Design Con 2015
This dialogue occurred on Thursday, July 24, at 2:00 p.m. EDT.

Channel sales represent an increasing percentage of revenue for many organizations every year. Across industries, companies of all sizes are refocusing on channel strategies and implementing best-practices for partner management. We've invited Joe Alphonse and Tom Howell of Revitas to discuss how to implement an effective channel management strategy and connect the dots from contract initiation to channel success.
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Have a good day everyone! Thank you all for joining us!

User Rank   Blogger

It has been great. Thank you, everyone for your time and questions. Again, if any other questions come up please feel free to e-mail me: thowell@revitasinc.com

User Rank   Stock Keeper

@Rodney...wow time flies!  Thanks so much for the opportunity! 

User Rank   Blogger

@Rodney-With retail the losses usually can be much-much higher.

User Rank   Supply Network Guru

Thanks guys

User Rank   Stock Keeper

Tom and Joe, we have reached the limits of what I told you to expect for time. Thank you very much for being our guests today!

User Rank   Blogger

@tech4people It seems that they don't realize that there is a better way to initiate the business. I had one organization who was working on razor thin margins and if they could reclaim 2% is would have been huge for their business. They were managing their chargebacks on actual physical paper. I wish I was kidding...

User Rank   Stock Keeper

Wow, @Tom. Not even retail is happy with 10% revenue leakage and they deal with theft every day.

User Rank   Blogger

@Tom-Is it that they don't know or they Don't believe its worth the Time & Expense (to after that 10% cost you are stating here)?

User Rank   Supply Network Guru

Absolutely, @tech4people. And it does apply perfectly in the situation you are asking about - trustworthy channel partners.

User Rank   Blogger

@Rodney It's funny that you mention that. When I talk to organizations and I mention the 1 - 10% revenue leakage and the response is almost always, "Oh, I totally believe that". They just happen to see as a cost of doing business because they don't know there is a better way to go about their business 

User Rank   Stock Keeper

@Rodney-I agree but I am hoping you get the idea what I was alluding to here.

User Rank   Supply Network Guru

@Tech4 - Partner trust is something that must be earned.  I've found the best partners are the one's where you have open, honest, and frequent communication.  These relationships are built over time.  But good contracts always have "audit" clauses where even the best partners can be held accountable

User Rank   Blogger

That might be not the best example @tech4people -- when the top of the channel clearly doesn't care what its partners are telling it, no amount of management would help, I imagine.

User Rank   Blogger

@Joe, I had thought we were discussing an inward looking solution, but you mentioned better visibility into partners' operations. How come?

User Rank   Stock Keeper

Excellent. So I might have jumped the gun on some of these questions -- how do you determine just how effective your current channel operations are? I assume you need to know the scope of your problem before trying to fix it.

User Rank   Blogger

In case anyone has any follow up that we don't answer, please feel free to contact me: thowell@revitasinc.com

User Rank   Stock Keeper

@Joe-But does'nt that kind of visibility mean you trust your partners implicitly? Lets look at the Target data breach as a test case.It clearly demonstrates that we can't expect the same level of Systems and Processes across Partners and contractors everywhere and all across the Supply Chain.

User Rank   Supply Network Guru

@Rodney I can hang on for ten more

User Rank   Stock Keeper

@Rodney - sure thing...I'll hang for a few more...enjoying the conversation!

 

User Rank   Blogger

@Rodney, For the manufacturer it was absolutely an error oon their part. It's a common issue of organizations being far too siloed in nature to manage complex channel agreements. The partner, however, was gaming the system because they knew the different geos didn't communicate well

User Rank   Stock Keeper

@Tom and @Joe, can you hang on until about 2:40?

User Rank   Blogger

@tech4people, I can't say you are wrong, but I can hope it.

User Rank   Blogger

@tech4People - cross sell and upsell is a natural progression of optimizing processes.  If you have visibility into partner performance you can see when and where you can cross and upsell

 

User Rank   Blogger

@Tom, in that example on has to assume it was error, otherwise there would be no incentive to change it if it was discovered.

User Rank   Blogger

@Kim I'm going to give you the worst answer: it depends. However, I will say that for any software solution there will be some level of customization 

User Rank   Stock Keeper

@Rodney-I just feel MSFT is the smart of another Nasty Layoffs season coming up.This time it will be Global.

User Rank   Supply Network Guru

@Tom-Your organization was extremely-extremely smart! No doubt about it.LOL!

User Rank   Supply Network Guru

Great question in light of the recent Microsoft news @tech4people.

User Rank   Blogger

@tech4people Absolutely 100%. Chances are people aren't focusing on their core competencies. Going the 'lean' route allows people to actually get back to their day job

User Rank   Stock Keeper

@Joe-Absolutely right! Selling faster and more effectively is the key here.

Where does Cross-selling and Upselling figure here?

User Rank   Supply Network Guru

Does a Revitas-type solution need to be customized to the vertical, or even to the specific business, or is it operating at a higher level of generality?

User Rank   Stock Keeper

@Rodney 1 - 10% is about right. Let me give you an example (with some rough numbers as not to expose the guilty). There was an organization that was giving a robust discount to one of its partners. Let's say it was 10% when they bought 10,000 units. That partner took that healthy discount and then returned 9,000 of them to a different geo and no one ever caught it. We like to think that most organizations aren't that dishonest and the mistakes are through honest error, but these things happen

User Rank   Stock Keeper

@Tom-With respect to your Lean Management answer-

One of the changes we have seen is a move towards the 'lean' methodology. There has been an increased focus in the last 5 years and it has expanded to a lot of different silos within the organization. Channel no impacts lean accounting, lean IT, and other areas of the organization.

 

I was wondering if Its possible to do this without firing folks?

User Rank   Supply Network Guru

@Rodney - Increases in productivity happen through the streamlining of contracting processes and partner on-boarding.  Imagine getting your partners on board faster and more effectively.  That gets them selling faster and ultimately drives more revenue!

User Rank   Blogger

Howdy tech4people! We still have about 10 minutes, so catch up and jump right in!

User Rank   Blogger

So @Joe, the incentive control piece seems straighforward, but how does it increase productivity in the channel?

User Rank   Blogger

@tech4people A lot! (and welcome)

User Rank   Stock Keeper

Hi folks! What did I miss?

User Rank   Supply Network Guru

@JimC, that's a good question and ties in to mine -- how does Revitas or its like handle security and compliance?

User Rank   Blogger

@JimC The ideal solution would indeed keep have change control. It avoids rogue contracting, keeps legal language intact (until the proper authorities are notified), and sets a compete process workflow

User Rank   Stock Keeper

@Rodney - this can save organizations anywhere from 1-10% of total incentive program spend.

User Rank   Blogger

@Rodney - I'll put on half my sales hat -- For the channel, Revitas eliminates over and underpayments on incentives and increases productivity in channel operations

User Rank   Blogger

Ah, the infamous "shared drive" where everything is kept and nothing good is found. Are you able to better lock down and track things?

User Rank   Stock Keeper

:) OK @Joe, no problem, I'm still to young to risk it even at 54.

User Rank   Blogger

@Kim I don't think a set it and forget it methodology is a good one. Even automated assembly plants have human oversight. Ideally, an automated solution will have process workflow built in. This would allow for checks, balances, milestone markers, etc. that need human interaction. Also, having an analytics component that allows deep dive analysis is critical 

User Rank   Stock Keeper

OK, gentlemen, without getting too sales pitchy, how does a solution like Revitas' make that channel work more efficiently? What are the key ingredients?

User Rank   Blogger

@Rodney - I could tell you but then I would have to...well you know!

 

User Rank   Blogger

@Rodney - From a compliance perspective there are a number of regulations, from government regulations (i.e. Sarbanes-Oxley) to industry specific regulations based on what your organization does (i'm thinking Life Sciences, CPG, Manufacturing and even High Tech).

User Rank   Blogger

You can drop names, @Joe, really. It's not like I am a journalist or anything (oh, wait...)

User Rank   Blogger

@Rodney. The first one that comes to mind is Sarbanes-Oxley. Most of the time the spreadsheets are located in a shared drive. There is no change control and that results in a violation

User Rank   Stock Keeper

I can see that automating channel management is a good idea, but how do you do QA?  How do you get enough human visibility into whether management is working?

User Rank   Stock Keeper

@Joe, audit trials, huh? That gets me wondering, what kind of compliance-related issues are there around channel management?

User Rank   Blogger

@Kim - Unforunately, there are a number of Fortune 500 organizations that I've come across that were managing hundreds of millions of dollars in manual spreadsheets (I won't however be telling you who :))

User Rank   Blogger

@JimC.  There are a number of mistakes that happen throughout the contracting process.  Just to name a few:  Unapproved legal terms making their way into contracts, poor approval workflows, lack of audit trails, and finally no post signature follow-up of milestones and events.

User Rank   Blogger

I can't imagine a business which wants to have real visibility into its operations, and respond promptly to partners and customers, using spreadsheets.  But I guess I'm wrong.

User Rank   Stock Keeper

Beat me to it JimC with the contract question.

User Rank   Blogger

I dunno @Tom, I know of a gaming company that ran an entire online multiplayer world on spreadsheets. :) Of course, that was back in the early 2000s.

User Rank   Blogger

@Rodney We don't think so. Ideally 'lean' works towards incorporating the most efficient methodologies to reduce waste. There is actually a synergy with the partners. One example we have seen is in the semimconductor space. Instead of the ususal supply chain, they have a 'supply tunnel' that allows greater visibility into the entire system.

User Rank   Stock Keeper

What are the key mistakes that you see in contracts? And, do you see the mistakes made by both halves of the partnership (supplier and channel partner)?

User Rank   Stock Keeper

@Kim - The challenges compound over time, and grow exponentially when put together.

User Rank   Blogger

@Rodney That stat is from IACCM (International Association for Contract and Commercial Management) and study they did. At a high level, one of the major challenges is managing all of the complexities in the channel (e.g. chargebacks, rebates, multi-tier incentives). Most of the time this is done in a very manual fashion. Organizations use spreadsheets, which tend to be error prone, to manually manage the processes. 

User Rank   Stock Keeper

@Tom, but has the move toward lean methods also added some complexity? What if different partners are using different tools to achieve lean operations? Doesn't that hurt the overall integration of the channel?

User Rank   Blogger

@ Kim  The challenges are spread across the organization.  From inefficient incentives, to poor partner engagement, through over and under payments.  This puts your organization at risk for giving away portions of your hard earned revenue.

 

User Rank   Blogger

Howdy Kim. Another good question. The channel must have some common pain points.

User Rank   Blogger

Now not no*

User Rank   Stock Keeper

Also, when I was working up the description, this stat really caught my attention - 1 to 9% of revenue can be lost through the mismanaging of contracts. Where and/or how is that money lost?

User Rank   Blogger

It would be good to hear about a couple of the main challenges facing channel management today.

User Rank   Stock Keeper

@JimC One of the changes we have seen is a move towards the 'lean' methodology. There has been an increased focus in the last 5 years and it has expanded to a lot of different silos within the organization. Channel no impacts lean accounting, lean IT, and other areas of the organization.

User Rank   Stock Keeper

Good question JimC.

User Rank   Blogger

@Rodney Revitas is a software based solution. If you think conceptually the Revitas solution sits between the ERP and the CRM and on top of the metadata with an analytic component tying it all together

User Rank   Stock Keeper

I'm curious how channel management has changed given the evolution of technology and business models over the past, say, 5 years

User Rank   Stock Keeper

Howdy JimC. Just in time, we are just geting rolling.

User Rank   Blogger

Hi Jim...welcome!

 

User Rank   Blogger

LOL, probably close enough. :) Tom, how does Revitas achieve that management? Installed software products? Consulting services? A mix?

User Rank   Blogger

good afternoon

 

User Rank   Stock Keeper

At the highest level - Revitas helps organizations optimize contract processes and validate contract terms.

 

User Rank   Blogger

Is that 140 characters?

User Rank   Stock Keeper

Revitas is the industry leader in helping organizations manage complex channel, revenue, contract, and compliance challenges

User Rank   Stock Keeper

OK, Tom and Joe, why don't we start with a Twitter-sized intro to Revitas as our guests start coming in.

User Rank   Blogger

You know, that should be a default opener for all of our live chats. I might just have to steal that.

User Rank   Blogger

So, we just have to throw this out there: the opinions expressed by Joe and myself are just that, our opinions.

Also, I may look like an attorney, but I am in fact never had any legal training. So, please do not take any of our statements as any type of legal advice.

User Rank   Stock Keeper

Howdy Tom, glad to see both guests are here.

User Rank   Blogger

We are ready to rock and roll.

User Rank   Stock Keeper

If I stop responding to questions, it might be because I have succumbed to the tar fumes, as they are resurfacing the street right next to my 2nd floor office. /cough, cough/

User Rank   Blogger

Howdy Joe, so am i!

User Rank   Blogger

Looking forward to our chat at 2pm!

 

User Rank   Blogger

Howdy Jacob, I hope you can attend as well.

User Rank   Blogger
Hope I can attend
User Rank   Supply Network Guru
Hi everyone
User Rank   Supply Network Guru
Another50 minutes to go for this interesting section
User Rank   Supply Network Guru

We're looking forward to writing the short story version

User Rank   Stock Keeper

Rich, it will be a short book, with chapters no longer than 1-2 paragraphs, written in about 30 minutes. :)

User Rank   Blogger
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