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Ecosystem Management: A New Category That's Redefining Partnerships

Successful partner ecosystems can increase the economic value of enterprises, competitiveness, and sales growth. But fully achieving this potential isn’t easy, which is why companies like Pronto have built software to make execution simple for partnership teams. Learn more about this rising category.

Executive Summary

Successful partner ecosystems can significantly increase the economic value of enterprises, differentiation, and revenue growth. But fully achieving this potential isn't easy, with execution being a major obstacle. To simplify partner management, companies are developing software to solve pain points ranging from onboarding partners to sharing sales enablement materials to tracking opportunities and KPIs.

To better explain these products and tools, Forrester developed a new taxonomy: the Channel Software Technology Stack. One of Forrester’s categories is “Channel ecosystem management”, which IDC formally named, “Ecosystem Business Management” (EBM). Pronto just so happens to be mentioned in this category. Ecosystem management goes beyond just channel activities, helping enterprises seamlessly manage different combinations of partners with different objectives over the ecosystem lifecycle.

What is a partner ecosystem?

Here's a straightforward definition:

“[A partner ecosystem is] a community of mutually beneficial partners that are interested in achieving similar goals. Imagine the benefits to a business: open, honest two-way communication; information shared on demand and immediate response to questions.” - Michael Dalton, SVP, Unitrends

Partner ecosystems aren't new, so why all the interest now?

Executives across industries are quickly recognizing that a thriving partner ecosystem is critical for innovating quickly, delivering exponential value to customers, gaining access to new resources and capabilities, improving competitive position, and entering new markets much faster. Real life example: you may have heard about Walmart and Instacart partnering to compete against Amazon Whole Foods.

"By 2024, 90% of enterprises will utilize alliances to address customer and business requirements. Those that adopt ecosystem business models will grow 50% faster than those that don’t." - IDC

The scope of ecosystems has also expanded beyond sales and distribution to include manufacturing, R&D, and marketing. For example, in April 2020, Rolls Royce announced its Emergent alliance with data analytics experts that included Leeds Institute for Data Analytics, IBM, Google Cloud, The Data City, Truata, and ODI Leeds. Together they're striving to find better ways to support businesses and governments worldwide as they recover from the economic impacts of COVID-19.

Managing a thriving partner ecosystem is hard

To build, manage, scale, and monetize a thriving partner ecosystem is extremely complex and challenging. We all know that collaborating and communicating within one organization is hard on its own, let alone across multiple companies. Partner professionals can undoubtedly relate to the complexities of identifying and recruiting the right partners, navigating the legal rollercoaster of partner agreements, IP sharing, collaboratively building/integrating solutions, tracking co-marketing funds, doing joint sales enablement, and measuring shared success metrics.

Help is here!

With dozens of options to choose from, it can be hard to know which tools are right for your team given your partnership journey maturity. Forrester’s Channel Software Technology Stack can help serve as a guiding light. The taxonomy’s categories and brief definitions they include are:

  • Partner relationship management (PRM) – Supports activities required to manage “the entire lifecycle of channel partners, including partner targeting, recruitment, onboarding, enablement, engagement, communication, development, co-selling and co-marketing providing integrations to CRM, enterprise resource planning and marketing tools.”
  • Through channel marketing automation – “It helps organize and disseminate content and supports the execution of marketing programs, campaigns, and cobranded collateral that drive partner-led demand and accelerate channel lead and pipeline volume and velocity” with a consistent brand experience.
  • Channel learning and readiness (CLR) – “Supports partner development through the administration, tracking and delivery of educational training courses and enablement resources.”
  • Channel incentive management (CIM) – “Manages design, allocation, tracking and distribution of financial incentives to the partner ecosystem.”
  • Channel data management (CDM) – “Collects, cleanses, and aggregates transactional point-of-sale and inventory data from partners and distributors in a trusted single data asset.”
  • Channel marketplaces, financials, pricing, and inventory – “Manages indirect-sales-related revenue and costs, determines the correct value of the transactions, automates key financial reporting processes, and prevents errors in payment, commissions, and rebates. Marketplaces are starting to make their mark here.”
  • Channel Ecosystem Management or IDC recently introduced the term Ecosystem Business Management – The first six categories mainly support channel co-sell and co-market activities, while the Ecosystem Management category helps enterprises seamlessly manage different combinations of partners with different objectives over the ecosystem lifecycle. Partner constituents include Strategic Alliances, Integration/Technology Partners, OEM Partners, SI Partners, Channel Partners, Referral Partners, Influencers, and others. EBMs support Co-develop, co-market, and co-sell activities.
“Ecosystem management manages the influence, transaction, and retention channels across the entire customer buying journey. It supports recruitment, attribution, account and partner mapping, enablement collaboration, technology/API integrations, and overall ecosystem management covering all transacting/non-transacting and traditional and nontraditional partners.” - Forrester

The Need for Ecosystem Management tools and platforms

IDC states that Ecosystem Management platforms address an unmet need, with the primary challenge being that most of the current applications were designed for channel relationships and do not address the need and requirements of varied partner ecosystem initiatives and combinations of different functional participants, such as:

  • A consistent language and approach
  • Ability to collaborate, communicate, and plan for co-creation, co-sell, and co-service
  • Sharing and collaborating on data to generate actionable results
  • Gaining alliance and customer requirements
  • Sharing relevant and timely data, updates, and content to win deals
  • Measuring in a consistent manner for financial results and continuous improvement

These unique cloud-based digital platforms allow companies to facilitate the ongoing interactions between ecosystem partners, “by embracing real time business dynamics and collaboration requirements.”

IDC defined the characteristics and capabilities for ecosystem management platforms. They are:

Enterprise Management Characteristics and Capabilities

Alignment

  • Visibility and ability to identify existing and possible relationships

Relationship and Selection

  • Ability to offer, discover, and engage with partners to co-build, co-market, and co-sell joint solutions

Organizational

  • Ability to identify appropriate contacts and approval process
  • Evaluation and attainment
  • Real-time data and visibility (include trends and patterns)
  • Automated capabilities to integrate key business data from alliance and ecosystem partners
  • Interactions, contributions, measurements, and reports
  • Ability to track and report on revenue attributions, joint marketing programs, MDF (Market Development Fund) effectiveness, and alliance and ecosystem partner value
  • Partner performance and ROI analysis by alliance and ecosystem partner, geography, industry, solution, and so forth

Governance

  • Standardized shared platform
  • Common rules of engagement
  • Standardized evaluation and selection process

Best practices and methodology

  • Automated ecosystem engagement and operations
  • Ability to control visibility of multiway sensitive information and related security
  • Configurable workflows and distinct business rules
  • Common and shared tool suite

Common Language

  • Configurable taxonomy mapping for improved communications and consistency

Conclusion

Achieving the full value of ecosystems can help enterprises unlock more value. Ecosystem Management is part of a new technology stack focusing on ecosystem success across any type of relationship, not just channel or resell relationships.

The Author
Pronto Team
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