The importance of delivering an efficient channel data management (CDM) experience

Can your channel data management (CDM) solution provide real-time transparency into the channel of your component, chip or semiconductor sales? Does it include WHO is being sold to, at WHAT price and profit margin, and WHERE the products are going? If the answers are not yet, you need a data-driven strategy. If you confidently answered yes, you are a high tech industry leader in data-driven decision-making, improving your competitiveness and revenue growth. 

Is your data in disarray?

Overall, component sales are moving into positive territory. Cautious optimism seems to be the outlook right now. Regardless of your current business situation, it would be best to examine closely one strategic aspect of your components business—CDM. 

If you’re currently exploring AI-powered applications to optimize your pricing and incentive programs while driving efficiency and improving margins, keep in mind that AI, much like traditional statistical models used for decades, depends on data. This is not just any data but good, clean, reliable and accurate data. Without good data as a foundation, regardless of which analytical technique you choose to employ, you might be causing more harm than good. With this in mind, let’s take a fresh look at CDM.  

Do your share of the heavy lifting in your partnerships

Up to 80% of high tech transactions go through channel partners. Delivering an efficient, transparent and error-free channel management experience is crucial to increasing your competitiveness and profit margins. Within the electronic components industry, massive amounts of data are continuously exchanged between manufacturers, distributors and resellers.

What exactly do we mean by CDM? Your first thought might be that it involves managing Point of Sale (POS) data. While POS is a critically important subset, CDM is more than that. It’s about creating a 360-degree view of your channel partners and their relationships, transactions and interactions with you. Establishing and maintaining the data integrity of your sales and inventory reported through distribution is likely one of your most difficult CDM challenges.

Many companies like yours lack the visibility needed to make smarter business decisions based on proper analysis of accurate data. As an ECM, it’s essential to know what your partners are selling, who they are selling to, how your end customers are buying, and what they might need in the future. But getting good, clean data on these and other aspects of your business is often a struggle.

According to Jay McBain, one of the leading tech channel influencers, CDM tools are becoming increasingly important for vendors and their partners in the tech industry. And for ECMs, having good CDM tools is not an option today – it’s a must-have.

Bridge the partnership gaps for clarity and control

As critical as CDM tools are to your business, they are just one aspect of a well-constructed CDM system. Even with better data that equates to a lower need for data governance, technologies alone will not get you where you need to be. Your established processes and governance are just as important as technology – maybe even more important. Companies that implement CDM the right way have a focus on all of these components. A robust data governance system is key to running your business and should be one of your primary CDM objectives. 

What is data governance…is it important? 
According to the Data Governance Institute, data governance is “a system of decision rights and accountabilities which describes who can take actions with what information and when, under what circumstances, using what methods.” In short, the lack of governance and controls can render the best processes and tools ineffective.

Several processes should be considered, but don’t skimp on one crucial one: partner onboarding and enablement. Establishing and maintaining the integrity of sales and inventory data through distribution is one of the most difficult CDM challenges. Partner enablement is essential to transforming new partners into strong partners. It also has many benefits for ensuring the quality of the data you get from them. 

Your partners must understand how to properly configure and report data on ship & debit claims, rebate claims, reseller activity and all the important data involved with end-customer information and POS activity. It strengthens your relationship with your partners when they’re reimbursed in a timely manner. 

If your channel data does not accurately reflect what is really happening in your business, it can lead to misconstrued decisions. Moreover, data scattered across many different silos with little discipline in governance results in “dirty data” and inaccurate reporting. 

Insufficient data accuracy can make it difficult to:

• Accrue correctly for liabilities and audits
• Achieve accurate and timely payments
• Determine partner eligibility
• Properly classify and segment partners
• Understand partner capabilities to support and grow relationships
• Measure performance to determine which partners are most/least valuable

This all leads to diminished confidence when applying analytics. Inefficient channel data management and the resulting lack of insight into partner and program performance are significant challenges for technology companies. 

Better data = less stress on data governance, creating better analytics = greater revenue

As a forward-thinking ECM, you’re always working toward the next innovation and growth opportunity. But your company can’t afford to wait to fuel the upcoming growth predicted within the industry. Fortunately, that fuel resource is right at your fingertips – it’s your data. Channel data is the lifeblood of your business. 

What makes data an asset? In simple terms, an asset appreciates and generates an ROI. When an innovative company like yours views data as a strategic asset that is effectively managed, it will emerge as one of your company's most important resources. 

For a deeper look, we invite you to check out our video series on Channel Data Management. This is a series of bite-sized and highly informative messages on how to set up your entire CDM system to achieve optimal results.