Model N Study: Improved Channel Data Optimizes Sales and Profitability for High-Tech and B2B Software Companies

Rhea-AI Summary

Model N (NYSE: MODN) has released findings from a Forrester Consulting study focusing on revenue management and channel strategy in high-tech manufacturing and B2B software. Surveying 211 senior leaders, it highlighted challenges in automating channel revenue processes despite their perceived value. Over 70% of respondents recognized automation's importance in management areas like incentive and rebate management.

The study indicates that firms face obstacles such as short product lifecycles (53%) and reliance on manual processes (33%), affecting sales data quality and profitability.

Positive

• Over 70% of leaders see significant value in automated channel revenue process management.
• Executives acknowledge the potential of end-to-end channel automation to enhance partner relationships.
• Model N's platform aims to address channel automation challenges and improve revenue management.

Negative

• 53% of companies struggle with short product lifecycles, impacting revenue optimization.
• 52% fail to recognize sales data quality issues as obstacles to performance.
• 56% rely on homegrown technology, leading to inefficiencies and data silos.

Model N, Inc. (NYSE: MODN), the leader in cloud revenue management solutions, today announced findings from a new research study covering revenue management and channel strategy within high-tech manufacturing and B2B software companies. Model N commissioned a study conducted by Forrester Consulting, which polled 211 senior leaders responsible for revenue management and channel strategy and obtained their feedback on the state of channel processes as well as what actions companies are taking to extend the effectiveness of their channel programs.

The survey found that automating channel revenue processes across systems is difficult for firms to accomplish even though they see it as extremely valuable. Greater than 70% of respondents stated that solution based incentive management, automated channel data management, and automated MDF management would be very valuable when optimizing channel revenue processes. Additionally, greater than 65% of leaders place the same value on automated rebate management, channel partner portals, and automated channel management, making it clear that high tech executives place a high value on technology features that can interoperate across data and organizational silos.

Revenue management concerns feature prominently across the software and high-tech sectors. The research revealed the following obstacles when it comes to optimizing sales decisions and profitability:

• Short product lifecycles (53%)
• Lack of recognition/appreciation that sales data quality is an obstacle (52%)
• Reliance on manual tools and/or processes (33%)
• Lack of a unified view of channel sales data and activities (32%)
• Technology silos (29%)
• Inconsistent sales data entry (28%)
• Poor data integration/merging capabilities (27%)

“This new study and survey findings show that the crisis in channel automation is real. In many cases data is siloed, and a lack of common understanding around channel revenue processes exists,” said Model N’s SVP and GM of High Tech, Chanan Greenberg. “Numerous high-tech and B2B software companies are literally flying blind due to siloed systems and processes. They’re leaving money on the table, because they don’t possess the proper tools to gather the timely, accurate and actionable channel sales information which can make a big difference when it comes to protecting margins and revenue streams.”

The Business Case for Channel Automation

While modern channel software solutions exist, Forrester Consulting found that channel leaders are falling behind in terms of investing in and implementing channel tools that really work, causing relationships between vendors and partners to suffer. More than half of companies (56%) rely on homegrown technology solutions to partly manage their channel revenue processes, and many of these in-house solutions suffer from overlapping functionality, resulting in disconnected silos of data that are prone to duplication, errors and inefficiency.

In fact, the Forrester Consulting study states that “firms are struggling to stitch together a myriad of channel tools and manual processes, resulting in low-quality channel data that fails to provide a clear and timely view of performance.”

However, executives do see the value in end to end channel automation for uncovering high-value opportunities and improving the partner experience. According to the study, “decision makers place a high value on solution features that provide a more automated and unified way of managing their channel processes and data from end-to-end.”

According to Forrester Research’s Principal Analyst for Channels, Partnerships and Ecosystems, Jay McBain, high-tech manufacturing and B2B software companies – given the current marketing environment – should seek to build a holistic set of metrics and KPIs that accurately reflect channel effectiveness.

“Today's increasingly complex channel environment means once-reliable partner performance measurements such as revenue tiers, profit contribution, certifications, and customer satisfaction surveys fail to properly predict overall channel performance,” he states in the report entitled Unlocking The Power Of Partner Ecosystems Demands Powerful Measurement. “To succeed, B2B marketers and channel leaders must embrace techniques that will measure the expanding ecosystems' influence on the entire buyer's journey and not just the transaction.”

The survey data bears out McBain’s assertion. When asked if they could hypothetically improve the level of channel automation and integration, responses were broadly positive. Specific improvements cited included:

• Protecting our margins from fraud (49%)
• Improving the accuracy of our channel sales data (48%)
• Protecting our margins from leakage (48%)
• Empowering/rewarding our highest-performing partners (44%)
• Developing a single view of channel sales data (44%)
• Improving the experience of our end customers (44%)

According to Greenberg, Model N’s revenue management platform is designed and built to automate channel revenue processes and facilitate success in the areas of sales operations and profitability through more effective data management. “By integrating channel technologies and processes through automated, data-driven programs, brands can instill greater confidence in their channel partners and drive more revenue,” he observed. “And the research data from Forrester Consulting shows that companies are ready to embrace the benefits of channel automation – and the time to act is now.”

More About the Forrester Consulting Study

“Channel Sales Data Drives Revenue and Profitability” is a Forrester Opportunity Snapshot and custom study commissioned by Model N through Forrester Consulting. To create the study, Forrester Consulting supplemented existing Forrester Consulting research with a custom survey administered to 211 director-level and above revenue management and channel strategy decision-makers. The custom survey fielding began in October 2020 and was completed in November 2020. To learn more about how high-tech and B2B software organizations can improve channel performance and drive positive revenue impacts, download the free Forrester Opportunity Snapshot here.

About Model N

Model N enables life sciences and high tech companies to drive growth and market share, minimizing revenue leakage throughout the revenue lifecycle. With deep industry expertise and solutions purpose-built for these industries, Model N delivers comprehensive visibility, insight and control over the complexities of commercial operations and compliance. Our integrated cloud solution is proven to automate pricing, incentive and contract decisions to scale business profitably and grow revenue. Model N is trusted across more than 120 countries by the world’s leading pharmaceutical, medical technology, semiconductor, and high tech companies, including Johnson & Johnson, AstraZeneca, Stryker, Seagate Technology, Broadcom and Microchip Technology. For more information, visit www.modeln.com.

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FAQ

What are the findings of the Forrester Consulting study commissioned by Model N?

The study reveals challenges in automating channel revenue processes, with over 70% of leaders deeming automation critical for areas like incentive management. It also highlights obstacles such as short product lifecycles and reliance on manual tools.

How does Model N's platform support channel revenue processes?

Model N’s platform is designed to automate channel revenue processes, facilitating better data management and enhancing profitability through integration of channel technologies.

What percentage of companies are struggling with channel automation according to the study?

The study indicates that more than half of companies (56%) rely on homegrown solutions, which are often inefficient, pointing to a significant struggle with channel automation.

What obstacles to revenue management did the study identify?

The study identified several obstacles including short product lifecycles (53%), data quality issues (52%), reliance on manual processes (33%), and technology silos (29%).

What improvements do executives want in channel automation?

Executives cited improvements like protecting margins from fraud (49%) and improving the accuracy of channel sales data (48%) as key priorities for better channel automation.