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Channel Optimization
Performance of the extended enterprise depends on its partner channel when effective sales and customer service requires extensive knowledge. When the channel is also large or franchise-based, the partner channel creates additional, unique performance improvement challenges:
- It becomes difficult to measure and anticipate performance outcomes.
- Complex processes govern interactions. Multiple systems, data sources, and platforms increase costs.
- The extended enterprise lacks direct visibility into the day-to-day activities of a partner.
- Knowledge and information is fragmented across the channel.
Technology Investment Strategies for Partner Channels
A strategic framework that integrates key areas where technology investments can be made provides a roadmap to improve the performance of large, knowledge intensive partner channels:
- A causal network analysis provides a basis for understanding what factors have the greatest impact on performance.
- Balanced scorecard, where metrics correlate to performance, tracks progress against objectives and provides a single point-of-truth for the enterprise and all its partners.
- Channel portal with single sign-on and common processes and data increases operational efficiency and visibility.
- Knowledge transfer through an extended, enterprise-wide learning and certification system ensures that channel partners can easily acquire the understanding and information they need to meet objectives.
Causal Network Analysis Reduces Complexity
In a partner channel many activities contribute to performance. Which activities does the enterprise attempt to manage and to what degree? Identifying what factors actually affect desired performance narrows the scope of partner activities that must be managed by the enterprise, reducing both the complexity of the relationship and the administrative effort required to influence the partner's performance.
A statistical analysis of performance data and other information can help map channel partner activities, their impact on each other, and their impact on organizational performance. Statistical models, such as structured equations, can help predict the way in which influencing these activities in one way or the other will impact desired behavior (such as key performance indicators). BI applications such as dashboards can be developed so partners can leverage these statistical models to make more informed decisions based on their local situation.
Balanced Scorecard Links Actions and Results
As an example of a BI dashboard that can leverage statistical models, consider a dealer scorecard in the automotive sector. A dealer scorecard can track metrics such as customer satisfaction index or service satisfaction index, and maintain performance accountability. It becomes a much more powerful tool to manage interdependent activities and performance if it has the following features:
- Metric scoring pertaining only to those that can be acted on to improve performance
- Drill-down capability to view supporting data detail for performance scores
- Linking performance scores to action items that impact performance
- Accounts for regional economic differences and other environmental factors beyond a partner's direct control
By identifying the activities that matter for performance, a causal mapping or some similar statistical analysis narrows the scope of a scorecard and links those scores to action items to improve scores.
To address the second and third challenges effectively, the portal must be performance-driven. What differentiates a performance-driven portal from other channel portals is an alignment to performance objectives that have been set for the entire extended enterprise, not just the corporate headquarters or just for the partner channel. In addition to centralizing data and information, business applications in the channel portal promote the knowledge transfer and other activities that positively impact performance aligned with those objectives.
By incorporating a wide range of business, activity, and demographic information as underlying metrics, the scorecard can also provide supporting data for outcomes and adjust scoring according to local factors. For example, rather than creating a score based solely on revenue generated, the scorecard could adjust a revenue-based score up or down based on its location. (To achieve a 100% sales score, a dealership in a more affluent neighborhood should be expected to generate more revenue than one in a less affluent neighborhood.)
The combination of statistical models and a well-designed scorecard application makes it easier for both the enterprise and its channel partners to measure and anticipate performance.
Channel Portal Establishes Common Operations and Tools
By launching a portal for a specific channel of partners, an enterprise can begin consolidating the different systems and data sources used by partners. A channel portal provides a common platform to automate workflows, integrate business processes, share information and data, and create collaborative environments. Business intelligence data can be stored in centrally-located databases to ensure that all members of the enterprise and the partner channel have timely access to the same data at the same time.
Knowledge Transfer through an Enterprise-Wide System
An enterprise-wide learning and certification management system is one type of application that can be implemented through a channel portal to consolidate knowledge transfer. Since the enterprise cannot apply the same management controls to affect how day-to-day activities are performed, certification and incentive programs become an important tool.
Certification programs help ensure each partner's staff and managers have the right knowledge to perform activities well and consistently. Administering certification programs, however, can be time-consuming. An online learning and certification management system cost-effectively tracks employee skill sets and provides a system that centralizes training management, whether it is attending a seminar, on site training or online education courses. It can help minimize the administrative burden of oversight by corporate headquarters.
Any top-down certification-based approach should be balanced with in the trenches learning, developed by the partners themselves, and knowledge transfer that is not based on training. Portal applications, like a dealer scorecard, can promote the sharing of business intelligence among partners and with corporate headquarters. Information and knowledge from a wide range of partners can be analyzed to see what statistically-validated patterns emerge. New best practices with more universal applicability to process or performance improvement can be incorporated into training and certification programs.
Kurt Crisman is director of marketing for Latitude Consulting Group, which specializes in large-scale business partner portals for Fortune 100 companies. You can reach him at kurt.crisman@latitudecg.com.
John Zonnenvald is a senior consultant for Latitude Consulting Group, which specializes in large-scale business partner portals for Fortune 100 companies. You can reach him at john.zonnevald@latitudecg.com.
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