Unfortunately, PRM still lies in the “murky-water territory. Many questions still abound like: Is PRM the partner portal of a vendor? Is PRM a software application that you buy or rent?

So, is there a single definition of PRM?

The answer is no, but basically, PRM is a business strategy for improving communication between companies and their channel partners. It is a strategy to select and manage partners, and ultimately optimize their long-term value to an enterprise as well as to the channel partners themselves. It is often compared to and sometimes confused with customer relationship management (CRM) and the long-standing arguments about the differences between PRM and CRM and whether the complex relationships of channel partnerships make it necessary for PRM to be a separate entity, or simply a part of CRM are once again reaching fever pitch.

As enterprises rely more and more on indirect channels to meet corporate revenue goals, many enterprises that have already invested time money and other resources into developing, deploying and maintaining CRM systems are now struggling to determine if these same solutions can be adapted to manage partners. Simply put, these companies are trying to classify and manage their partners as a different type of customer.

This may seem very logical, because both CRM and PRM systems are designed with processes for lead distribution, opportunity management and contracts. However, this is where the similarities end and it is extremely vital to understand that the differences between direct and indirect business processes are extremely divergent and that the ‘one size fits all’ theory could be tantamount to business suicide.

Axel Schultze, the founder of BlueRoads, a channel management software company explained the above very succinctly when he said, “comparing the difference between managing customer relationships and partner relationships is similar to comparing the difference between a bus and a plane. Both are designed to carry passengers from one point to another. However, a bus is designed to travel on land, and a plane is designed to travel through the air, Putting wings on a bus will not make it fly.”

This leads us to the question, what is the fundamental difference between CRM and PRM?

Essentially, CRM is designed to manage direct sales engagements between a sales representative and a buyer. This 1:1 mode is mainly based upon the collection and sharing of data throughout the customer lifecycle and also looks at the engagement with the customer. PRM however, is a different ballgame altogether because it is primarily designed to manage a complex ecosystem comprising of legally independent partner organizations. Unlike CRM, PRM is definitely not a 1:1 model but a 1:many model revolving around aligning business processes across the entire value chain from vendor, to partner, to customer.

In an indirect business model, vendor channel managers work with multiple channel partners and their respective sales representatives, who in turn most likely work with multiple vendors to provide a collection of products as a solution to the customer.


It is also important to remember the following:
·          Direct sales processes for lead and opportunity management do not take advantage of the leveraged network-effect of the channel.
·          Compensation and incentive programs work very differently with channel partners compared to commission and bonus programs for direct sales.
·          Sales training, technical training and ongoing education require different approaches for indirect and direct sales teams.
·          Contract renewal management between the vendor, partner and customer is very different and much more complex than direct contract relationships.

Above all, extremely vital to note is that every partner has its own way of doing business and therefore, processes between partner and vendor are rarely, if ever aligned. Reporting and measuring channel results are definitely complex processes that a ‘one size fits all’ model simply cannot handle. CRM systems were simply never designed to manage this level of complexity. Ultimately, both PRM and CRM have their own place. Some vendors insist that CRM systems can be adapted to handle indirect processes. In the real world this is likely to be impossible because legacy systems simply cannot handle the complexity of the channel. Simply put, adapting CRM to handle PRM is unrealistic.