Optimize = to make something function at its best or most effective, or use something to its best advantage.
Executives are constantly looking for ways to optimize different parts of the business. Accordingly, as channel management professionals, we must ask ourselves – can we optimize?
For companies that sell through indirect channels the problem of optimization is complex. These companies face the unique challenge of not having sufficient visibility across the channel to accurately identify the end-customer, let alone who the second tier resellers are, in their sales chain. Add to that the need to manage incentive programs, correctly position channel inventory, eliminate gray market activity and address a variety of other pressing channel issues, and you face the near impossible task of intelligently and cost-effectively targeting scarce resources on the right problems to maximize channel ROI.
Following are four reasons that companies say “No, we can’t optimize” and some ways to overcome these challenges and get a step or two closer to achieving channel optimization.
Top challenges to optimizing the channel:
1.) Resources – Budgets, people, IT support, compliance requirements. Resource constraints always top the list in any discussion about changing processes or procedures. Almost all organizations face a variety of factors that impact resources, particularly today.
2.) Time/Complexity – As more and more companies turn to indirect channel sales to increase market coverage, accelerate time to market, and reduce direct sales costs, channel complexity increases as well. Combine this complexity with shortened product lifecycles and increasing global competition, and you have a recipe for poor channel visibility and the proliferation of manual reporting and processes.
3.) Unifying all stakeholders – When it comes to the channel and the customer there are always several internal organizations that have a stake in, or are impacted by, channel business processes: sales, marketing, operations, finance. How do you bring all of these groups together when looking at improving channel operations.
4.) Where do you start? It is often times easier to maintain the status quo rather than overcoming the challenges on this list.
Next, we will examine the top ways to overcome these challenges and start to achieve optimization.
