CCID Consulting Analyzes Channel Strategy for Management Software

BEIJING, Oct. 4 /Xinhua-PRNewswire/ -- CCID Consulting, China’s leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong (Hong Kong Stock Exchange: HK08235), releases its article on channel strategy for management software.

With the in-depth application of industrial information systems and flourishing development of the SMBs information market, the market competition for management software is escalating accordingly. Brands and channels are becoming the key elements in keeping a competitive edge. Regarding how current users view brands, SAP is dominant brand name in the high-end brand sector, UFIDA and Kingdee in the medium-end brand sector and Superdata in the low-end brand sector, etc. In the high-end market, the brand is core to competition. As state-owned enterprises are expanding, merging and internationalizing, there is an ever-increasing demand for top international management software. SAP, relying on its brand advantage, continually captures market share and is developing an increasing number of enterprises in the power, iron and steel industries from top to bottom since it consolidated three significant petroleum groups. In the SMBs market, the channel is the competitive focus: UFIDA and Kingdee have formed a balance of power through their strong channel coverage and penetrating power in regional medium-sized business market. In the small-sized business market, Superdata and Weway, etc. use standardized products and various distribution channels to supply the market. As a whole, SMBs make up the main body of the management software market and the competition in the SMBs market focuses on the channel. It can be said that he "who gets the channel, gets the market." But in another aspect, the bottleneck problem for domestic management software enterprises is also the channel, demonstrated by its rigidity of strategy, low trust and weak management capability, etc.

As for the huge market of SMBs, the channel strategy for management software needs reviewing. CCID Consulting thinks:

1. The channel strategy should be strategic objective oriented

Most domestic management software enterprises have adopted the three-level channel structure where the enterprises use the channel for high-end products, cooperate with others for medium-end products and entrust agents with low-end products. This kind of structure features rigidity. It fails to carry out strategic channel planning and reform according to market change, corporate strategy adjustment and user demands. In terms of strategy, the establishment of a channel strategy should serve the realization of strategic objectives. If the objective is swift expansion of the market at low cost, enterprises should stay away from "self-operation" because of higher costs. Enterprises are required to rely on distribution agents with sufficient authorization and discount policy provided. Some enterprises like SAP who has penetrated the high-end market and Superdata who has penetrated the low-end market basically adopt the method of "agent operation." We think UFIDA should adopt this strategy in developing its international market. If it is aimed at improving the capacity to earn profits, it is better to adopt "self-operation" to effectively control products and services with high added value, and pay more attention to selecting partners. UFIDA, who is positioned in "world-class management," adopts the foregoing strategy for high-end products. In the medium-end market of SMBs, it is necessary to segment long and near-term objectives and adjust the channel strategy properly according to the objectives. Take Inspur as an example, if it wanted to expand market share, it is suggested to give a fully utilize the agent channel for its software and hardware and transfer some profits to its agents to encourage them to expand market.

2. Exploit the fully favorable conditions and avoid unfavorable ones to realize complete channel marketing

The supply chain for management software is complicated with a great variety of channels for products to reach users, such as direct sales, agent, e-channels, partner, etc. The process of providing value to users cover many service aspects including consultants, channel partners, industrial solution providers, system integrators, independent software vendors (ISV), implementation providers, training and maintenance service, etc. The advantage of the agents lie in their market coverage and penetrating power, that of industrial consultants, integrators and ISV are their professional service and e-channels rely on their collection of independent users and swift services. Therefore, it is necessary to analyze the advantages of different types of partners in the construction of channels for management software, and meet users’ ever-changing requirements in order to achieve a win-win situation and complete channel marketing. Using strategic objectives as the orientation tool are still the principle for achieving a combination of advantages for complete channel marketing, while the trust in channel advantages are the basis for mutual cooperation and benefit.

3. The basis for the channel construction is to approach customers, serve them and achieve the maximum customer value

The function of the channel lies in its approach to customers. With the booming of the SMBs market, traditional channel of management software should strive to extend their network to below tier-3 cities, cities at prefecture levels and at a county level. On the other hand, given the advantages of the Internet, calling centers, digital televisions and other e-channels, the direct gradual abortion of independent customers, shortens the distance between customers and the manufacturer. The next function of the channel is to provide product and service value to customers. At every point of contact with customers, enterprises should improve the professional service ability of the channel in order to better service. Therefore, management software manufacturers should grow with their channel and not just regard it as a marketing tool but as a way to cultivate agents’ capability in value-added services to improve customer value, thus realizing the goal of a win-win-win situation.

About CCID Consulting

CCID Consulting Co., Ltd (hereinafter known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: HK08235), is directly affiliate to China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen, Harbin, with over 300 professional consultants and industry experts. The company’s business scope has covered over 200 large and medium-sized cities in China. Apart from home market development, CCID Consulting establishes international cooperation links across the United States, Asia-pacific area and Europe, by setting up agents in the U.S, Japan, South Korea, Australia, Singapore, Italy and Russia, along with the aim to be global.

Based on four major competitiveness of the powerful data channels, industrial resources, intensive knowledge and deep understandings of information technology, CCID Consulting provides customers with consulting, research and IT outsourcing services covering strategy planning, IT application, marketing strategy, human resources and information technology outsourcing. Her customers range from industrial users in IT, telecommunications, energy, finance, automobile, to government departments at all levels and diversified industrial parks. CCID Consulting commits herself to be the NO.1 consultant in strategic consulting, the No.1 Brand for Strategic Consultancy, No. 1 advisor for Enterprise Management and the No. 1 Consultant for Government Decision-making.

For more information, please contact:

Cynthia Liu

Coordinating Manager

CCID Consulting Co., Ltd.

Tel: +86-10-8855-9080

Email: liuyan@ccidconsulting.com