Transaction and Process

Transaction and process are a couple of words that are often used interchangeably though they mean different things.  They’re not opposites like jumbo and shrimp that would make an oxymoron.  Transaction and process are a pair more like data and information.  They’re related not as synonyms or antonyms but through a hierarchy.  You can cultivate data into information and a transaction frequently happens at the end of a process — for instance, a sales process yields a sales transaction.

I believe that vendors think in terms of transactions but that customers think more about the process.  "How many closed deals can I expect this quarter" is a vendor thing while, "how does this product solve my business problem," encapsulates the customer.

Much of this could be applied to the channel.  As we’ve observed before, sometimes partners look and act like equals in business while at other times they behave more like customers.  So it’s good to ask ourselves if our partner-facing systems meet our partners’ needs for processes such as education, marketing, or lead nurturing, or are we treating these processes more like transactions focusing on our desired end result instead of their ongoing needs?

Everyone needs the insight and knowledge that a process provides when dealing with something new.  That’s certainly true for partners that are betting their futures on a relationship with your company.  That’s why any partner program has to have a balance of components that appeal to both needs — transactions and processes — and I mean that in both directions.  Partners need transactions like getting paid and vendors need processes like understanding the pipeline.

But here’s the thing.  You can manage partner level transactions with not much more than spreadsheets to keep lists of various things that are important to the relationship. But even with this you’ll top out and either have to hire more people to manage the spreadsheets or decide to get a Partner Relationship Management (PRM) system.  Without a PRM system, you’ll still just have a lot of data and not much understanding of how your channel works, i.e. its processes.

When you get a PRM system the big benefit will not simply be headcount reduction or more accurate record keeping, though both are useful.  The biggest benefit you will discover is your ability to expand your relationships with your partners by better understanding the processes they use to get results.  The ability to know more about what drives partners, and most importantly, to understand which ones need a little help and that starts when you collect partner data within your main business processes and analyze it. 

Business itself is a process not a transaction and a process orientation helps everyone better understand needs on the way to the transaction.  Understanding process can enable businesses to trouble shoot transactions for bottlenecks too.

The fact that a business expects to be ongoing for the indefinite future speaks volumes about the importance of process.  Without a firm process orientation there’s always a danger things could grind to a halt.  I’ve seen many companies with channel operations that have built their own PRM systems.  The thing that many have in common is a focus on transactions with the partner base.  When these companies ask me what they can do to improve business flow through the channel I invariably tell them to investigate the efficiency of their processes.  At that point the confusion about transaction and process becomes clear and often the vendor discovers that there’s a lot unknown about how the channel works.

When you cross over from transaction-oriented spreadsheets to process driven channel management, you inevitably step into your customers’ shoes and that forces you to see the world as they do through processes rather than only through your eyes that tend to look for transactions. 

This is less rocket science than common sense.  I see the same thing happening in CRM as businesses migrate from pure transaction oriented CRM to process orientation.  The reality is that we live in a hyper competitive era when multiple vendors might be able to supply the same needs.  The vendors that do best are the ones that put on a pair of their customers’ shoes.

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