July 2003

By Tom Mescall, Comergent Technologies

To thrive in the Internet economy, companies must be proactive in adopting e-business strategies. In business-to-business (B2B) commerce, more than 70 percent of products and services are sold through indirect sales channels including distributors, VARs, retailers and a host of other third parties. For companies that want to lead in their respective industries, this means creating and executing a channel-inclusive e-business strategy. Since channel partners provide value-added services, such as global and vertical reach, logistics and customer service and support, these critical relationships need to be nurtured rather than neglected. These companies must establish a cohesive and effective approach to B2B e-business ' an approach that leverages and extends traditional sales and distribution channels to drive top-line growth while reducing costs.
This article will delineate the process in seven essential steps:
Step 1: Focus on your customer,
Step 2: Determine your all channels e-business strategy,
Step 3: Implement an e-business solution taking sales channels to the Web,
Step 4: Develop high-performance sales channels,
Step 5: Measure results,
Step 6: Evolve your e-business strategy based on measurements,
Step 7: Reap the rewards.

Step 1: Focus On Your Customers
Customers are the heart of every business and thus should be at the center of any e-business strategy.
Remember who the customer is. While an automotive parts manufacturer might consider its dealer network to be its customers, and an insurance provider looks to its independent agents as its customers, the real customers of any business are the end-customers ' the entities that ultimately buy the products and services. If end-customers don't value your products and services, sooner or later you will be out of business. Therefore, the first step is to develop an understanding of who your end-customers are and what needs they have. Consider the full range of their experiences:
' How do they buy?
' What do they want from you?
' What do they want from your channel partners?
' What is their ideal buying experience?
By understanding the value of each of these elements, companies can determine how to optimize each element to better serve end-customers.
Make it easy for the customer to do business with you. Businesses need to offer customers an optimum sales experience. This includes providing customers with the information and commerce capabilities to quickly and easily obtain the solutions that best fit their needs. These elements must be displayed in a single, seamless interaction to minimize the customer's effort.
Provide superior customer service. While product differentiation continues to be important, businesses are increasingly providing value to customers through a variety of additional services. In addition to logistics, these services include customer care, complementary products and services that enable a complete solution sale, and much more. For companies that sell primarily through indirect sales channels, these services are delivered through their channel partners. Thus, in order to exceed customer expectations, companies need to focus on how to align channel partners with customer requirements.
Step 2: Determine Your All Channels E-Business Strategy
While companies feel the pressure to sidestep competitors with a first-to-market advantage, there is little benefit in aimlessly building an e-business system that does not meet your end-customers' needs. Some companies are taking a haphazard approach to the Internet, trying to shoehorn existing business practices into simplistic e-business capabilities, or worse ' drastically changing current effective business practices. A more sensible approach is to determine how to use the Internet to optimize and extend your company's established sales methods and align your e-business strategy with your company's overall goals.
Determine which sales channels to take to the Web. In most cases, companies use multiple sales channels to respond effectively to customers' needs. These include indirect sales channels, such as resellers, retailers, OEMs and dealers, as well as direct sales. Remember that indirect sales channels deliver value to customers and strategic value to companies. An e-business strategy that does not consider all relevant sales channels ' including their sales and distribution models and related business processes ' is doomed to failure.
Formulate an integrated strategy that provides a common infrastructure for all sales channels. Once a business has determined which sales channels to take to the Web, they must provide an e-business infrastructure that integrates all of them within a single, cohesive system. This type of e-business infrastructure has a much greater potential for impacting overall company profitability. Short-term rewards include reduced costs through process automation and efficiencies. Long-term rewards include increased revenue, greater customer and partner loyalty and the ability to create strong selling partnerships that help differentiate your products.
In determining an all channels e-business strategy, the overriding objective is not only to maximize revenue and profit, but also to maximize value to customers and channel partners.

Step 3: Implement An E-Business Solution That Takes Your Sales Channels To The Web
Now that you've determined your e-business strategy, it's time to find the solution to execute it. An e-business solution must enable all your sales channels to quickly and effectively meet the needs of customers. Industry leaders are using e-business technologies to manage and coordinate information and commerce activities from all customer touch-points. A strong channel support infrastructure fosters collaboration and increases channel partner productivity, efficiency and value. This implies an e-business system that is able to support various channel needs within a single system.
Executives about to implement an e-business solution must consider a few key application and technology requirements that will ensure the deployment of a successful commerce solution.

Application Requirements
' A marketing application that delivers marketing capabilities enabling cross-selling and upselling,
' A guided selling application that uses customer requirements and behavior to lead customers to the right sets of products,
' A sales configuration application that gives customers a full range of available product options, while ensuring against incorrect sales orders,
' An all channels e-business application that enables indirect sales to customers seamlessly via channel partners, as well as direct sales to manufacturers' customers and partners,
' Central control of partner profile information and commerce activities, enabling reporting, analysis and delivery of targeted content to channel partners, and
' An analysis application that provides analytical capabilities providing businesses insight into all commerce activities.

Technology Requirements
' Distributed and collaborative applications built for the Internet that can be easily deployed at partner sites with real-time feedback and response,
' Open, standards-based technology that is adaptable and customizable,
' A quick and flexible implementation design with a quick return on investment,
' A modular architecture that can plug into current e-business and enterprise system capabilities, and
' A proven and scalable architecture built for growth.

Step 4: Develop High-Performance Sales Channels
Accelerating channel productivity to drive channel revenue is critical for enterprises that deliver through indirect sales channels. A high-performance sales channel is knowledgeable about products and customer requirements, sells fast and smart and meets and exceeds customer expectations.
For businesses that deliver through indirect sales channels, the goal is to make channel partners as efficient and effective as possible to drive top-line growth. An e-business system that delivers real-time information can drive every aspect of a company's production and sales cycle. The sooner a company can obtain customer and channel information, the sooner it can impact product production and channel performance to better meet customers' needs.
Accelerate channel efficiency through e-business capabilities. A strong e-business applications solution provides channel partners with the right information, tools and support to conduct commerce more efficiently. By automating and improving many manually intensive tasks, channel partners are free to focus on more strategic activities, such as enhancing customer service.
Accelerate channel performance through visibility into customer behavior and preferences. The Internet and e-business technologies make it possible for companies to establish a collaborative e-business environment that provides visibility through the channel to the end-customer. With the knowledge gained, companies and channel partners can better understand, anticipate and fulfill customer needs; increase responsiveness throughout the partner network; provide customers with a more efficient and effective sales experience; customize and target promotions to cross- and upsell; and increase customer satisfaction and foster customer loyalty.
Accelerate high-performing channel partners and monitor low-performing channel partners. Through a collaborative e-business solution, companies can gain visibility into individual information, identify channel partners that deliver the most value to end-customers, properly allocate incentives and rewards, target and reduce channel inefficiencies and monitor low-performing channel partners.

Step 5: Measure Results
Through e-business solutions, enterprises can for the first time accurately and efficiently measure results when working through indirect sales and distribution channels. Enterprises can now centrally track all activities through the channel to the end-customer. This enables them to understand customer desires and help channel partners meet those desires, while continually monitoring the activities and performance of the channel as a whole.
Measuring results. An effective e-business solution must provide up-to-the-minute reports based on key performance indicators such as which products are moving through the channels; how many orders or quotes are being executed versus abandoned; what the contents of these orders are; and which orders are actually being completed at partners' commerce sites. Additionally, companies must be able to obtain detailed information on individual channel partner activity and performance. These abilities are critical since they enable proactive, strategic decisions based on these data.
The benefits of measuring results. Enterprises need tools to assess how effectively they and their channel partners are meeting customer needs. For example, it is difficult to get the right products to the right customers at the right time if companies have to wait weeks for point-of-sale reports from channel partners. Instead, companies can receive real-time information about which products are selling through channels to end-customers, better anticipate customer needs and subsequently adjust production, marketing or other plans as necessary.

Step 6: Evolve Your E-Business Strategy Based On Measurements
In a collaborative partner marketplace, companies enjoy both top- and bottom-line improvements as they adjust their e-business strategy based on measurements of channel effectiveness. As a result, more responsive enterprises are created. The ability to continually improve channel partner effectiveness springs from a strong but flexible channel support infrastructure.
Evaluate and evolve your collaborative partner marketplace. Once an e-business infrastructure is in place, it's time to evaluate the performance of the collaborative partner marketplace, then evolve based on what is being learned from the channel and end-customers.
' Identify high-performing sales channels, single out their best practices and encourage these practices throughout the partner network,
' Target and reduce inefficiencies throughout the channel partner network,
' Create a cohesive and responsive channel partner network,
' Provide flexible commerce systems that enable channel partners to evolve and add more value to customers,
' Use customer information to alter product offerings and production planning, and
' Determine additional products and services that customers desire and acquire the channel partners to fulfill those desires.
Profitable channel management is a continually evolving process. By closely monitoring the collaborative partner marketplace, businesses can take proactive steps to continually improve the productivity and effectiveness of their e-business solutions.

Step 7: Reap The Rewards
To better serve customers, astute enterprises are cooperating with channel partners more closely than ever before, regardless of the industry. While channel partners focus on providing global and vertical reach, logistics and other value-added services, companies are able to focus on maximizing their e-business solution to drive top-line growth, enhance their customer experience and strengthen channel partner relationships.
In a collaborative partner marketplace, companies and their channel partners work together to build a unified and optimum brand experience for the customer, to improve customer satisfaction and foster customer loyalty. In its most advanced form, collaborative e-business makes it difficult to discern where the company leaves off and the channel partner picks up. This sophisticated business-to-business coordination drives top-line growth, optimizes the channel, increases channel partner productivity and reduces costs.
Business benefits:
' Influence the customer experience and enhance brand value,
' Gain visibility into customer behavior and preferences to better anticipate and meet customer needs, improve product planning and production, and better target promotions and cross-sell/upsell opportunities, and
' Increase visibility into channel activities and performance to improve forecasting, decrease channel inventory and more accurately allocate channel marketing spending.

Benefits to the customer:
' Receive highly targeted information providing faster, more informed buying decisions,
' Quickly and easily obtain the products and solutions that best fit their needs, and
' Seamlessly access the offerings of manufacturers and channel partners without having to explicitly navigate a disconnected selling process.

Benefits to the channel partner:
' Enhance relationships with customers by improving the accuracy, timeliness and focus of solutions, and
' Shift focus and resources from manually intensive tasks to strategic objectives.

In the end, a successful B2B e-business strategy must be channel-inclusive. By optimizing a collaborative e-business environment, companies evolve from being reactive to proactive, have the knowledge to deliver superior customer service, and respond faster to their competition. With an effective B2B e-business solution, companies can realize greater revenue and cost savings through optimizing their channel, automating their business processes and ultimately making it easier for their customers to do business.

Tom Mescall is senior vice president of business development at Comergent Technologies (www.comergent.com). Comergent provides demand chain management software applications which help companies automate their selling processes from sales lead to order capture to post-order service and analytics.

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