BlueRoads CEO Shinya Akamine: Out With PRM, In With POM

Channel partner opportunity management firm BlueRoads announced on Sept. 17 a new lead referral moduledesigned to help vendors gain strategic insight into the management of better sales channel yield. The newsoftware module captures new referrals from a vendor’s extended partner community and harnesses previouslyuntapped sales opportunities.

This new capability allows vendors with large, complex channels to compensate appropriate parties for newlead referrals, introduce streams of sales pipeline revenue and streamline partner workflows. The goal ofthe new approach to channel partner management is to help vendors who need to better manage theperformance, power and potential of indirect channels to grow business opportunities.

CRM Buyer met with BlueRoads CEO Shinya Akamine, a former CEO at Postini, to discuss the company’s view ofthe channel partner market for vendors. The discussion also revealed the company’s plan to change the waybusiness is done — from a linear model to a more fluid, three-dimensional process that iscustomer-centric.

CRM Buyer: How would you describe the current state of the channel partner segment of the industry?

We as an industry — vendors and providers of tools — are enmeshed in a stalled state after the success of the first generation of channel tools began to die out. People forget about the wave of IT moving through a company. This is an area where few corporate-wide tools exist for managing channel partners.

CRM Buyer: What do you see as the biggest challenges this industry faces today?

Channel chiefs face answering questions from their CIOs about how they can be more effectiveas the company’s main go-to-market outlet. Channel chiefs’ old view was efficiency of cost. Now they haveto start shifting to increasing sales through more productivity over cost. Add to that problem the channelchiefs’ need to find channel-specific tools that are not modifications of existing direct sales managementtools. No software is available for them yet. This is a hot market for tools that still has to be met.

CRM Buyer: How is BlueRoads meeting this void in software tools for the channel partner market?

Existing channel software firms are fragmented and are mostly mom and pop shops. BlueRoads is neither of those things. We bring a large corporate structure to the market. The channel management industry is so different from direct sales that no transition exists from previous software. Our new product fills that need.

CRM Buyer: What makes the lead referral solution you just announced different from existing Partner Opportunity Management (POM) solutions for medium-to-large enterprises?

What do vendors do to get their channel partners more productive in selling? They only have four leverages. They can add more opportunities; they can shorten the sales cycle; they can increase the closing rate; they can close at higher prices for the same sales volume. First generation management software is not the answer. Vendors need a new generation of POM software. That’s what our Lead Referral Module gives vendors. This is a new tool in their market. It creates more opportunities for them in the pipe.

CRM Buyer: How can a software product create new opportunities for channel partners?

The Lead Referral Module gives vendors a new process to pass on leads to corporateheadquarters and then compensate the partner for the referral. Typically, a channel partner receives rawlead information but has no real stake in pursuing the sale of the vendor’s product if the partner viewsthe lead as unqualified or not in its immediate line of business. So the lead goes nowhere, and thevendor misses the chance to pursue the sale.

The value of the Lead Referral Module is to increase the channel partner’s opportunity. It gets allaspects of the channel involved in the sales process. It gives all partners an equal stake in the vendor’sbusiness. This is a very cutting edge module. It plays right into the coming change of channel from therole of distribution to that of sales hunter.

CRM Buyer: Given the current focus on Web 2.0 applications, how effective has the channel partner segment of the industry been in utilizing this new technology?

All the great technologies for Web 2.0 [are] not being used in the channel by the partners. The evolution of the Internet is for consumers. The Internet is still in step one of growth for vendors. We will see the channel side start to use the Internet to deploy partners to increase and close more sales.

CRM Buyer: How do you see the channel industry progressing in the short-term and long-term growth of the channel ecosystem?

Vendors need to recognize the partner relationship management (PRM) software won’t work for them anymore. That’s why analysts have started to talk about how PRM has little value left. They will need to go to the next phase — partner opportunity management tools (POM).

For example, some Fortune 500 companies still distribute leads to their channel partners via e-mail with a spreadsheet attached. Partners then view the list of customer leads on the spreadsheet and pick and choose from the ones they know and only get a slight response. Our product gives the channel full details to connect the leads to the right partners in the channel. This is why leads management is so vital to the business component.

CRM Buyer: What are the issues that channel partners face in working with vendors? Is it something more extensive than competition for lead conversions and motivating partners to become more effecting?

That is one of the biggest questions in the industry today. The No. 1 thing is tounderstand that partners are not the direct sales force of the vendor. Channel partners are running theirown businesses and represent 20 or 30 other vendors. Vendors have to accept that this dynamic is different — not bad — but needs new incentives. That’s what makes BlueRoads exciting. We can match up both sides to release the sales power for each other.