The channel audit is your sales channel barometer. It works as a “documented” experience of all your sales channels processes, operations, and technical assets. Once the audit is made, it can serve as a baseline for process and operation advances that can have an enormous impact on the profitability of your business—in terms of improved sales, lower expenses due to operational efficiencies, and a broader market share. The bottom line? The channel audit highlights what you do well and areas where you can increase. By concentrating on those areas of improvement, you gain a significant benefit over your competitors.  A channel audit can serve as your outline of all the processes, operations, and technical assets you are employing in your retail sales channels. A channel audit will tell you:

• What your sales operations capabilities are.
• What your channel business processes look like.
• What technical assets you have to support your channel sales.
• How you can define whether your sales channel strategy and execution is successful.

So, here are the top 10 tips which help you with the sales channel audit.

S E L E C T I N G  T H E P R O J E C T  T E A M

To begin the audit process, you need to identify the project team. The first team member to identify is the supervisor. The supervisor is typically an executive who identifies the need and advantages of making the channel audit and can assure cross-functional participation and resource availability. Next, fill out the project team. The team doesn’t need to be large, but it must include representatives from all the working groups within your channel sales organization.

A N A L Y Z I N G   B U S I N E S S   P R O C E S S E S

Once the proper team members are identified, most teams will tend to focus on technology first. This is to understand what systems are in place today and what systems are required to provide greater insight into channel fulfillment. But keep in mind that technology is just a tool that supports your business processes. If your business processes are broken or non-existent, technology can’t help you fix that. So instead of looking at your technology issues, begin your audit project by determining your existing business processes. This will assure that you have proper knowledge of how your business operates and what changes you need to make to efficiently run your channel business.

S T A N D A R D I Z E   Y O U R   P R O C E S  D E F I N I T I O N S

To determine and compare processes, you must follow a standard template for information. That way, you can see where processes break down or where there are operational gaps. A standardized format also assures that all project team members report the same types of information. Each one of your process descriptions should include the following elements:

• Process Name. A simple, easy to understand the name for the process.
• Describes the purpose of the business process.
• Lists the members in the business process and their responsibilities.
• Explains the events or dates that start the business process.
• Lists the inputs to the business process, including reports and metrics, and the provider of the input.
• Lists the outputs from the business process and the recipient of the output.
• Standard Process Execution. Lists the actions that happen in support of this process. Includes decision points and the path for the pattern or common decision. Alternative decisions are documented in the Alternative Process Executions section. A flow chart is often effective in mapping out the flow of the business process. Note where each member is connected with the process, where inputs are used, and where outputs are produced.
• Alternative Process Execution. Lists alternative process flows for proper deviations from the Standard Process Execution. Alternative flows include exception conditions and uncommon or alternative decision point responses.

A N A L Y Z I N G  T E C H N I C A L C A P A B I L I T I E S

The next step in the channel audit is to estimate the technical assets that support your channel processes. For each method you have defined you will want to know what reports, data files, third-party services, and applications are used to support those processes. The goal of this step is to recognize any technical capabilities that are missing and whether any technical functions are duplicated and can be combined.

I D E N T I F Y   Y O U R   M A J O R   B U S I N E S S   P R O C E S S E S

To begin your channel audit, recognize all your sales channel business processes. These processes can include, but are not defined to, the following:

Purchase Order Management and Fulfillment

Replenishment Scheduling

Sell-In, Sell-Thru, and Channel Inventory Analysis

Partner Performance Management

Market Development Funds

Keep in mind that it may be easier to break processes into sub-processes that are referenced by their parent processes. As you identify your major processes, you may also want to flag and

note what sub-processes are required. After recognizing the processes and appropriate sub-processes, you can begin documenting the processes. Documenting the processes assures that you have proper knowledge of the various tasks, resource needs, and dependencies that go into managing your daily sales channel operations.

L O O K I N G  F O R W A R D

Now you have a thorough knowledge of your channel processes, your systems and technical assets, and a roadmap for where and how you can improve those processes and systems. The sales channel audit is the first step in managing channel excellence— understanding where you are in the starting point for getting to your goal. However, there are several aspects of effective channel organizations—the destination—that we will briefly explore here. These are possible items to add to your channel excellence roadmap.

C E N T R A L I Z E   Y O U R   D A T A   I N T O   A   D A T A  H U B

The centralized data hub works as the go-to resource for updates and reports on the health of your channel. Information is recovered from one central location without cobbling together disparate reports and more importantly, automation can be used to ensure that you are aware of changes in channel positions. Though, if you have decentralized data sources, you will most likely remain uninformed of important channel conditions that need your concentration.

U S E   A N A L Y T I C S   A N D   A U T O M A T I O N   T O   D R I V E   P R O C E S S E S

Still, simply setting up a data hub does not approach the entire problem. Searching for answers in a mass of data in an appropriate and expensive proposition. This data hub also needs “automated analytics,” an automatic way to sift through a wealth of data and produce important and useful review metrics and reports that can then be automatically distributed to the appropriate parties. Using your process inputs and outputs—analytics, such as metrics and reports—that you identified in your business process analysis, you can define whether your existing information stores can automatically provide the reports, metrics, and dashboard views that you need to run your sales channels.

M A N A G E   E X C E P T I O N S

Many processes are triggered by recurring channel events or exemption requirements. How are you notified of these events or become aware of exemption requirements? An effective channel organization is informed of these conditions proactively, rather than searching for problems. Review your system’s capabilities to see if it can automatically recognize exceptions and notify the relevant individuals of these events. Effective channel organizations use technology to automatically monitor channel requirements, alert individuals of exemptions, and provide supporting data to address the exception condition.