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Ready for PRM Time?

Companies that need to talk to companies are the luckiest companies of all.

These days, corporate executives banter about “relationships” more enthusiastically than a gaggle of guests on “Oprah.” They also seem willing to put their money where their buzzwords are: Customer relationship management (CRM), for example, is now a $13 billion industry growing at 20 percent a year, according to research firm Aberdeen Group.

As important as relationships with customers may be, there are other constituents to please. Various “partners,” whether in the supply chain or the sales channel, often have needs–and present opportunities–that can be satisfied through specially designed software. That, at least, is the argument put forth by makers of PRM (the “P” is for partner) software, which tries to exploit aspects of business relationships that traditional CRM and sales-force automation tools miss.

To date, PRM has gained most of its traction among high-tech firms that rely on channel partners to sell products on their behalf. Motorola Inc. is a perfect example. The company depends on paging and cellular carriers such as SkyTel and MetroCall to sell its two-way pagers to businesses and consumers. But because Motorola has such a strong brand name, these end customers often come directly to the company for its products. Traditionally, Motorola passed these leads on to the carriers and left it to them to satisfy customer demand, but had no way to measure follow-through.

Now, using PRM software from ChannelWave Software Inc. (one of the industry leaders, along with Allegis, iMediation, OnDemand, and PartnerWare), Motorola can capture inquiries at its Web site, route them to the appropriate carrier based on various criteria spelled out by the potential customer, and track the results. “One benefit of this PRM system,” says Allan Spiro, marketing manager of Motorola’s Wireless Messaging Division, “is that it shows us which carriers are living up to our expectations.” Spiro says that while so far no carriers have been dropped for failing to capitalize on leads, such action is not out of the question.

PRM can do more than pass along sales leads; some companies are using it to push training and product news out to those that resell their products, and to refine forecasts or develop appropriate channel-funding strategies based on data shared through the systems.

PRM vs. CRM

All those functions are useful, but do companies need specialized software to achieve them? Christian Heidelberger, president and CEO of ChannelWave, says yes, and argues that most CRM software is designed around a “one-to-many” concept and thus isn’t suited to “managing the life cycle” of critical partnerships. Krishna Subramanian, CEO and chairwoman of Kovair Inc., goes one step further. Her company dubs its product “SRM” (“S” as in strategic), and says it’s tailored for “a company’s most valued relationships, as opposed to PRM, which is really just sales-force automation applied to indirect channels.”

Such distinctions may be lost on most companies, particularly since many PRM vendors have partnered with CRM giants such as Siebel Systems and Epiphany. “Very few PRM vendors will survive on their own,” says Karen E. Smith, senior analyst at Aberdeen Group. Mary Wardley, an analyst at IDC Corp., agrees, and predicts that in some sense PRM will become a victim of its own success. “As it acquires more functionality and moves into the mainstream,” she says, “that only increases the odds that it will become part of CRM vendors’ products.”

Smith says that regardless of who ultimately knocks on customers’ doors with PRM offerings, “the need for this technology will still be there, and will in fact be part of most companies’ E-business architecture.”

ChannelWave and other vendors say that while the indirect channels that so many high-tech firms rely on make that sector a logical starting point, insurance, pharmaceuticals, commercial banking, and other industries will soon adopt PRM en masse. “Industries in which the typical sale is complex, involving teams, lots of documentation, and lots of support, are where we can provide a strong and quick payback,” says Subramanian. Heidelberger says that ChannelWave will drive sales by offering a detailed ROI analysis, and set prices based in part on whether those expectations are met. Wardley says that despite such promises, companies are likely to restrict their rollout of PRM software to partners that generate revenue.

As for all those other relationships companies may have, there’s always E-mail.

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