The Past and Future of PRM

The allure of automating the most common tasks involving channel partners, manufacturers and distributors is so sexy that this corner of the CRM market erupted with growth during the dot-com bubble. Today it’s collapsing faster than a souffle pulled from the oven too fast.

When the number of firms offering Partner Relationship Management, or PRM, grows at a faster rate than all customers using the software — as it did in the late ’90s — you know there’s a major shakeout on the way.

The first casualties were hosted firms that focused on a single aspect of channel partner relationships — such as training or handling launch materials. As one vice president of sales told me, “I could [either] use Fed Ex tubes and have an admin crank out labels, or [I could] implement an entirely new system just for that. Fed Ex won.”

PRM’s Legacy

The good news for manufacturers who have installed PRM systems is that they have an accidental platform — an intranet portal that can be easily re-purposed to meet the following needs:

• Lead management and escalation: Siebel pioneered PRM, and its platform performed well by comparison to manually sorting and tracking leads. Blue Road’s creative use of analytics on a hosted platform to bring intelligence to lead management and escalation continues to attract customers. Arguably, lead management and escalation is more about sales force automation, with the hosting decision incidental.
• Synchronization of channel pricing: For the majority of manufacturers, PRM rarely fulfilled its promise of being able to synchronize product introductions, train workers and foster teamwork among resellers. Instead the PRM platform became a foundation for managing, publishing and controlling pricing throughout channels. Special pricing — requests from channel partners for price exceptions — has paid for more PRM systems than any other strategy.
• Order capture and order management: A wave of changes — ChannelWave’s acquisition of Aqueduct, and then Click Commerce’s of ChannelWave; Comergent’s push into demand-chain and order management; Siebel’s aggressive plans for order management; and Oracle’s integration of e-commerce and PRM into a single roadmap — all reveal what it was that caused manufacturers the most pain: disconnected and chaotic customer-facing systems not connected to fulfillment.
• Service life-cycle management: One well-known automotive parts manufacturer says that the ROI for automating service applications — such as return materials authorization (RMA) and warranty reimbursements for service work — was completely broken. Using a PRM platform installed in 2001, this parts manufacturer is now building out an entire services strategy and the beginnings of a product life-cycle management system based on field failures of products.

Substitutes vs. the Real Thing

The needs that PRM was originally created to address are being answered in many companies by using Microsoft SharePoint, low-cost portals, freeware for project collaboration, salesforce.com, Siebel-IBM OnDemand initiatives and other hosted alternatives.

In a quick survey of manufacturers attending a recent marketing summit, over half said they still use Outlook folders, SharePoint and other low-cost content management systems for synchronizing global channels for product introductions. The original vision of PRM as the orchestrating force of product launches — including training, pricing, lead management, escalation, support and service — was rarely realized. Instead PRM become a cure for transactions and pricing problems.

Bottom line: PRM is done. If you invested in PRM, then try to re-purpose the platform to solve lead management and escalation, pricing, order management or service life-cycle management problems instead of abandoning it altogether.

One fact is certain: The vision of PRM applications coordinating knowledge-sharing has found strong competition in freeware that promises to bring even greater control to product introduction, learning and collaborative development.