Analysts define partner relationship management products

by Jim Zimmermann | Apr 23, 2003 7:00:00 AM

Tags: Partner relationship management (PRM), Business structures, Jim Zimmermann, partnership, Partner Relationship Management

Takeaway: Even after a few years, it's not 100 percent clear which functions are exclusive to partner relationship management. This week's Analyst Views column examines three sets of PRM functions and components identified by three analyst firms.

Partner relationship management (PRM) is a business strategy for improving communication between companies and their channel partners. Web-based PRM software applications enable companies to customize and streamline administrative tasks by making shipping schedules and other real-time information available to all the partners over the Internet.

As organizations continue to exercise caution in their technology investments, I thought it would be useful to see how several analyst firms characterized PRM. Here’s a look at the feature sets that they believe constitute a PRM product.

Yankee Group
Let's start our review by taking a look at an article written in 2002 by Yankee Group analyst Sheryl Kingstone, “Mapping Application Functional Requirements To Their Effectiveness and ROI.” The article provides an in-depth overview of what The Yankee Group contends are the major components of PRM. Figure A is taken from the article:
Figure A

Application components of PRM Elements Partner lifecycle management Partner profiling, matching/locator Recruitment Other (contracts, planning, training, certification, compensation, and measurement) Partner effectiveness Lead management Team selling/collaboration Forecasting Marketing program management Market development Funds management Content management Campaign management Commerce/transactional management Sales configuration and guided selling Order management Catalog Inventory management Service and support Account, service, and warranty management Knowledgebase Analytics Partner performance Partner visibility Customer visibility

The Yankee Group article goes on to describe the key functionality of each of the elements along with their business benefits and bottom-line impacts. For information on how to purchase this or other Yankee Group reports on PRM, visit its Web site.

Aberdeen Group
Going back further to a time when PRM was a relatively new concept (January 2000), Aberdeen Group created an executive white paper, “Partner Relationship Management: Building Stronger Channels in a Web-Architected World.” Figure B shows the PRM components that Aberdeen Group provided in its research:
Figure B

PRM component Description Partner administration Addresses the complexity of managing large channel and partner relationships Lead distribution Automates the process of managing, distributing, and reassignment leads Channel compensation and forecasting Tracks and projects compensation, revenue opportunities, and referral fees Content and program management Develops, targets, and communicates partner-specific sales and marketing programs, scripts, product data, etc. Reporting and analysis tools Aimed at improving the overall performance and service through the channel Training and knowledge repository Enables, verifies, and scores training, testing, and certification of partners Co-op and market development funds management Aimed at speeding the process of requesting and authorizing funds

The article provides additional insights on the benefits of these components to both the vendor and the partners. This report is available for sale on the Aberdeen Group Web site.

Alexander Group
Our final view of the key components of PRM systems, shown in Figure C, comes from the Alexander Group in its 2002 white paper, "The Channel Marketing Challenge Today—The Race Goes to the Swift":
Figure C

Key PRM functionality Description Partner acquisition The ability to identify, recruit, and acquire quality partners Partner profiling A central repository for partner profiles that becomes more robust over time Channel communications Fast, responsive communications with partners Lead distribution and management A rules-based distribution engine that seamlessly evaluates and forwards leads to partners Market development and co-op funds administration Streamline the process for distributing and administering market development funds Channel program management Facilitates rapid development, launch, measurement, and tracking of partner marketing efforts Extended team selling Allows vendors and partners to work together to close opportunities

This Alexander Group article is one of the best written on PRM recently, and it's available free of charge from the Alexander Group Web site (registration required).

No clear picture
If you review the three tables from Yankee, Aberdeen, and Alexander Group, you'll notice that there are quite a few areas of PRM functionality that appear in one company's table, but not in the others. Rather than pointing to a lack of perception by one or more of the firms, these discrepancies suggest that even after a number of years of debate, what constitutes PRM is still open for discussion.

The Gartner PRM Magic Quadrant also shows the lack of a firm definition of PRM; it shows a mixture of CRM vendors, marketing automation vendors, commerce vendors, pure-play PRM vendors, and a host of other companies. To further confuse the situation, many smaller vendors sell products with a limited subset of the features listed by the analyst firms, but the vendors still refer to them as PRM products.