Channel Analytics and the $1.5 Trillion Question in High-Tech Partner Sales | ZS

Insights

Channel Analytics and the $1.5 Trillion Question in High-Tech Partner Sales



John DeSarbo, Principal

The $1.5 trillion question: How can analytics improve high-tech channel partner performance?

There's two-thirds of technology revenue flowing through an indirect channel. That's $1.5 trillion. There's a lot of money at stake. And a lot of money can be lost if vendors are not able to pick the partners that are going to succeed.

As consumers, customers are actually changing the way they consume IT, increasingly demanding solutions, integrated solutions, and IT as a service. That's putting pressure on channel partners to change their business model. As a result of that, some of those channel partners are going to survive and some won't.

Some estimates are that there'll be tens of thousands of channel partners that will fail over the next couple of years.

The channel analytics, simply put, is just using data that you have for your customers, your channel partners, and internal systems to make better decisions.

With all the change that's going through the IT channel right now, essentially if you don't have data, you're essentially trying to figure out who's going to win and who's going to lose by using the equivalent of a sun dial and a rusty compass. What they need is a GPS system that actually uses hard data to tell them where to go.

What are the main challenges in building a channel analytics program?

We see companies wrestle with three fundamental challenges when they're looking to improve their channel analytics capabilities.

Channel analytics challenge #1: Siloed data

First of all, data. Unfortunately, for years, channel managers have been encumbered by the fact that their data is either locked away in siloed systems that aren't well-integrated or just not available because channel partners haven't been able to provide the information that's needed.

Channel analytics challenge #2: Skills facilitating operational excellence do not translate into analytical expertise

Channel operations organizations have been set up primarily to focus on managing the programs that are in place, managing the policies and programs that they need to run their channel programs day-to-day.

So as a result, the individuals who are in place to actually conduct channel analytics simply don't have the skills that are needed.

Channel analytics challenge #3: Vendors and channel partners not sharing critical data

And the third is trust. Many channel partners have been reluctant to share information that vendors need to make better decisions and also reluctant to take on the advice that's given to them by those vendors when they actually do connect analytics.

How can high-tech companies improve their channel analytics programs?

First of all, they make channel analytics a strategic priority. They invest in new business intelligence and analytics tools and applications. They look to staff up with the skills that they need, in many cases using third parties to supplement their team's own capabilities.

And then perhaps most importantly, they look to reinvent their channel programs to really put emphasis on channel analytics.

We're seeing is industry leaders, such as Cisco and Sage, [for]  example, are essentially using channel analytics and the channel analytics engines that they've developed to mine their partners installed base data to identify promising up- and cross-sell opportunities, and then directing their channel partners to pursue those opportunities.

In this way, they're actually looking at using their analytics capabilities to generate incremental revenue. Beyond efficiency, they are actually growing their business channel partners' businesses.