If IT vendors could perform thorough analyses of their channel partnerships to find better ways to support partners and improve the bottom line, they would. Right?
Not necessarily, according to Bill Davidson, president and CEO of Alliance Analytics Inc. Vendors typically have been focused almost exclusively on quantitative results and spend little or no time evaluating what drives those results.
But Davidson aims to change that. Alliance Analytics is the developer of PVO (Partner Value Optimizer), a predictive analytics software application geared toward improving business partnerships and complying with federal regulatory requirements on financial disclosures.
The company is awaiting approval of 23 patents for the software and is actively promoting the technology to IT vendors.
The driving concept behind PVO is to turn typically unpredictable contributors to a company’s bottom line—alliances and partnerships—into reliable assets. Those partnerships involve people who, although they are not employed by a company, contribute just as much to profitability.
“There are hundreds of things that can impact what they are doing,” Davidson said.
Through PVO, a vendor may discover that sales representatives at a particular partner don’t like selling the vendor’s products because the company typically has taken too long to compensate them.
But since the partner is still meeting quota, the sales manager may not do anything to improve performance, Davidson said.
The software identifies partnership problems such as these through “surveys that have a lot of meaning under the sheets” by analyzing trends, statistics and root causes, Davidson said.
“We try to identify what the issues are and why they’re not selling the product,” he said.
Armed with that information, a vendor has the opportunity to spend its partnership dollars more effectively, he said: “You really start to use intelligence in determining where to start spending the cash.”
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Jeff Eaton, chief operating officer at channel consulting firm Sales Excellence, of Weathersfield, Vt., said he has evaluated PVO. A former channel chief for Parametric Technology Corp., Eaton said if he had had a tool such as PVO while running the $100 million business, he could have asked for more resources and gotten better results.
“It’s a very valuable tool,” he said.
Alliance Analytics has been marketing the software to vendors in the IT industry, and Davidson, a former channel sales manager for GE IT Solutions, said he believes it also has uses in other partner-heavy industries such as telecommunications, pharmaceuticals and manufacturing. The company expects to close its first deal within 20 days, he said.
Vendors have not rushed to adopt the technology when approached, he said, because of their focus on quantitative results.
“It’s just additional work that they have to do,” Davidson said.
Eaton said he is not surprised at the vendors’ reaction.
“One of the phenomena that goes on out there all too often is if things are going well with the channel, they don’t want to [know] what’s going wrong,” Eaton said.
But Davidson is optimistic about the technology’s prospects because of Sarbanes-Oxley Act regulations requiring that companies adequately measure the effectiveness of their processes, including those that involve partners.
A lot of 10K and 10Q Securities and Exchange Commission reports indicate that companies often have no idea what to expect in business through partners, Davidson said, adding that that is something they have to get better about in order to comply with Sarbanes-Oxley. With PVO, he said, companies can substantiate claims they make to financial analysts and investors.
Eaton said once Alliance Analytics closes its first deal and word gets out of the software’s effectiveness, more deals will follow.