Why are alliance sales so misunderstood? After all they represent a dramatically lower cost of sale than other alternatives? Is it because they involve joint value creation? make up your own mind by reading this simple presentation.
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Alliances - The Ugly Duckling of Sales
1. The Sales Ugly Duckling
– Alliances!
How Alliance Best Practices Can
Deliver Competitive Advantage
2. Contents
The following topics are covered in this briefing:
1
Why should organisations partner?
2
Why is a best practice approach the best option?
3
What do we mean by „Alliance Best Practice‟?
4
Why isn‟t everyone following a best practice approach?
5
6
What evidence is there that best practices = best results?
7
Appendices – Further supporting evidence and documentation
Page 2
What would be involved in developing an alliance excellence model?
3. The prime purpose of alliances - sales
„What is the main purpose of alliances in your company?
- We survey IT executives at VP level
and above regularly.
- The last survey was conducted in
2012.
Percentage Responses
New Technologies
- The question we posed was:
- What is the prime purpose of
alliances in your organisation?
- The top five answers are shown
opposite.
New Skills
New Markets
New Products
New Sales
0
20
40
60
80
4. Why should we partner?
Alliance sales are the cheapest type of sales available:
Getting Others to Sell Your ‘Stuff’
Organisations need to grow to survive.
Typically they have done so by using the
„build, buy, ally‟ model of business development.
The recession has made the first two of these
growth options difficult hence attention is now
turning to the third option – ally.
Organisations are now actively looking for the
best way to ally with a range of:
suppliers, competitors, customers and others.
Research from a multiple series of sources
suggests that the best way to ally is by using a
best practice approach.
This short paper describes: the rationale, the
supporting justification, and the most cost
efficient method of implementing such alliance
best practice programmes.
Page 4
5. Why is a best practice approach the best
option?
Best practice = higher return at lower cost in less time
Approved
Theory
Following a „best practice‟ approach has been recognised as a
successful business strategy for many years. (See for example the
Total Quality movement e.g. Baldridge and the European Foundation
for Quality Management).
Advantages
Such programmes have unmistakable advantages over alternative
proprietary solutions. Typically these are: greater speed, lower
cost, better quality, predictability of outcomes and less risk.
Proven Success
Strategies
By relying on proven success strategies that have been developed
previously organisations will enjoy all the advantages above in
developing their alliance sales programmes.
Better
Results
Page 5
Results from best practice alliance sales programmes show a higher
return in less time at a lower cost (see later research justifications).
6. What do we mean by ‘Alliance Best
Practice’?
Best Practice = Doing the right things in the right order:
There is a great deal of
confusion regarding the
term „best practice‟ or
„best practices‟
particularly when used to
describe strategic
alliances.
Page 6
In this briefing paper we
describe „best practice‟ as
systematised common
sense. An
approach, behaviour, proc
ess or activity that shows
predictably better results
in a quicker and more
efficient manner than the
alternatives.
ABP has researched over
27,000 alliance
relationships and
currently maintains a
database of over 180,000
entries. It is from
observations of this
database that we draw
our best practice
conclusions.
7. Why isn’t everyone using it?
Common sense is not always common practice
Knowing that you should do something and having the courage to do
it is not the same thing. (See for example Strategy and the Fat
Smoker by David H Maister).
Many organisations labour under the misapprehension that designing
and developing proprietary approaches is the only way to secure a
competitive advantage.
In fact simply knowing that best practices exist is no guarantee to
success. The skill is in knowing which best practices can be
implemented at which time by the organisation: 1) Unconscious
Incopetence, 2) Conscious Incompetence 3) Conscious Competence
4) Unconscious Competence
Page 7
8. QUESTION ONE
WHAT ARE THE ADVANTAGES
OF AN ALLIANCE SALE OVER
A DIRECT SALE?
Page 8
9. Research by Steve Steinhilber of Cisco
Systems Circa 2006
New Business
5000000
4500000
4000000
3500000
3000000
2500000
2000000
1500000
1000000
500000
0
Direct Sales
Page 9
Alliance Sales
10. An alliance sales example (IBM)
Following a best practice approach has delivered year on year increases in all
revenue types:
Partner Resell and Influence
Client TCV
Sell To
180
All figures in € millions
160
Commercial value has increased steadily year on year
140
120
100
80
60
40
20
0
2009
Page 10
2010
2011
2012
11. Alliance Sales Journey in Figures
2009
2010
2011
2012
IBM
investment
€200K
€460K
€1.6M
€2.1M
Client
Investment
€250K
€385K
€649K
€300K
Client
Headcount
4
8
13
6
TCV = Total Contract Value
€100
M
Page 11
€344
M
€460 M
500 M?
TCV
12. What evidence is there that best practice =
best results?
All of the following reports concluded that best practices = best results
Practioners
Cisco benchmarking
research 1999 – 2007
Procter and Gamble
internal R&D programme
2002 – 2006
AstraZeneca – Internal
project 2005 – 2010
Eli Lilly alliance
programme re-evaluation
2001 – 2002
GSK Healthcare –
strategic review 2004 2008
This list is a small partial sample for
example purposes only. For a fuller list
of sources please see the Appendices
Section.
Page 12
Consultants
Anderson Consulting
„Best Practices in
Strategic Alliances‟ 1989
Boston Consulting Group
Pharma Benchmarking
report 2010.
Academics
University of the United
Nations – Bi Annual State
of Alliances Review 2002
2004 2006 2008 2010.
IBM Healthcare industry
annual review 2001 2011.
Harvard University
(Rosabeth Moss Kanter)
Review of 37 global
alliance programmes
2002 – 2006
Booz Allen and Hamilton
review of 3,500 global
partnering organisations
2002 – 2006.
University of Southern
California annual review
of 12,000 alliances in
Silicon Valley.
McKinsey annual alliance
review 1995 – 2005.
University of Eindhoven
Innovation centre annual
review.
14. Category
Vision
Skills
Trust
Purpose
To create a Vision and a
strategy for the relationship.
To develop the skills and knowledge
needed by both / all partners for
success.
To grow the relationship effectively over
time.
Objectives
To agree the type of
partnership to be pursued.
To agree the scope of the
partnership.
To identify relevant key
stakeholders from both /
all partners.
To agree current
relationship value
(baseline).
To develop appropriate
Business Value
Propositions (BVPs).
To document the vision
and strategy for the
partnership.
• To agree and document a joint go
to market (GTM) plan.
• To improve both / all teams
collaboration skills.
• To develop a simple and robust
governance model.
• To develop an internal and
external communication
programme.
• To achieve a high degree of
internal and B2B alignment.
• To train all partners appropriately
on the chosen products and
services of the BVPs.
• To increase the degree of
organisational trust between all parties.
• To deliver BVPs to time and quality.
• To increase the number and type of
BVPs sold.
• To secure investment funding and
executive support for the partnership
from both / all partners.
• To identify and eradicate cultural
barriers to progress (both personal and
organisational).
• To monitor and manage progress to
key performance indicators (KPIs).
Critical
Success
Factors (CSFs)
Common Vision
Joint Business Plan
Alliance Process
MOUP
Collaboration Skills
Communication
Internal alignment
B2B Operational alignment
Outputs
MOUP document
Initial relationship value
statement/s.
Go / No go decision for
the relationship.
Partnering readiness
assessment (Optional).
Joint go to market (GTM) plan.
Governance model.
Communication programme.
Training plan.
Skills gap analysis report.
Relationship development plan.
Alliance balanced scorecard.
Relationship change management
plan.
Annual relationship strategy reviews
(recurring).
BVP innovation process.
Trust
(B2B) Cultural alignment
Senior Executive Support
Operational Metrics
15. Category
Vision
Skills
Trust
Conduct alliance readiness
assessment (Optional)
Conduct TECP workshop
to agree the type of
partnership to be pursued
Run go to market (GTM)
workshop
Assess both teams
collaboration skills
Develop skills improvement
plans
Develop scalable governance
model
Develop internal and external
communication programme
Develop internal and B2B
alignment action plans
Train all partners
appropriately on the chosen
products and services of the
BVPs
How to run „Alliance to Win‟
workshops
ABP alliance skills
assessment tool
Various example governance
models
Internal and external
communication plan
templates
Internal and B2B alignment
discussion papers and
training modules
Example echnical skills
training programmes
Tasks
Tools to Support
Tasks
Conduct an MOUP
workshop to agree: vision,
strategy scope and key
stakeholders
Agree current relationship
value (baseline)
Develop / agree Business
Value Propositions (BVPs)
Sign off MOUP
ABP alliance capability
assessment tool
Partner selection criteria
white paper
How to run an MOUP white
paper
How to calculate
relationship value white
paper
How to run BVP
workshops presentation
Various example MOUP
sign off documents
Develop an alliance balanced
scorecard and monitor results
quarterly.
Develop a joint relationship
development plan
Track BVP progress and amend as
necessary
Develop new BVP development
process
Agree joint funding / resourcing
budget for the relationship
Address cultural barriers through
partnering attributes model
Monitor progress and report KPIs
How to develop alliance balanced
scorecards (white paper and slide
deck)
Joint relationship development plan
templates (various)
BVP tracking system
Resourcing and funding plan
templates
Partnering attributes model and
assessment tools
Identity compass (slide deck)
16. How do you build an alliance sales
programme?
Executing a best practice alliance sales programme is a five step process:
Step 1 - Baseline
• Deliverables include best practice
education/guidance, programme
charter, programme design, and a
customized alliance framework
• Provides goal alignment, implementable
vision, and a more robust alliance
valuation methodology.
Step 1
Step 2
Step 3 – Implementation
• Deliverables include additional alliance
launches, performance metrics, an
improved processes for inter-business
decision-making, and a recommendation
for a relationship management system
• Makes alliances an integral part of the
organisation‟s enterprise thinking.
Step 3
Step 2 – Strategy and Design
• Deliverables include finalized vision,
portfolio plan, detailed roadmap, partner
matrix, and tactical improvement
opportunities
• Provides a pragmatic realization path with
clear benefits defined
Page 16
Step 4
Step 5 – Review
• Tracking the
programme
effectiveness to pre
established success
criteria.
• Taking remedial action
as necessary
Step 5
Step 4 – Scale Capability
• Deliverables include skills matrix, tools,
legal frameworks, internal certification
programme and, web site
• Spreads alliance capabilities throughout
company; disseminates best practices;
embeds training for certification and
alliance thinking in business systems
17. Alliance Excellence Model
Establishing partnering as an organisational competence requires a framework
Alliance Capability
Alliance Performance
People
Procedures
Leadership
Commercial
Technical
Programme
Alliance
Processes
Strategic
Products
Cultural
Platform
Key
Performance
Business
Results
Operational
Internal Benchmarking on an Ongoing Basis : Continuous Improvement Cycle
Alliance Maturity Model (AMMTM)
Alliance Best Practice Index
(ABPITM)
External Benchmarking Alliance Best Practice Database (ABPDTM)
KEY MESSAGES:
Investment in training alone will not deliver alliance competence (AC)
Trained personnel need ongoing support when they return to their jobs
Building capability is essential to delivering key business results
Alliance Competence = Competitive business advantage
Page 17
18. FINAL QUESTION
WHAT IS YOUR CURRENT
COST OF:
A) A DIRECT SALE?
B) AN ALLIANCE SALE?
Page 18
19. Typical partner segmentation pyramid
Typical IT Language
1
1 = Alliances (GSIs)
Tier 1 = Partnership
2 = Technology Partners
2
3 = Value Added
Resellers (VARS)
3
4 = Distributors /
Resellers
4
Page 19
Alliance Best Practice Language
Tier 2 = Collaborative
Tier 3 = Enhanced
Tier 4 = Transactional
20. Alliance cost of sales model
Percentage Cost of Sales
16.00%
14.00%
12.00%
10.00%
Marketing
Sales
Execution
8.00%
6.00%
4.00%
2.00%
al
Tr
an
sa
c
ti
on
ce
d
an
En
h
ol
la
bo
r
C
P
ar
t
ne
r
sh
ip
at
iv
e
0.00%
Partner Segment
Page 20
21. Further Details
For further details please contact;
Mike Nevin
Managing Partner
Alliance Best Practice Ltd
Web: www.alliancebestpractice.com
Office: +44 (0)1675 442490
Mobile: +44 (0)7766 752350
E Mail: mike.nevin@alliancebestpractice.com
23. Support for the Alliance Best Practice
Approach
There is considerable evidence supporting a best practice approach:
Research
Community
Practitioners
There are currently 523
documents in the ABP
Framework which support
the concept of best
practices in alliances.
There are currently 1,777
active members of the
Alliance Best Practice
community.
The Alliance Best Practice
approach has been taught
to over 1,000 active
alliance executives during
the last 10 years.
The oldest entry comes
from 1989 the newest is
from June 2011.
The community is split
into both a general group
and a thought leaders
group.
The research comprises:
books, white
papers, articles, research
assignments, presentatio
ns and investigations.
There are 53 global Chief
Alliance Officers and
renowned alliance
authors in the thought
leadership group.
Page 23
Companies who have
adopted the approach
(amonst others) include:
IBM, Microsoft,
AstraZeneca, BASF,
Bristol Myers Squibb,
Pfizer, SAP, Rolls Royce,
Starbucks, Oracle, and
Bayer Schering Pharma.
24. What is Alliance Best Practice (ABP)?
ABP is a research consultancy specialising in B2B strategic alliances
Alliance Best Practice
Alliance best practices are the
identified practices that research has
shown lead to optimal alliance results
ABP is a group of over 20
internatioanal alliance experts able to
cover the world and work in multiple
languages
ABP is dedicated to: discovering,
developing and disseminating best
practices for its clients
It does this through the ABP
Database (ABPDBTM)
Page 24
25. Alliance Best Practices Exist
ABP has investigated over 27,000 alliances to identify best practices
Research
Recognised in General
Management theory goes hand in hand with
quality and
benchmarking.
ABP has examined
27,000 international
collaborative relationships
from both domestic and
international sources.
We found factors which
appeared consistently in
successful strategic
alliances – common
success factors (CSFs).
Page 25
Validation
Implications
Common Success
Factors (CSFs) - „Those
practices, principles,
procedures, behaviours or
factors which appear in
successful strategic
alliances in a statistically
relevant manner‟.
ABP has since used the
resulting framework with
over 600 in depth
benchmarking
examinations of strategic
alliances in action.
ABP then validated the
concepts with over 500
practicing alliance
managers from ASAP –
The Association of
Strategic Alliance
Professionals.
The ABP database
currently holds over
180,000 observations of
these CSFs in practice.
The results show that
doing the right things
(best practices) produced
the right results (more
value / revenue).
26. Partner ‘Intimacy’ Spectrum
Both partners need to define the topology of the
progression and the ‘value of the journey’
Low
Intimacy
High
Intimacy
Low
Value
High
Value
0 = None
25 = Low
50 = Median
Commodity Price
Some customization
Interchangeable
Product
Flexibility/levels of
service
Highly specified
deliverables
Special knowledge
Buy from and sell
to
Buy from, sell to and
sell with (GTM
together)
75 = High
100 = Perfection
Customized/
individualized
Shared risks &
investment
Process & data
integration
Deeply integrated
Solutions oriented
Shared rewards
Greater cost value
leverage
Mutually
interdependent
Breakthrough
market value
27. Common Success Factors : Best Practices
There are currently 52 CSFs in 5 categories
Commercial
Co1 Business Value
Proposition (BVP)
Technical
Strategic
T11 Valuation of assets
S20 Shared objectives
Co2 Due Diligence
T12 Partner company
market position
S21 Relationship
Scope
Co3 Optimum Legal /
Business Structure
T13 Host company
market position
S22 Tactical and
strategic risk
Co4 Alliance Audit
T14 Market fit of
proposed solution
S23 Risk sharing
Co5 Key metrics
Co6 Alliance reward
system
Co7 Commercial cost
Co8 Commercial
benefit
Co9 Process for
negotiation
Co10 Expected Cost
value ratio
T15 Product fit with
partners offerings
T16 Identified mutual
needs in the
relationship
T17 Process for team
problem solving
T18 Shared Control
T19 Partner
accountability
S24 Exit strategies
S25 Senior executive
support
S26 B2B Strategic
alignment
S27 Fit with strategic
business path
S28 Other relationships
with same partner
Cultural
Operational
Cu31 Business to
business trust
O39 Alliance process
Cu32 Collaborative
corporate mindset
Cu33 Collaboration
skills
O40 Speed of progress
O41 Revenue flow
O42 Business plan
O43 Communication
Cu34 Dedicated
alliance manager
O44 Health check
Cu35 Alliance centre of
excellence
O46 Change mgt.
Cu36 Decision making
process
Cu37 Other cultural
issues
Cu38 B2B Cultural
Alignment
O45 Alliance charter
O47 Operational
metrics
O48 Operational
alignment
O49 Exponential
breakthroughs
O50 Internal alignment
S30 Common vision
Page 27
S29 Common strategic
ground rules
O52 Issue escalation
O51 Project plan
28. Alliance Capability Model (ACMTM)
The goal is to establish partnering as an organisational competence
Alliance Capability
Alliance Performance
People
Governance
Leadership
Commercial
Technical
Resources
Processes
Strategic
Structure
Cultural
Technology
Key Performance
Results
Operational
Internal Benchmarking on an Ongoing Basis : Continuous Improvement Cycle
Alliance Maturity Model (AMMTM)
Alliance Best Practice Index
External Benchmarking Alliance Best Practice Database (ABPDTM)
KEY MESSAGES:
Investment in training alone will not deliver alliance competence (AC)
Alliance managers need ongoing support to produce best results
Building capability is essential to delivering results
AC = Competitive business advantage
29. Partnering Competence
The ability to apply the CSFs in an efficient and effective manner
Alliance Knowledge
People / Skills / Behaviours
The combination of CSFs
into suitable individual
proceses
Four stages of knowledge
growth:
The combination of
processes into partnering
practices
Built around alliance
portfolio management:
Add
Adjust
Optimise
Retire
Page 29
Organisational Structure
Built around:
Strategic
Unconcious
incompetence
Managerial
Conscious
incompetence
In a matrix with:
Operational
Conscious
competence
Alliance
Unconscious
competence
Marketing
Sales
Technology
Local Involvement
30. Alliance Maturity
There are three observable stages in organisational alliance maturity
Stage 1 - Opportunistic
Alliances are
opportunistic
Each alliance is a „stand
alone‟ venture
Alliances are not part of
the company‟s “Standard
Operating Procedure”
Typically alliances are
used to secure tactical
„deals‟ or exploit individual
market opportunities
Page 30
Stage 2 - Systematic
Separate corporate efforts
in different areas of
business
Stage 3 - Endemic
Planned investment in
partnering capability
Strategic partners
developed
Wide scale use of full
range of alliance: training,
tools and priocesses
Effort begun to adopt
“best practices” in alliance
management
Close integration of:
sales, marketing,
technology, innovation etc
„Islands‟ of ownership of
alliances formed
31. The Alliance Maturity Model AMMTM
Company 2
80
70
60
Company 1
50
40
Stage I
Stage II
Stage III
30
20
• Alliances are opportunistic
• Each alliance is a „stand alone‟
venture
• Alliances are not part of the
company‟s “Standard Operating
Procedure”
• Separate corporate efforts in different areas of business
• Strategic partners developed
• Effort begun to adopt “best practices” in alliance
management
• Planned investment in partnering
capability
• Wide scale use of full range of
alliance capability building
• Close integration of sales,
marketing, innovation etc
10
C
3
C
31
C
11
W
C
C
1
C
30
C
17
C
8
B
IC
C
16
C
18
C
2
C
22
C
4
C
27
C
26
C
12
C
33
C
15
C
13
C
19
C
20
C
25
C
14
C
24
C
23
C
32
C
28
C
9
C
29
C
5
C
34
C
7
C
10
C
6
C
21
0
32. Alliance Best Practice Framework
The ABPDBTM with 180,000+ entries lies at the heart of the Framework
„Tools‟ refer to any
documents that help users
apply the Framework
knowledge.
Bench
Marks
MOUP
There are 52 Critical
Success Factors (CSFs)
identified from
examining over 27,000
international strategic
alliances.
ABPDTM
The Alliance Maturity Model
TM establishes: current
situation, (benchmark)
current and future
challenges, the nature of
the journey‟ and success
strategies for cost effective
progress.
Page 32
Diagnostics
Relationship
Optimisation
By combining the
principles established in
the CSFs a range of
Best Practices (BPs)
have been developed
33. Relationships Benchmarked
ABP has worked with over 300 of the worlds best partnering organisations
Organisations in the ABPDBTM
15 25
25
72
27
48
Pre Formation
Growth
Extension
Page 33
Formation
Maturity
Decline / Renewal
Accenture (Asia Pac), Accenture (EMEA), Accenture (USA), Aenis, Air
France, AirPlus, Alcatel (UK), Alcatel Lucent, Amec, AMP Capital, ANA Airlines, Apple
Computer, Ariba, Arriva, Associated Business Leaders LLC, AstraZeneca, AT+T, Atos
Origin, Avaya, Avis, AXA, Bank of America, BASF, Basilica Consulting, Battelle, Bax
Global, Bayer Schering Pharma, BBC Corporation, BCX, BDO Unicon, Bearing
Point, Bell Canada, BMI Airlines, BNP Paribas, Boeringer Ingelheim, Borland, BP Oil
and Gas, Bristol-Myers Squibb, the British Library, BT, BT Global Services, BT
Wholesale, Buckland Austin, Business Objects, Capgemini, Cardinal Health, Carlson
Wagonlit, Caterpillar, CGI, Chordiant, CiberNovesoft, Cisco, Cognos, Computacenter, Continental
Airlines, CSC, Csiper, Delaware, Dell, Deloitte, Delta Airlines, Deutsche Bank, Disney
Corporation, Dupont Industries, EBRC, Eli Lilly, EMC, Epiphany, Ericsson, Everis, Exact
Software, Excel Logistics, Experian, Exponent, Fontline, Fontworkx, Fujitsu
Communications, Fujitsu Consulting, Fujitsu Services, Fujitsu Siemens, GE Capital
Finance, Genesys, Genset, GlaxoSmithKline, GSK (Healthcare), GSK (Pharma), Hitachi
Consulting, HP (UK), HP (USA), i2 Technologies, IBM (Asia Pac), IBM (India), IBM
(UK), IBM (USA), IBM Global Services (NE IOT), IBM Global Services (USA), IBS, IDS
Sheer, Imbercal, Imperial Tobacco, Infor, Intel, Intentia, ITS, Japan Corporate
Bank, Kalamazoo, Kana, Keane, KLM Airlines, KLM Cargo, KPMG, Kuehne &
Nagle, Lawson, Lenovo, Logica, LTSB, Lufthansa, Marks and
Spencer, McAfee, Merck, Micro Focus, Microsoft (CS), Microsoft
(EPG), Mitie, Motorola, MSG, NEC
Computers, nFocus, Nokia, Nordea, Nortel, Northwest Airlines, Norwich Union Life, O2
Telefonica, Omax Auto, Omega
Signs, Oracle, Peregrine, Pfizer, PLM, RBS, RCC, Reckitt Benckiser, Rider Levitt
Bucknall, Rifcon, Roiter Zucker, Rolls Royce, SAP (EMEA), SAP (Global), SAP
(UK), SAS Institute, Satyam, Scottish Widows, Serco, Siebel, Siemens AG, Siemens
Business Services, Siemens Enterprise Networks, Siemens Comms, Siemens
GmbH, Singapore Airlines, Skyteam, Sprint, SSA, Staffware, Star
Alliance, Starbucks, StorageTek, T Mobile, Tata Communications, Tata Consulting
Services (TCS), TDG Logistics, Telmex (mexico), Telus (Canada), TNT
Express, Tubelines, UBS, uLogistics, Unipart Logistics, Unisys, United
Airlines, Verizon, Vodafone, Wipro, Withy King, Xerox, Xerox Services, Zurich Financial
Services
34. Benchmarks by sector
High Tech and Pharma companies comprise the majority of entries:
ABPDTM By Sector
15
17
28
21
The largest sector is High Tech
All business sectors are now
beginning to use alliances
Most common use is:
19
112
Developing New Business
(Growth)
Developing New Products and
Services (Innovation)
Airlines / Finance
Pharma
Services / Media
Page 34
IT
Manufacturing
Other
Developing Quality or Cost
Control (Recession)
35. External research improves knowledge
To improve organisations must be aware of what „best practice‟ looks like:
Unconscious
Incompetence
Organisations don‟t know what they don‟t know!
No understanding of Best Practices or current performance
Value loss high
Conscious
Incompetence
Developing understanding that Best Practices exist, but no systems to
take advantage of them. Difficulties in generating the business case.
Can use the Framework to massively reduce cost of alliances
Conscious
Competence
Knowledge of Best Practices but need training and experience to apply
them successfully.cost effectively generate breakthrough levels of
incremental revenue.
Unconscious
Competence
Collaboration is a core competence now organisations can use
partnering as a key business strategy.
Target = Partner of Choice (POC) in chosen sectors.
Page 35
36. Better knowledge = competitive advantage
The impact of lack of „best practice‟ knowledge:
Unconscious
Incompetence
Organisations don‟t know what they don‟t know!
No understanding of BP or current performance
Value loss high
Conscious
Incompetence
Developing understanding that BP exist, but no systems to take
advantage of them. Difficulties in generating The business case.
Can use the Framework to massively reduce cost of alliances
Conscious
Competence
Knowledge of BP but need training and experience to apply them
successfully.cost effectively generate breakthrough levels of
incremental revenue.
Unconscious
Competence
Collaboration is a core competence now organisations can use
partnering as a key business strategy.
Target = Partner of Choice (POC) in chosen sectors.
Page 36
37. Commercial Implications of Best Practice II
Best Practice (BP) consistently out performs Non Best Practice (NBP)
Best Practice (BP)
Non Best Practice (NBP)
65
70
60
50
Same Company
Same VP
Different Approach
61
49
48
39
40
34
29
30
23
Widening Delta as
times get tough
25
21
19
20
59
19
2009
2010
15
10
0
2004
Page 37
2005
2006
2007
2008
38. Setting alliance manager standards
A professional well educated alliance executive is the „point of the sword‟
Alliance manager
standards are now
beginning to be
introduced
Organisations are paying
more attention to alliance
management training
Page 38
ABP chaired the
certification standards
committee for ASAP (the
Association of Strategic
Alliance Professionals)
and researched and built
the competency
framework on which the
certification is based.
In addition ABP has
worked with
IBM, Starbucks, Eli
Lilly, and Rolls Royce to
set suitable alliance
manager standards to
support training needs
analysis and appraisal
review systems.
39. Individual relationship benchmark example
Co1
Generally consistent scoring
O49
O48
O47
O46
Client scored lower (usually)
than the Partner
O50
100
O51 O52
- Co1 Defined business value
proposition
- T2 - Partner company market
position
- T3 - Host company market position
- S7 – B2B Strategic Alignment
- Cu8 – B2b Cultural Alignment
- O2 – Speed of progress so far
- O12 – Internal Alignment
Co4
90
Co5
Co6
Co7
Co8
80
70
60
O45
Differences were perceived in
the following areas;
Co2 Co3
Co9
50
O44
Co10
40
O43
T11
30
O42
T12
20
O41
10
T13
O40
0
T14
O39
T15
Cu38
T16
Cu37
T17
Cu36
T18
Cu35
Cu34
Cu33
Cu32
Cu31
T19
S20
S21
S22
S30
S29 S28
S26 S25
S27
S24
S23
40. ABP Relationship Optimisation Process
Having a consistent way to optimise relationships improves results:
Identifier
Stage 1
Stage 2
Stage 3
Stage 4
Stage 5
Description
Goal Setting and Scoping
Diagnostic
Action Planning
Resource Mapping
90 Day Review
Objective
To identify the currently
projected commercial value of
the relationship for the next 12
months.
To generate an objective view
of the relationship which shows
52 strengths and weaknesses
identified as a score from 0-100
Objective – To generate a
jointly agreed (with the partner)
action plan to optimise the
relationship.
To map all identified
actions to a RACI[1]
framework to identify key
stakeholders roles and
responsibilities.
To track the progress of
the joint action plan to
target/s and take remedial
action as required.
Activities
• Contact all key stakeholders
and draw up strawman
value projection
• Resolve conflicts and
discrepancies with
stakeholders
• Document draft final value
projection
• Obtain sign off of value
projection from senior
executive sponsor
• Agree on key stakeholders to
provide data
• Gather data and send results
to ABP
• ABP benchmarks the data
and produces draft alliance
efficiency report (AER)
• Discuss AER with partner
(and / or ABP) and decide
whether to progress to stage
3
• Construct agreed agenda
from draft report
• Analyse areas of
misalignment (i.e. CSFs
which show different scores
from one partner to the other)
• Agree common scores for all
52 areas (with the partner)
• Identify areas for action
• Identify short term and long
term actions
• Identify help required with
long term actions
• Produce agreed action plan
• Conduct RACI chart
mapping for all identified
improvement actions
• Communicate and agree
role of all stakeholders
on the RACI chart
• Revise the RACI chart as
necessary
• Agree a single
stakeholder from both /all
organisations in each
category
• Sign off RACI chart with
host and partner
executives
• Conduct healthcheck
assessment prior to
review meeting
• Construct agenda and
pre meeting progress
report
• Conduct meeting
focusing on
underperforming areas
• Agree revised action plan
with remedial actions
• Publish revised action
plan
Inputs
• Relationship business plans
• Alliance strategy document
• Briefing Pack from ABP
• Online diagnostic
• Briefing Pack from ABP
• ABP coaching as required
• Draft AER
• Suggested workshop agenda
• Agreed workshop attendee
list
• Agreed Action Plan
• RACI resource mapping
tool
• Jointly greed action plan
• Jointly agreed
stakeholder map
• MOUP
• Agenda
Outputs
• Agreed Scope
• Agreed initial commercial
valuation
• Draft alliance efficiency report
(AER) from ABP
• Benchmarking report
• Decision to proceed
• Jointly agreed action plan
• Stakeholder map of
agreed actions
• Revised Action Plan
41. The ROI of the Ally Model
The „Ally‟ model outperforms the „Build‟ or „Buy‟ models:
The commercial return of the „ally‟
model is typically five times higher than
the other two models*.
Organisations are increasingly turning
to the third generation business growth
model of „ally‟ because it represents a
more flexible and cost effective growth
model. In addition it is easier to
achieve in a recession.
*Source Booz Allen and Hamilton Research 1996 2002
42. The two forces driving systematisation
Systematisation is being driven by internal and external; factors
Internal
External
Page 42
Sarbanes Oxley, Basel II & III, Enron, credit
crunch, etc.
External audits of processes
CFOs identifying value in the balance sheet
It costs less to be working to a system
CEOs tired of the hype „show me the money‟
Regular interaction drives value
Need to reuse knowledge gained
Individual / corporate responsibility
Systematisation allows consistent comparison
43. Commercial return of systematisation
Best practice practitioners on average earn more from their alliances:
Efficiency
- (e.g. internal knowledge
transfer, having a defined
process, having a clear business
value proposition, constructing good
alignment with partners, etc.).
Effectiveness
- (e.g. Assessing potential partners
more quickly, refusing to be drawn
into the opportunistic deal chasing
merry go round but rather setting and
keeping to a defined strategy, etc.)
- *Source Alliance Best Practice database 2001 2011
44. Alliance myths
Some commonly held views are negated by the evidence in the database:
Alliance Best Practice
Alliances are about people pure and
simple
There can be no „one‟ single best practice
all alliances are unique
Collaboration is an unnatural act
Alliances are not „sexy‟ business models
If the money is good enough then people
will pretend to get along
No organisation is going to willingly
commit to a limited number of partners
There are too many variables in any
collaborative relationship to allow
meaningful analysis
Page 44
45. Alliance Challenges
Significant alliance challenges remain
Internal Challenges
Building bricks with no straw
External Challenges
Confusing terminology
Embedding collaborative thinking in
an organisation
Identifying Key Stakeholders
Collaborative negotiation
Lack of control
Developing a business case for an
alliance department / function
Appointing the wrong person to the
alliance role
Technical excellence is not
partnering excellence
Short term thinking
Managing multiple alliances
Page 45
Distributed governance
Identifying alliance value
Positioning alliances in
organisational structures
Overcoming organisational
resistance / inertia
46. The developing future for alliances
Collaborative business to business relationships are here to stay
Internal Challenges
External Challenges
More revenue coming from indirect
means
Development of PRM systems
More audit pressures on
organisations to have auditable
alliance processes
Training emerging as a capability
enhancing tool of choice
Greater focus on systematisation
Alliance manager certification and
qualification
More structure in alliance job
descriptions, behaviours and
assessment centres
Greater and more balanced
measurement of alliances
Alliance virtual teams and „ad hoc‟
knowledge exchange taking place
Greater focus on the ROI of alliances
New models and business cases
being built (e.g. cost of sales v cost
of alliances)
Accelerating Hi Tech alliances with
Pharma companies
Page 46
47. Further Details
For further details please contact;
Mike Nevin
Managing Partner
Alliance Best Practice Ltd
Web: www.alliancebestpractice.com
Office: +44 (0)1675 442490
Mobile: +44 (0)7766 752350
E Mail: mike.nevin@alliancebestpractice.com
Notas do Editor
Core GAP teamNina ChristiansenKaren GatehouseLenka PyszkovaMichael WittwerKarla KabrtovaAnders Ericsson (SW)Robert KaupAnnette IbsenAnders Essner (SW)David RobertsKari BostadExtended teamAnni Reimers – marketingJarkko Kosonen - FI