and notifications to draw them into the PRM system; leads and new product availabilities must be pushed to partners' own CRM systems to maximize their value; collaboration and e-learning tools build community--as well as competence; and, just as forcing SFA applications onto an internal sales force doesn't work, neither does forcing a PRM tool onto channel partners.
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