ERP FOR THE CHANNEL
At a high level, ERP systems like SAP, Oracle, JD Edwards, NetSuite and Microsoft Dyamics are focused on transactions, data, and information within the 4 walls of an organization. They provide excellent coordination and control of activities within the organization.
But, these platforms are not purpose-built for data and transactions that originate outside of the organization - as with hundreds or thousands of channel partners a typical OEM might have.
In the past 10 years, many companies - especially tech-based firms serving B2B markets - have seen a large shift away from working with customers directly to leveraging channel partners.
This has created many advantages, but at the same time has put a strain on IT systems to track and manage these channels. The result is a fuzzy understanding of what's actually happening in the channel and ultimately, revenue loss.
ERP - legacy SYSTEM OF TRUTH built for direct sales
In the 1990s, companies adopted on-premise Enterprise Resource Planning (ERP) systems to manage order processing, fulfillment, production planning, inventory control, financial reporting, HR, and many other core business functions.
Broadly speaking, these ERP software systems were and are highly complex, inter-related modules that act as the central nervous system of organizations. They were largely designed to support the "sell direct" business model - that is, a firm's own sales force selling its products directly to end customers.
Millions of dollars and many person-years of effort were spent to create this "one system of truth" for the classic direct-sales organization. By "one system of truth" we mean a single, recognized data set that feeds all related functions and reporting - production, accounting, sales, and so on. There are controls and processes to ensure data integrity, consistency, and quality.
But this no longer works for the channel. See why you need a single system of truth for channel management.