A number of large enterprise high tech manufacturers have well established sales and distribution channels to augment their direct sales channels. Let us first understand how the channel is constituted. A typical high tech sales channel is a multitier model, with some direct sales but a large number of transactions taking place through an intricate network of sales reps, agents, brokers and local/regional/global distribution companies. Channel partners are not only involved in reselling, but are also involved both upstream and downstream in the supply chain, e.g., logistics solutions, product assembly, outsourcing of services, etc.

High tech companies which sell through the channel rely on data from their channel partners- inventory reports, POS data and sales data- for important business processes like sales forecasting, revenue recognition, inventory management and product pricing. The first challenge that companies face is that the convoluted channel network results in poor communications across the channel. This results in lack of timely, accurate sales data, slower time to market and lack of real time visibility into channel sales performance and product movements.

In his blog, the Channel Guru Richard Flynn talks about partner performance being critical to maximizing channel performance. A recent Aberdeen study (May 2011) showed that it is becoming increasingly difficult for to control the flow of data across multiple geographies, extended product lines, and sheer volume. Multichannel semiconductor companies need to better integrate order and inventory management processes – for two very important reasons, which traverse both up and down the channel

1)   Manufacturers need to acertain that their core value proposition, pricing and positioning are being uniformly carried out across the channel to deliver a consistent to customers of the products’ value.

2)   Timely and relevant data from different channel touchpoints will allow for better order and inventory management, eventually leading to more on-time deliveries and customer satisfaction.

Over 90% of respondents in the Aberdeen survey said that they needed more visibility into channel partners’ performance, while only 50% said that they have such visibility. Enhanced visibility will ensure:

-          Which sales channels are best for which region, product segment or customer?

-          Keeping track of sales pipeline, stalled or missed deals

-          Awareness of supply constraints due to unplanned capable-to-promise dates

-          Material tracking across outsourced operations

-          Quick response to changed market conditions

Poor communication and lack of adequate, timely data leads to the channel management challenges listed below:

• Poor price and margin management
• Inability to make product/order availability commitments to customers
• Higher cost of sales (returns, billing disputes, logistical costs)
• Incentive over-payments to partners and sub-optimal pricing
• Inaccurate Ship & Debit claims
• Inability to react in real-time due to reporting latency

In summary, it is important to increase collaboration in the channel to increase accuracy and efficiency to drive increased revenue and enhance sales execution. Global business faces a new era in which agility is central to success, today and in the future.

Stay tuned as we discuss the challenges listed above in our upcoming posts. And let’s discuss how we can reinvent this area together. Subscribe to our blog feed here.

In his talk, he started with highlighting the differences between sustaining innovation and disruptive innovation. Sustaining innovation improves an existing product and its performance for the current market. Companies which make/manufacture the product create sustaining innovations for their present customers. However, disruptive innovation emerges on a separate curve, and serves the needs of a new/emerging market. And it does so in a much more affordable manner.

Christensen talks about how new entrants typically win at disruption, while incumbents dominate sustaining battles. According to him, the pursuit of profit drives companies’ up-market. Moving towards affordability and accessibility seems less profitable. The disruptors enter the market with a lower cost business model, such that technology that is expensive and inaccessible becomes available to all. He talks about how entering the market at a new level allows for a more democratic access to technology.

It is this democratization of technology that will lead to the greater good of a greater number of people. For example, he talks about the decentralization of healthcare, and how empowering pharmacists and nurse practitioners can lead to more accessible healthcare for a larger population; healthcare which is just not affordable by a vast majority right now. He draws a similar parallel to American education, and how online education is making education more affordable and accessible. He gave the example of Harvard Business School (HBS), where he currently teaches. The cost of an HBS MBA is about $150,000 per year. And then he compares it to the University of Phoenix. He recently recorded some lectures for them, and he was told that those lectures would be broadcast to all 135,000 business students at the university!

Competition can be on two levels, by improving functionality and reliability, or by improving speed, responsiveness and customization. The former approach is mostly adopted by incumbents, while the latter is the disruptor’s approach. The disruptive approach usually inches up the performance ladder slowly, moving from satisfying the requirements of the new market to the existing market.

Disruptive technological forces are very much at play in the enterprise software world. Mobility is ubiquitous and no longer a choice for most technology companies. The cloud is rapidly making technological access easy and endless amounts of data are being generated at alarming speeds. The consumption and comprehension of big data results in its own unique challenges, which are being addressed by what is now commonly termed Fast Data.

In his article on the upcoming App revolution in Enterprise software, Tiernan Ray argues that these disruptive innovations are and will rapidly change the enterprise software market. (http://blogs.barrons.com/techtraderdaily/2012/03/29/sap-orcl-to-ride-wave-of-apps-revolution-says-credit-suisse/?mod=yahoobarrons). He quotes Phil Winslow, who talks about a paradigm shift in enterprise architectures. Winslow says that this new application revolution will create both a new market and a new generation of enterprise software companies, who are riding this crest of disruptive technology. Winslow goes on to add that incumbents (to borrow Christensen’s terminology) might face potential problems, but this transformation of the enterprise ecosystem will bring with it an expanded user base (Christensen’s democratic access) along with smaller, faster providers.

This challenge of change can be either a threat or an opportunity. With this opportunity comes the chance to do good work, drive technological innovation, and in some way, do greater good for a larger people. Reach out and touch and make a difference in more lives, maybe for the better. In a way, is this not what all startups want to do? Isn’t this the ultimate aspiration? Dreams of fame and fortune aside, the changes we make are all that matter. As somebody once said to me, people only remember us for the contributions we make to the world.

You can see the complete talk here: http://www.parc.com/event/1646/innovation.html

I have discussed Business Agility as the ability of an Enterprise to run highly automated processes in such a way that human intervention in the process is focused on exception conditions or where transactions are showing signs of likelihood of falling off the benchmark standards of performance, such as time-to-completion. An Agility system, or application, orders the transactions for a user in line with what needs his or her prioritized attention towards the aim of meeting benchmark performance.

Business Agility adds value, and plugs value leakages, towards a company’s topline as well as the bottomline. A question arises: what areas of a company’s operations foremost need to implement agility?

This blogger is of the opinion that the area that gains the most positive impact from agility is Customer Satisfaction & Retention. An enterprise must foremost focus on loading agility into its customer facing processes.

A delayed, or possibly delayed, shipment to the customer can be pre-emptively communicated to the customer, and with a modest discount for the delay, or a generous discount for his next purchase. A repeat customer calling into your contact center to make an order should be recognized, acknowledged and, based on his purchase history, offered a loyalty discount, or a free upgrade on his shipping method. The system can use the customer name and address to recognize the repeat customer and prompt the order taker to acknowledge him and offer any discounts allowable.

The customer has a complaint around your product but the service ticket has not changed status for 2 days. The system needs to call it to your attention, not merely roll it into a quarter end aggregate efficiency report! An overview, or transaction list of customer facing activities that you perform, or manage or govern, should highlight and put upfront such transactions.

Satisfying the customer by meeting expectations on the speed of delivery of products, services and response sets an Enterprise up for long term growth and sustainability. Where expectations are likely not going to be met, the customer needs to be engaged ahead of time and offered compensation or a token of appreciation for his understanding.

Customer satisfaction and retention in the internet world calls for distinctions in customer recognition, acknowledgement, communication, and value pricing of each experience: sales and service. A thoughtfully constructed Agility platform brings this to the forefront as opposed to mere transaction processing.

Again, when you have several payments to make, you make the ones where the deadline is close, not all of them together ~ earn that wee bit more interest on your money by keeping it a few more days in your savings account!

You have a team of Consultants that you manage for deployment on a project, and some of them are behind in entering their time that rolls into the billing to the customers they are serving. You make a call which cases to pursue, and use the time that this selectiveness bestows to offer help and guidance to those that are struggling in their work.

The article talks about a new camera, which allows you to focus a picture after you take it. Called the Lytro, this camera packs in the power of a 100 digicams and a supercomputer. However, it is almost knob-free, with touch screen controls, and extremely simple and easy to use. To quote the founder, Ren Ng, “With all their modes and dials and buttons, the majority of cameras today are too complicated for most people,” says Ng. “You can’t use powerful technology for technology’s sake. Our focus is always to make it simple.”

In his book, The Design of Everyday Things, Donald Norman says that there are no stupid users, only bad design. If I cannot figure out whether I am supposed to pull or push a door (especially the first time), it is because the door was not designed to give me the correct message at the right time. According to Norman, user-centered design is the most important, essential thing to keep in mind while designing anything, from a pen to a palace.

I couldn’t agree more. The purpose of all technology is to make our lives easier. This is one of the guiding principles of our company’s solutions. VSSOD solutions embody the paradigm of Exceptions First, filtering out the noise from business process data… much like Lytro helps focus pictures after they are taken. VSSOD solutions are truly aimed at making the life of enterprise end users easier. With our easy to understand and quick deployment solutions and apps, we hope to transform the enterprise software space. Not make it more complicated, but simpler. Simplicity is the key to future technologies, because that affords ease of adoption and use. In Norman’s immortal words, we need to humanize technology. Make it easy to use. With as few knobs and buttons as an iPad. Or even, a Lytro!

Here is the article that started this train of thought. http://www.hemispheresmagazine.com/2012/01/01/next-big-things/

It is also safe to assume that many consumers own multiple mobile devices, including yours truly. With more and more companies adopting the BYOD (Bring Your Own Device) policy, it is only a matter of time when there will be a need for Enterprise Applications to do more than just high level Business Analytics, workflow approval or time & expenses on smart devices.

Not too long ago I used have a “work” cellphone and a “home” landline. I had a “work” laptop and a “home” desktop. There was a (somewhat) clear demarcation of the functions of each device. And my experience was not atypical.  However, it is evident that this trend is changing, and very quickly. We expect one device to do most everything.

Tools like Instant messaging, chats, Facebook messenger, Email, or status updates on various social networks, are allowing people to be connected to each other in real time. However, when it comes to our work or our customers, such interactions have not yet become the norm.  I think that very soon this will change.  This reminds me of a personal experience early in my working career.

I was working as a Systems Administrator at a University about 20 years ago. I used to dread going to work on Monday morning as there would be mainly large group of students waiting outside my office. They came with the problems they had encountered with the systems during the weekend. Many of these were trivial issues, like clearing up a print queue in the system or resetting a password, which I could have solved easily had I known about them.  Making my email address (or home phone) known was considered an invasion of privacy and was not expected (or common) at the time.   However, I created a separate user-id for students to email problems to me during the weekend and off hours.  I used to login with my 9600 baud connection two or three times during the weekend and take care of many of the issues.

I didn’t consider this extra 20-30 minutes of work during the weekend a burden because now the number of people looking for me on Monday morning was minimal. Since most of my “customers” were students, they appreciated this gesture, as most of them were scrambling to finish a paper or a project that was due shortly. Bottom line, everyone was happy!

Consider a scenario of a customer service representative, who, while waiting in a line for a movie, quickly checks on an app that shows an exception to a sales order to a very important customer on his/her mobile device. The CSR quickly checks on the exception and is able to take some preventive action. This is possible mainly because of technology – the mobile app, connectivity, accessibility, ease of use and the ability to take an action.  Just like it is currently OK to check your stock portfolio or personal Facebook page during work hours, taking care of business will become an inherent part of our DNA.

To address such usage and adoption, companies will have to make their business processes and IT systems more proactive rather than reactive. This can be achieved by making the user interface very simple yet attractive and mainly presenting relevant information to the end.  Presenting relevant information, for example in an open Sales Order, could mean showing exceptions rather than showing all the details for an order.

Business Analytics/Dashboards for C-level and other higher executives are the current focus for most mobility apps. Enterprise vendors like SAP/Oracle and their partner network should focus their solutions to mobile operational users also, which is their core user segment. Operational users are the backbone of any company and they need to be empowered appropriately so that the core business chugs along smoothly.

This is a tale of two sides. In all fairness, we should take a look at the enterprise side of things as well. The vendor probably had in place a customer focused intelligent process that determined it was cheaper to let the customer keep the first (incorrect) product (because return logistics, restocking, and disposition would cost more than the product value).  A well-established process threshold allowed the helpline to confirm the reshipment. However, it might have been the request approval that delayed the reshipment. Every action of the vendor helpline suggests a process geared towards high customer satisfaction bias; nonetheless; the same process being overburdened with huge transaction volumes resulted in inadvertent delay. This in turn, resulted in lost sales, high transaction cost, and a lost customer.

Today’s process oriented enterprises are driven by a relentless focus on achieving efficiency in their business processes. Process management and monitoring are aimed at reducing and removing inefficiencies in the system. However, transaction errors often occur, leading to lost sales, increased cost and more importantly, lost customer satisfaction. This invokes the need for more effective process monitoring, coupled with the ability to identify outliers as and when they occur.

Process exceptions occur in all functions of the enterprise, ranging from procurement to sales, supply chain management to employee management. Organizations need to identify critical and crucial concerns based on their business processes. These pre-defined exceptions require immediate identification and an agile response to avoid order execution delay.

In today’s automated enterprise systems, very often exceptions and outliers to the norm get buried in either the sheer volume of transactional data or in aggregated after-the-fact reporting. Yet, it is these vital ‘outside-the-expected-norm’ events that lead to lost customer satisfaction, lost sales, lost revenue and increased cost. Customer mindshare is earned for the wrong reason- after his telebrand ordering fiasco, my friend would never order from them again. Not because of any inherent problem in the product, but simply owing to the sheer overhead of time and effort that it cost him.

These efficiency and satisfaction leakages are occurring across enterprises, with prospects, customers, suppliers, sales channel intermediaries, and employees. These leakages need to be found and plugged in time- in fact, in real time! Before these escalate into critical issues that can cause potential problems. Hence, the two-step plugging process involves 1) intelligent identification and 2) immediate action.

This approach of Action by Exception is fast becoming imperative in process driven enterprises, as the amount of data to be dealt with is increasing exponentially. Organizations can no longer afford to ignore satisfaction leakages. VSSOD solutions embody this new paradigm of Exceptions First – handling and managing process exceptions, by highlighting actionable real time transactional data to the right person, enabling and orienting him/her for timely, corrective action.

This new paradigm envisages a new method of process management in the enterprise. VSSOD is spearheading this change towards enhanced business agility. This novel approach will transform today’s process oriented enterprises into exception oriented ones. And when problems are resolved first, we will have a lot less people like my friend. And a lot more happy, satisfied customers!

This is VSSOD, a new entrant into the blogging world. We are an enterprise software company, focused on real-time exception management in enterprise order-to-cash processes.

This is the beginning of a new journey for us, and let us embark on it together!