CIO Perspective: When Your CMO Asks You for Point of Sales Data Collection and Channel Data Management
If your company manufactures products sold through distribution, your marketing organization will one day ask you to help select and implement a comprehensive data management solution to collect, analyze, and act upon point-of-sale information and other valuable market intelligence collected from your sales channels – the distributors and resellers who deliver your products to end customers.
Channel Data Management (CDM) frees highly valuable intelligence previously locked in streams of unreliable channel reporting resources – spreadsheets, complex EDI feeds, and erratically reported data from channel partners. Once unlocked and cleansed, this data can be quickly put to work to improve the management of key business processes across the enterprise.
The impact of a modern CDM system can be substantial. ROI is produced by accelerating channel sales through identifying new sales opportunities faster, and by detecting marketing incentive over payments as high as 15 percent, thus significantly reducing marketing costs.
As you survey the available CDM options, you’ll find you have a variety of vendors to choose from – some old, some relatively new. Some are very small, and some are mid-sized with strong enterprise customer references. The best-of-breed solutions will optimize cloud performance with a true SaaS offering. Others in the industry will create multiple custom instances of their platform for each of customer, so they’re not single instance code-based–a potentially significant disadvantage when it comes to upgrades and maintenance.
Some CDM applications are engineered to ensure the lowest total cost of ownership, by taking advantage of the true economies of scale that SaaS technology offers. This also allows them to deliver faster time to value, because they can leverage their learning and best practices across multiple customers as the solutions evolve and improve.
When considering a CDM platform, you should seriously consider one that offers a robust managed service on top of a world-class platform. A best-of-breed platform will fix and correct most of the exceptions, but because this process is inherently complex, there will be some remaining issues that require human attention. If you select a company that doesn’t offer a managed service, you’ll be stuck resolving all of those problems yourself. They will give you all the channel data they collect, as well as all of the exceptions, and you will be required to deploy a team of analysts to sort through the exceptions, call your channel partners to determine what they actually meant, correct the errors, and then add the corrections to the database. This is not something that you will likely consider time well spent, but it’s amazing how many companies tolerate this shortcoming of older, outdated, commercial CDM solutions.
The best CDM platforms automatically collect all POS data from your channels, perform the data cleansing and enrichment, provide a data feed out, and deliver an evolving, tailored solution that is continuously improved based on the specific needs of your global channels. Because of the nature of connecting to thousands of channel partners, it’s important that the platform is highly flexible in accepting data from partners in multiple formats, and from different systems located anywhere in the world.
A few CDM companies deliver extremely high data accuracy, near 100 percent, in terms of partner identification and sales data collection. The more robust platforms are self-evolving. Some include a global channel directory with a comprehensive list of all the channel partners in the technology industry – all of the major distributors, retailers, and resellers. When your sales data comes in, the reseller, retailer or partner is matched with this global channel directory to catch and adjust variations. The data you collect one day can be made more accurate by comparing it to other data you’ve collected over the previous year.
Analyst profiles of the vendors that offer off-the-shelf Channel Data Management solutions show that the most entrenched companies include a global directory of 750,000 reporting channel partners in over 200 countries, and collect more than 20,000 data feeds per week. It’s a good idea to make sure the solution you choose can adequately scale to fit your global needs, and rapidly delivers data to business users in near real-time, with little or no delay.
Manufacturers are continually working to eliminate inefficiencies, reduce costs, and drive additional revenue through their channels. Channel Data Management helps them achieve this by improving the immediacy and accuracy of sales and inventory data to more effectively measure current demand and balance the flow of inventory.
Channel managers can get closer to the edge of the channel and determine who is buying your products, why they are buying, what needs to be done do to move more inventory, and how buyers can be influenced in more positive ways. Retailers, resellers, and value-added integrators have a significant influence on what is ultimately sold – and the newer CDM tools enable channel sales people to identify, monitor, incentivize, and assist channel partners to close more deals and drive more revenue.
With CDM, channel sales people are uncovering revenue opportunities sooner by monitoring and nurturing individual opportunities – and preventing potential lost revenue before they lose it from resellers who are declining or switching allegiances. Financial managers are better enabled to find non-productive incentive expenses. For large manufacturers, that can mean many millions in marketing cost savings.
There’s also a compelling ROI associated with inventory risk, both for write-offs and stock-outs, and a powerful upside for cash flows and balance sheets. Industry analysts who have performed financial studies on companies using CDM have discovered a potent ROI being realized – conservatively 200 percent per year by one prominent electronics manufacturer that deployed CDM, and even higher for others.
* * * * *
Ted Dimbero is co-founder of Zyme Solutions, the global leader in the emerging channel data management (CDM) space, delivering the intelligence that global companies need to accelerate channel sales and improve incentive program ROI. Previously, Dimbero served in various information technology and development roles at i2 Technologies, and was the head of information systems for Hitachi Semiconductor America. He also held management and engineering positions at Harris Semiconductor, where one of his business transformation programs was awarded the Franz Edelman award for management science achievement.He earned an MS in Computer Science from Florida Institute of Technology, and a BS in Computer Engineering from the University of Florida.