COMPANY INFO

Founded in 1981 and based in California’s Silicon Valley, LSI Corporation is the third largest fables semiconductor company in the world, and one of the leading manufacturers of technology for mass storage and consumer products. This includes controller ICs for storage systems and chips for DVD players and other set-top devices.

LSI is one of the few high-tech manufacturers to win two Emmy Awards for graphics chips innovations. The company recorded full year 2006 revenues of $1.98 billion.

LSI’s worldwide sales channels include a network of manufacturers’ representatives and distributors such as Arrow Electronics, ASI, Bell Microproducts, Ingram Micro, MA Labs, MicroLand Electronics and others. OEM products are sold direct to some of the world’s leading manufacturers.

THE CHALLENGE

In the competitive world of semiconductors, sales cycles can be long, and product design decisions are often locked in far ahead of a new product release. Designers and manufacturing engineers are constantly struggling to cost reduce their products by seeking alternate sources of components and lower prices from existing suppliers. This leads buyers and salespeople to engage in back and forth negotiations on component delivery times, quantities and prices.

A common practice in the semiconductor industry is for component distributors to make special pricing requests to manufacturers, to meet competition or out-maneuver another supplier by providing lower than standard pricing.

“Special pricing requests, authorizations and tracking those requests are critical elements of our sales and marketing processes,” explained Rick Flores, Distribution Sales Manager for LSI Corporation. “A strategic percentage of all major purchases in our distribution business involves special pricing requests.”

Special pricing consideration is traditionally granted to manufacturers’ most loyal and strategically important channel partners and customers who need to reduce their overall bills of materials. Special pricing strategies are also used to meet competition, move finished inventory from warehouses and expand a vendor’s market share.

“Approving special pricing requests has to be based on the opportunity at hand,” Flores said. “You can’t issue special prices across the board to everyone. You need to know something about the customer, the opportunity and the business that you’re going to win. When you have the right tool to collect this information for management to make the right decisions, it can really enhance your bottom line.”

WHY CMR

Several years previously, LSI adopted CMR’s Web-based point-of-sale data (POS) and inventory reporting services to give its sales operations people more accurate, up-to-date information for tracking customer activity and sales trends. The implementation was so successful, that LSI asked CMR to help them improve the way they received and processed special pricing requests.

“We frequently receive inquiries via our sales people from distributors who ask us to deviate from our standard pricing so that they can specify one of our components instead of a part from a competitor, explained Vanessa Miller in LSI’s finance group. We have certain business rules that we need to follow that sometimes require upper management to get involved.”

As a result of past successes, CMR became LSI’s supplier of choice for channel management tools.

“Our financial applications and ERP systems didn’t have a good provision for handling and tracking special pricing requests. Because we have such a good relationship with CMR for other channel management solutions, it made sense for us to leverage CMR to develop a more efficient way for us manage special pricing requests.” Miller added.

INCREASING OPERATIONAL EFFICIENCY

LSI’s field sales team has the authority to approve some transactions within certain parameters. Other times, senior executives have to get involved. The SPA application receives all requests from channel partners and automatically routes the right requests to the right people at LSI, to reduce the time required for approvals and order acceptance.

“Our goal in designing the CMR Special Pricing Authorization Web-based application was to fully automate a critical channel management process that has historically been slow, inefficient and unresponsive to customer needs,” explained Del Heles, president of CMR. “LSI and other companies use SPA to achieve easier and faster turnaround of special pricing requests to enable their distributor sales teams to better serve their customers and empower their channel partners to close more deals and produce higher revenues.”

Channel partners fill out a user-friendly online form that matches the look and feel of LSI’s other online resources. The requestor is prompted to enter all the required information and the form is submitted only after all required fields have been completed. When a new claim is ready to be reviewed, LSI’s processors receive an automatic alert, typically within five minutes of submission. Channel partners are instantly notified when requests are approved, modified or declined.

IMPROVED MARKET FEEDBACK

The Special Pricing Authorization application from CMR now helps LSI win more competitive opportunities, increasing their market share and monitoring the effectiveness of pricing strategies by automating, managing, tracking and analyzing special pricing requests from resellers, distributors and field representatives.

LSI’s marketing managers can use a Web-based interface to better identify and solve product pricing and market education issues. They receive regular feedback from channel partners in the form of better-documented special pricing requests and justifications from sales people.

If an unusual number of requests are received, this may indicate that a product is overpriced for the market or that an upgraded product is being promoted by a competitor. It may also show that more detailed product information is needed in the market or that sales people require more thorough training.

“The CMR special pricing solution is a critical strategic tool used by our distribution sales organization, and the support that we get from the CMR development team is outstanding.”

“Automated special pricing processing helps us book more business, by quickly enabling our distributors to purchase more of our parts versus lower priced parts from our competitors.”

“CMR came in here and gave us a special pricing tool that met our requirements and stayed under budget. SAP couldn’t do that and Oracle couldn’t do that. That’s why we love CMR.”

BENEFITS TO THE ORGANIZATION

• Accurate, up-to-date POS information enables the tracking of customer activity and sales trends
• Central place to gather information so that everyone can see a history of each account
• Channel POS reports help the sales team strategize about how to entice customers to purchase
• Channel Inventory itemizes inventory balances by account and improves movement of inventory

COMPANY INFO

LSI Logic is an innovator in the semiconductor and storage systems markets. Their system-on- a-chip integration technologies and portfolio of intellectual property building blocks have laid a foundation for success in the global semiconductor market. Founded in 1981, the company’s 2006 market cap is $3.7 billion. LSI offers three enabling system-on-a-chip
technologies, platform ASICs, standard-cell ASICs, and standard products, as well as host bus adapters and supporting software for its global customer base.

THE CHALLENGE

In-depth knowledge of the customer and point-of-sale activity is a critical aspect of any successful marketing and sales strategy. Having an accurate, up-to-date snapshot of the customer base is especially vital to upselling opportunities.

This kind of timely, reliable data is especially difficult to achieve in a company that sells through two or three tiered distribution Channels.

“A big part of my job is to identify products that existing customers aren’t buying from us,” explained Andy Pan, LSI Logic’s Director of Sales. “I then send an outside sales rep to make a presentation or design a promotional campaign around a certain segment of customers. To do this, I need accurate, up-to-date sales information.” Until recently, Pan’s team had to rely on handbuilt Excel spreadsheets that were time consuming and cumbersome to maintain. “We had another system that was supposed to help us with this,” said Pan, “ but it didn’t fit our business model, so we ended up having to cut and paste from several sources into Excel. Needless to say, this wasn’t a very effective solution.”

A YEAR OF SEARCHING FOR THE RIGHT SOLUTION

About two years ago, LSI decided to evaluate a new product developed by their database vendor to address the challenge of gathering and processing POS data. After using it for a year, they gave up. “The product was just too complex,” said Pan. “It was more than we needed, so after a year of implementation and testing, we decided to abandon it and look for another solution.”

According to Pan, LSI evaluated four or five other vendors and ultimately chose CMR’s Channel POS and Channel Inventory products. “Most of the companies we considered were larger than CMR and their products were more costly. Overall, CMR offered the best features for the best price.”

Today, instead of manually extracting the data from various sources, LSI’s asks all of its distributors to send their POS data files in EDI format directly to CMR. POS data is normally sent every month, and inventory figures are sent weekly. Once CMR receives the data, it is ready for viewing at LSI in report format in a matter of hours.

CHANNEL POS REPORTS HELP SALES TEAM TARGET CUSTOMERS

Collecting the data is just the first step in the process. Even accurate data isn’t helpful if it’s not presented in an intelligent fashion. Toward this end, Channel POS organizes and displays POS records into comprehensive Crystal Reports that show quarterly or monthly breakdowns by territory, reseller, product, distributor, and/or price.

“I can easily determine what a given customer is buying before I contact them and identify when and to whom to upsell. This enables me to have a topical conversation with the customer,” said Pan. “I can also use the data to target customers who aren’t ordering certain products from us and design a marketing campaign around them.”

Pan’s sales team also leverages Channel POS to better manage relationships. “It is an excellent organizer of information and central source of data on each Channel partner,” Pan observed. “We can even input free-hand data in the notes section of the program, so that everyone in the organization can view the history of a given customer.”

Pan also uses Channel POS to validate that outside sales reps are following up on his leads. “I can see customer activity at a glance, so I know exactly what kind of attention each one is being given, and I can step in if necessary to make sure we are making the most of each customer relationship.”

CMR’s Channel Inventory module helps LSI consolidate and organize inventory by partner and SKU. “We can now figure out each week, with a high degree of accuracy, what each partner has what on hand so that we can find the right partner for the right customer and get products moved,” Pan added.

“Channel POS is very simple to use. Just point and click.”

“Now everyone in the organization can view the entire history of any customer. It’s an excellent central source of data for each customer, right at our fingertips.”

“The Channel POS reports show very thorough breakdowns - by product, price, quarter, month and customer - so that we can see what a customer is buying before we contact them.”

BENEFITS TO THE ORGANIZATION

• Accurate, up-to-date POS information enables the tracking of customer activity and sales trends
• Central place to gather information so that everyone can see a history of each account
• Channel POS reports help the sales team strategize about how to entice customers to purchase
• Channel Inventory itemizes inventory balances by account and improves movement of inventory

COMPANY INFO

Founded in 1986, D-Link provides end-to-end network solutions using award-winning products that integrate seamlessly with a variety of devices and applications. Its mission, to make networking easy and affordable for its customers, has paid off.

D-Link is currently the leading networking company in the small-to-medium business (SMB) segment, providing almost 10 million connection points in Q2/2005. Company revenues total more than $966 million. D-Link has 90 offices worldwide, offering thousands of networking products in 16 major categories including cable/DSL routers, USBs, print servers, VPN/Firewalls, and power- over-Ethernet devices.

THE CHALLENGE

Being the leading supplier of a broad range of products doesn’t come easy to any company, no matter how many awards its products have received. Just getting inventory out of the warehouse and tracking it through distribution and reseller Channels are huge tasks.

When Robert Robinson joined D-Link as Director of Business Channel Sales, he had lots of data to help him measure and manage partner Channel sales. But he was concerned about whether he could use it in a credible way.

“You can’t go into a sales meeting and make a forecast or justify a budget if you don’t trust the data,” Robinson said. “A report containing three-week-old data just doesn’t hack it.”

Though all D-Link distributors are required to send monthly point of sale (POS) reports, each distributor uses different product categories, subcategories and SKUs. Data isn’t always accurate or complete, and there is no standard file format used in the industry.

Though this lack of data standardization is common in the manufacturing industry, it doesn’t make Robinson’s job any easier. “I was hired to build a strong Channel,” Robinson said. “I needed to know where we had been in order to predict where we were going. We tried to improve the accuracy and consistency of our data internally, but it usually took us three or four weeks, and even then we were never sure that it was correct.”

CMR’S CHANNEL POS DELIVERS UNIFORM, ACCURATE DATA

Realizing that he needed better quality data,Robinson and his staff evaluated four vendors who specialize in the collection and processing of multiple distributors’ POS records. After a 90-day proof of concept, they chose CMR’s Channel POS.

“CMR was eminently more capable,” Robinson recalled. “They were unique in the breadth of their technology as well as their personal service and commitment to getting the job done.”

Unlike competing products, CMR accepts data in any format, including EDI, spreadsheet, email, FTP and HTML, among others. Perhaps even more importantly, instead of three or four weeks, it takes CMR less than a day to collect and scrub the data.

“Our distributors still send their data in whatever format they want, via any delivery method they want,” Robinson explained. “CMR applies business rules to the data to make the database uniform and accurate. The end result is that we now have immediate, reliable, actionable data upon which to make decisions.”

Once D-Link’s Channel data is processed, it becomes available online from the CMR Partner Avenue portal. From Partner Avenue, Robertson and his sales group can view reports and analyze data using OLAP cubes. “CMR offers more than 30 standard Crystal reports, and they have also helped us customize several reports to help us extract information we never had before,” Robinson commented.

ACTIONABLE DATA HELPS GROW THE BUSINESS CHANNELS

“We really wouldn’t be able to manage our Channels this efficiently without Channel POS,” Robinson added. “It’s given us the opportunity to see where we are successful and where we are not and make incremental adjustments month by month.”

Robinson has recently begun using CMR’s escalating alert system. This feature triggers automatic email to D-Link partners, notifying them of deadlines for turning in their sales information. If the initial deadline isn’t met, a second more urgently worded alert is sent.

“The results benefit everyone. The faster Channel POS receives and processes our sales data, the sooner our sales reps know if they are meeting their numbers. It also accelerates financial reporting, because we can post validated numbers to the general ledger sooner than before.”

More reliable data helps Robinson manage Partner Program Levels, which he can now easily determine from Channel POS data. It is also making Sarbanes-Oxley compliance reporting more efficient.

“We need to be able to document sell through accurately, because Sarbanes-Oxley says that you can’t recognize revenue until you reach the point in the process where the product cannot be returned.”

Robinson is also taking advantage of the Reseller Profile module. CMR developed this Web solution to automate the process of reviewing and approving Channel applicants who wish to become authorized resellers. With a click of a button, the reseller can submit an application for D-Link’s review and approval. The reseller profile information can then be used for future reference alongside its sales history.

According to Robinson, the ROI of using Channel POS is substantial. “CMR’s Channel POS is far less expensive than doing it in-house, and we get far better results. It allows me to keep my operations and sales people focused and to see where we’re heading so that we can take appropriate action.”

“We now have a much higher ability to drive the business in a specific direction based on the data we get from CMR. As a result, we’ve been quite successful in boosting our business networking market in U.S.”

“CMR has invested heavily in the best individuals and database and server technology. That investment is clearly reflected in its finished product.”

BENEFITS TO THE ORGANIZATION

• More accurate information on Channel performance yields more effective marketing plans and programs
• Accurately documents returns, promotions and rebates as a percent of actual sales
• Features standard and customized reports

COMPANY INFO

A wholly owned subsidiary of Hitachi, Ltd., Hitachi Global Storage Technologies (Hitachi GST) is a storage technology leader, created through the merger of Hitachi’s and IBM’s hard disk drive businesses.

With approximately 26,000 employees worldwide, Hitachi GST offers a comprehensive product portfolio that sets the standard for hard drive miniaturization, capacity, performance and reliability. Their products include a range of hard drive products for desktop computers, high-performance servers, notebooks and consumer devices.

THE CHALLENGE

Being able to monitor Channel performance is critical to all businesses. Without access to timely data, a company cannot respond to changing business conditions and customer needs.

For several years, the marketing, sales and Channel development departments at Hitachi GST had been looking for an easy, flexible method of managing POS and Channel data.

“We started from square one,” explained Barbara Cook, Channel Development Manager at Hitachi GST. “Initially, the sales department exported data from the central SAP system into Excel. Cumbersome as that was, they were able to obtain certain figures, such as quarterly rebate calculations. Within my department, though, there were no automated tools available and no efficient way to get the data we needed.”

In 2004, Cook, her staff and the sales and marketing departments began evaluating solutions that would help them automate distributor and reseller data collection, processing and analysis. Their ultimate goal was to obtain clear, timely data in an easily accessed format that would help them better set goals and more effectively align resources.

“We assessed products from CMR and also one other vendor, whose offering was new and untested and not as robust,” said Cook. “The decision to go with CMR’s Channel POS was fairly obvious from the very beginning, but it was their 90-day proof of concept that cinched the deal. It went very well and clearly demonstrated the power of their solution.”

ACTIONABLE, TIMELY DATA IN OLAP CUBE AND CRYSTAL REPORT FORMAT

Channel POS is a supply chain tool that helps Hitachi GST streamline the collection, processing and analysis of POS data from seven distributors in the United States and nine distributors in Europe.

Each month, all distributors are required to send their POS data in a standardized format to CMR. This data is automatically imported into the CMR Channel POS database from which OLAP cubes and Crystal reports can be extracted. POS data can also be exported to Excel for further “on-the-fly” manipulation.

Today there are 30 regular users of CMR and another five to ten that use it less frequently. The Channel Marketing department uses the POS reports to view a snapshot of buying patterns among its customers and to determine if specific marketing activities are having any effect on sales.

“It tells us more about our customers’ buying patterns, so we can target our communications better,” said Cook.

TAILORING MESSAGES TO THE RIGHT CUSTOMER

The Channel POS data is now helping Cook’s department identify customers who might need special attention. For example, of the nearly 30 standard Channel POS reports that are available, several of the distributor and reseller reports can be used to generate target lists for special marketing campaigns around a new product.

“We can use the POS tool to pull out customers who have ordered similar products in the past and tailor the new product campaign to them. We know these customers are interested so that makes our job easier,” Cook added.

“From this report we can pull the info about names and addresses into an Excel spreadsheet.”

This also helps Cook target “lost” customers so that her group can conduct reacquisition campaigns. “Channel POS can very quickly identify a set of customers who might have been ordering our products in large quantities two years ago, but are no longer doing so,” said Cook. “With that list at hand, we can find out why we haven’t heard from them in a while and target a special marketing campaign to them.”

ROI AND REBATE DATA READILY AVAILABLE

Channel POS is also being used at Hitachi GST to track rebates, calculate the return on investment of various marketing campaigns and to give the sales team a window into the state of their accounts.

“If sales are down for a given representative, Channel POS can identify trends in customer orders so that the rep can contact the customer and find out what’s going on,” said Cook.

In a similar manner, Channel POS can pinpoint whether resources -- both time and people -- are being effectively allocated. “We have been quite surprised to find out that the resources we were giving certain customers just weren’t bringing results. This has allowed us to refocus our energies and resources on the accounts that are buying the most.”

MARKETING PLAN ANALYSIS

On the marketing side, CMR is helping Hitachi GST with their 2006 marketing plan. For example, Channel POS can correlate POS data against various trade show attendee lists. “In that way, it helps us decide if we should go to a particular trade show,” said Cook. “We can immediately see which shows will pack the most punch.” This has helped her eliminate trade shows that cost a lot but aren’t being attended by their biggest customers, and vice versa.

“Channel POS gives us a snapshot of our customers’ buying patterns with drill down capabilities, so we can target our communications better.”

“CMR is terrific with custom reports. If I send in a request for a special report, the response is immediate.”

“The decision to go with CMR’s Channel POS was fairly obvious from the very beginning, but it was their 90-day proof of concept that cinched the deal.”

BENEFITS TO THE ORGANIZATION

• Enhanced customer relations - snapshots of buying patters enable more effective customer communications
• Increased sales from identifying how resources can be more effectively allocated
• Reduced costs from the ability to identify the right trade shows to attend

COMPANY INFO

Based in Austin, Texas, Buffalo Technology (USA), Inc. is a global provider of award-winning networking, memory, storage and multimedia solutions for the home and small business environments as well as system builders and integrators.

Among its many innovative products is the first combination DVD player/high-definition media streamer, which received an Editors’ Choice award from Laptop in fall 2005.

THE CHALLENGE

With four major distributors in the United States and direct sales to leading retail chains such as Best Buy™, Micro Center and Fry’s Electronics, Buffalo’s ability to get accurate, timely snapshots of POS and inventory data is critical to the success and continued growth of business.

Toward this end, Erny-Jay Mezas has used many different tools during his career in marketing and sales. But it wasn’t until he joined Buffalo Technology as Director of Sales in 2004 that he found a solution that was truly flexible enough to meet all of his department’s needs.

“It’s not enough to have raw data,” said Mezas. “You must also trust the data and be able to manipulate it to meet your day-to-day requirements.”

CMR ADDS VALUE BY OFFERING CUSTOMIZATION SERVICES

At Buffalo Technology collecting usable data has always been a top priority. “Fortunately, we’ve always been able to work with our partners so that the files they send us are fairly uniform,” Mezas observed. “Even so, there is always some cleaning up and validation that has to take place.” For several years Buffalo Technology has relied on San Diego-based Computer Market Research, Ltd. (CMR) to transform raw POS and inventory data into actionable business intelligence. Mezas no longer has to worry about collecting, cleaning, standardizing, and processing Channel data in house. Once a month, Buffalo Technology’s Channel partners send POS data to CMR.

In a matter of hours, the data is processed using CMR’s Channel POS solution and made available in Crystal Report and OLAP cube formats. Inventory data is processed weekly in a similar manner using CMR’s Channel Inventory tool.

Mezas’ team also benefits from the ability to view detailed snapshots of the day-to-day business - such as sales revenue, results of promotional activities, inventory levels and other trends. But, his strongest kudos are given to the customization services that CMR offers.

“The most valuable benefit of CMR is its ability to customize and cater to our specific needs,” Mezas commented. “They can adapt our reports and make changes quickly. That’s definitely important to the agility of our business and something that is a very rare service in our industry.”

In addition to creating customized reports for the sales team, CMR has also designed OLAP cubes that are populated from different fields within the central database. “We have a choice,” said Mezas. “We can view a Crystal report that has been specially designed to suit a given purpose, or we can get the raw data in an Excel spreadsheet that we can format and sort on our own.”

CALCULATING SALES COMMISSIONS IS NOW A BREEZE

In the past, Buffalo Technology had to calculate sales commissions for its manufacturers’ sales representatives manually. The process of extracting the data, making the calculations and verifying their accuracy took several days. Now, using customized CMR reports, the entire process take under two hours.

Revenue is broken out by state. Within each state, the data is further sorted by product category. “It’s easy for us to see each sales rep’s territory,” Mezas said. “That ensures that we are paying appropriately, and it also helps the reps see how well they are doing and identify which product areas to spend more time on.”

CMR PARTNER AVENUE AND RESELLER PROFILE ELIMINATE PAPER

Buffalo Technology also uses the CMR Partner Avenue and Reseller Profile programs to administer the company’s VAR program. From a customized Web site, prospective resellers can submit an application to become a VAR. The applicant’s profile is automatically sent to Kathy Brown, the director of Buffalo Technology’s reseller program. Once a prospect has been accepted, a welcome letter and additional instructions are automatically sent to the new VAR.

“I don’t have to do anything on paper,” explained Brown. “There are no lists to keep, no Excel spreadsheets to update daily. Everything is collected for me automatically. I receive more than 100 applications per month, so this is a tremendous timesaver for me.”

In addition to automating the application process, Buffalo Technology uses Partner Avenue to track revenues from resellers. Each VAR can also use it to view its own sales goals and actual revenues.

“In addition to top level summaries, I can drill down by territory and product category with just a couple of clicks of the mouse.”

“It is a huge benefit to be able to accurately forecast what we need on the manufacturing side and communicate our expectations to our manufacturers based on current run rates and current inventory levels.”

“Channel POS saves sales reps an incredible amount of time that can be used to sell to new accounts. It tells them immediately if their revenues are on target, both for the overall customer base or down to a specific customer.”

BENEFITS TO THE ORGANIZATION

• Reduced the time needed to calculate and verify sales commissions from several days to less than two hours
• Decreased administrative tasks - sales reps now have more time to build customer accounts and relationships
• Improved forecasting capabilities enable better, faster decisions