By Jim Holland, Sr. Product Marketing Manager
Looking back at 2020, there are many who would like to move on and are ready for a new year. However, where there are challenges, there is growth and opportunity. This year-end post takes a close look at some of the opportunities, trends, and outcomes in High Tech and what may be in store in 2021 from a Model N perspective.
As Lareina Yee, Senior Partner at McKinsey & Co shared In the Technology Industry in 2020 and Beyond, “In the last century, we often thought about technology as enablement, as the back office, as something that we use to support our businesses. In this century—and certainly, post COVID-19—technology’s going to be very much in the front. It will be the competitive differentiator for how all businesses and ecosystems work.”
Two key areas that Model N has seen high tech companies focus in 2020 has been modernizing pricing and automating more critical areas of the channel network. These two areas have been improved by artificial intelligence (AI) and machine learning (ML) as key themes for revenue and channel performance teams. Why?
In a conversation surrounding The State of High Tech Revenue Syed Alam, Managing Director and Senior Partner, Accenture and Model N’s Chanan Greenberg, SVP and GM High Tech at Model N discussed the why.
Syed shared, “There are several things driving the market. First, companies are driving more revenue through channels. Some companies that haven’t been used to working through channels or distributors are getting more revenue and not used to managing them. That is adding to the complexity. Second, as companies diversify their portfolio, they are getting into newer businesses or new segments, and they are used to what’s driving the segment revenue. They are having issues managing tier 1 and tier 2 suppliers and learning how to manage those suppliers also.”
Chanan added, “There are a variety of macro trends that include, the buying journey for customers has morphed in an accelerated way in the last five years, buyers are more self-educated, and their points of interaction are focused on service. By the time buyers are ready to engage, they are ready to interact and the speed of business picked up.”
With the complexities of driving more revenue through channels, more educated and prepared buyers, and how high tech companies manage multi-tiered suppliers, what should companies consider when moving toward diversity and growth in 2021?
“My advice is to stop thinking about pricing in silos” shares Greenberg in a conversation with Impact Pricing. “A lot of people tend to think of pricing either as something that they’re doing up front when they’re setting a price book or when they’re determining how they’re going to execute the pricing and in different pricing rules and tools that they’re going to use for quoting and contract negotiation. And they don’t really think about the fact that pricing has a waterfall that continues well beyond that.”
“It continues into how are you going to do discounting into the channel, whether it’s the shipping and debit process or spar debit and the rest of High Tech, whether you’re paying out a rebate, whether you’re paying out price protection on inventory that outed, that is out there. All these things at the end of the day bring down that waterfall to its final net result and pricing doesn’t end with optimization. It doesn’t end with analytics and it doesn’t end with the baseline execution of a price and the close of a contract. It continues operating. And unless you can really bring these things into a single continuum, you are invariably going to leave money on the table without any doubt.”
As companies diversify their portfolios and expand their channel networks, what can organizations do in 2021 to better prepare and automate?
In his post, Measure What Matters: Unlocking the Power Of Partner Ecosystems Demands Powerful Measurement, Forrester Principal Analyst Jay McBain comments on the market environment. “Channel leaders are quickly adapting to new channel realities and looking to better prove the business impact of channel programs and tactics to garner new investments. Building go-to-market and channel strategies on data-driven insights present a unique challenge, as many of the data sources are external and stubbornly time-delayed.”
How can you build better channel strategies, automating much of the processes?
In October, Model N announced a new partnership with Channel Impact, a full-service channel specialty firm that enables technology companies to build, execute, and measure a more impactful channel. The partnership brings a value-added offering that unifies Model N tools with Channel Impact’s best-in-class managed services and consulting built to enhance companies’ channel strategies and execution, delivering measurable revenue results.
We wish you and your organization a successful and prosperous 2021 as you seek to drive more revenue, margins, and channel success!
If you would like to learn more about how Model N can drive more revenue through your channels with intelligent pricing and quoting, go here. To listen to more insights shared in 2020, click here. To speak a subject matter expert, go here.
