Re:Tooling -- Partner Relationship Management: Rousing from a Slumber

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Partner relationship management (PRM) is pretty much what it sounds like: the strategies, processes, and software tools to organize and optimize external relationships. And though PRM’s goal is to “close the loop” between you and the other companies you deal with—ensuring success across the extended business ecosystem—the surprise is that the PRM market only makes up approximately 15 percent of CRM vendors’ total revenue stream, according to Forrester Research.

“It’s been at that level for a while, and I often wondered, ‘Is it going to grow and become more important and change?’” says William Band, vice president and principal analyst at Forrester. “It seemed pretty sleepy to me until recently.”

A recent Forrester survey, however, suggests that PRM is waking up, especially among B2B companies. Listed as one of 19 application areas, PRM was cited by 28 percent of all respondents as being critical to their businesses—roughly in “the middle of the pack,” Band says. Among B2B respondents, however, that figure zoomed to 45 percent. “PRM had been a quiet space,” Band says, “but it’s [become] more critical than I expected.”

Gene Alvarez, research vice president for Gartner Research, also sees a renaissance of sorts. “From a market perspective, it had been quiet since 2004,” he says. “The on-demand vendors have managed to create hype around this space again.” That hype may have started before the recession began, but the economic squeeze will only help PRM’s expansion, he adds. “In a down economy, organizations tend to focus on sales and supporting existing customers.”

This is particularly true in the B2B space, in which companies rely on channel partners. “Companies spend a lot of money on those channels but have a hard time allocating efforts and funds to manage them efficiently,” Band says. “So the business benefit [with PRM] would be less wasted effort…to close the loop and get the right leads to the right people—and make sure they get closed.”

PRM has long been led by on-premises solutions, including Oracle’s Siebel PRM and SAP’s mySAP CRM, but on-demand offerings (from Oracle, BlueRoads, Salesforce.com, and others) are starting to creep up. “We are seeing software-as-a-service gaining traction in this space,” Band notes.

Alvarez says the rise of on-demand players reflects a prior pain point that had contributed to PRM’s sluggishness. “The enterprise-class solutions were all-encompassing, and as a result the deployments took a long time and didn’t achieve return on investment (ROI) quickly,” he recalls. “Organizations are finding with the on-demand approach they can tackle one problem, get ROI, and then build from there.”

Regardless of deployment model, Band says, pricing is still typically on a per-seat basis. Licenses for Oracle’s Siebel PRM, for example, are approximately $1,500 to $2,000 per seat, he says, while Salesforce.com runs approximately $90 per user, per month.

Adam Honig, president and chief executive officer of Boston-based consulting organization Innoveer Solutions, says that hemming and hawing over “on-premises versus on-demand” is more of an information technology issue. Companies should pay more attention to a PRM solution’s ability to play well with other systems. “A PRM tool is only effective when it’s tied into a CRM or ERP system, because there’s a lot of data overlap,” he says. “Look at integration needs first, then functionality required.”

One reason? The PRM market’s technology is typically more mature than the business practices it handles, Honig says, adding that he thinks we’re in the middle of a multiyear focus on PRM. “A lot of companies are just getting their feet wet in it,” he says. “Initially these projects will be basic, but over the next 18 to 24 months, they’ll want advanced functionality…. It will add another dimension.”


SIDEBAR: In a Perfect World…
...the core set of functionality in a PRM solution should include the following:

  • set-up and configuration;
  • collateral management;
  • partner management;
  • partner program management;
  • sales management;
  • partner training; and
  • partner analytics.

Source: William Band, Forrester Research


>> Quick Snapshot

Vendor                                Solution                                         Commentary

(www.blueroads.com)            BlueRoads 6                                    A software-as-a-service (SaaS)-only player; strong capabilities in partner lead management.
                                                                                                   Often used as a supplement to other PRM solutions already in place.

Click Commerce
(www.clickcommerce.com)      Click Commerce –
                                             Channel Management                        A lot of expertise in integrating complex partner channels; plays well in organizations that have complex technical channels.

(www.oracle.com)                   • Oracle CRM On Demand for
                                               Partner Relationship Management      An extremely full-featured PRM offering; can scale to large organizations.
                                              • Siebel Partner
                                                  Relationship Manager 8.1.1

(www.salesforce.com)               Salesforce PRM                                    Less expensive and easier to deploy than SAP or Oracle’s offerings due to its SaaS model.

(www.sap.com)                         mySAP CRM                                        A full-featured, robust PRM offering.

Source: William Band, Forrester Research


Contact Assistant Editor Christopher Musico at cmusico@destinationCRM.com.

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