Alliance Lifecycle Framework
- 1. Alliance Lifecycle FrameworkDoug Adams416-303-3708jdouglasadams@bell.net
- 2. SummaryAlliances have emerged as one of the key business strategies of the new economy. Clients are facing increasing market pressures and in turn are demanding more and faster responses from companies like XXX. Alliances can be a key component of a companies growth objectives. They have the potential to greatly reduce the time required in developing new products/services or enable access to fast growing emerging markets. This in turn can open the door to new client opportunities or channels to market. In some cases this can be a competitive advantage in acquiring new businessThis document includes a sample alliance lifecycle framework and is intended as a tool to foster conversation and provide context on some of the questions to consider as you assess the importance and structure of a formal alliance framework.
- 3. Alliances Lifecycle Framework Develop Alliance StrategyIdentifyAlliance Partner(s)Due Diligence and Fit AssessmentNegotiate & Finalize Contract TermsCreate Alliance & Marketing PlansPursue Client OpportunitiesContinuous Development & improvementBusiness Case and Executive Sponsorship Alliance ManagementGovernance Model
- 4. Develop Alliance StrategyIt is important to create a blueprint for your desired business outcomes. Alliances constantly need to be evaluated and managed to maintain relevance and ensure they support your business goals and objectives. Identify and prioritize needs and/or gaps in current capabilities
- 5. Establish a consistent framework and basis for evaluating current and future alliances
- 6. Identify and prioritize actions with key stakeholders
- 7. Create a classification of the types of relationships to better prioritize resources and financial requirements
- 8. SAP and Oracle are strategic alliances and core to your business.
- 9. Other Alliance relationships may be more transactional and tactical in nature.Identify Alliance PartnerIt is important to select your alliance partners based on the objectives of the alliance strategy rather than on an ad hoc basis. If they are not linked to and supported by the strategy and business needs there will be less of a chance the alliance will be successful or meet your business requirements.Develop and create alliance partner profile
- 10. Assess alliance partner strengths and growth potential
- 11. Are they a market leader and how do they compare to competitors
- 12. Compare solutions and products
- 13. Narrow the list of preferred alliance partners
- 14. Select and target alliance partnerDue Diligence and Fit AssessmentIt is important to assess and confirm the alliance partner is the right fit for your organizational culture, ability to meet your strategic goals and integration into differentiated and competitive solutions to your clients. Prior to starting this activity consider signing a non-compete or non-disclosure agreement
- 15. Screen opportunities against strategy
- 16. Does the alliance partner solution map and integrate with your solution
- 17. Relevance of the alliance offering across industries, geographies, etc.
- 18. How well has the product been defined and degree of customization required
- 19. Compatibility in terms of target client commonality and personality
- 20. Financial stability of the alliance partner
- 21. Maturity of the solution space lifecycle
- 22. Potential threats and overlaps (ie., shared business outcomes, competing solutions)Negotiate and Finalize Contract TermsConsider creating alliance contract templates as part of the early developing alliance strategy process. For me past experience has demonstrated the importance of having the alliance partner agree to use your template contract as a starting point. Develop definitive legal agreements with legal team
- 23. Obtain input from key internal stakeholders and subject matter experts
- 24. Identify an experienced lead negotiator
- 25. Prepare negotiation strategies (Consider starting to prepare for the negotiation phase as you first engage the alliance partner. As appropriate start setting expectations from the beginning.)
- 27. Sign agreements Create Alliance and Marketing PlansDevelopment of the alliance plan to clarify the guiding principles, objectives, roles and responsibilities of each party. Should address and potentially be structured around what, where, when, why and how each previously identified alliance capability will be executed. Should also include how process will be measured and evaluated. Plan should focus on the overall objectives of the alliance
- 28. Gain agreement of alliance partner and your own management
- 29. Plan needs to be jointly developed win-win
- 30. Identify ongoing support team
- 31. Execute quickly as there will be pressures on the alliance to exceed in the short term
- 32. Other sections may include Business Development Plan, Joint Delivery Plan, Solution Development Plan and Relationship/Initiative ManagementPursue Client OpportunitiesClient opportunities should be pursued as soon as the Alliance Plan has been drafted, if not concurrently. It is wise to identify target clients as soon as possible and stage the alliance expenditures based on realized income streams. Business development guidelines should be understood between the parties prior to pursuing clients (eg., rules of engagement, delivery responsibilities, etc.) Confirm target market(s) with alliance partner
- 33. Review business development plan – guidelines, rules and responsibilities
- 34. Jointly develop targeted client list
- 35. Develop a sales pipeline report
- 36. Jointly pursue target clients (eg., facilitate client introductions, manage sales pipeline, etc.)Continuous Development and ImprovementFocus on continuously developing and improving alliance sponsorship, funding, resourcing and interest across industry, service and solution verticals. Consolidate financial, operational and behavioural information to produce balanced scorecard and management reporting that enables leadership to make decisions on the success and direction of the alliance. Scorecard progress in order to gain a high-level picture of the alliance performance against plan
- 37. Annual FY planning and budgeting – formal process to assess and validate alliance objectives across industry, service and solution verticals
- 38. Gather internal views by conducting stakeholder reviews
- 39. Gather external views through independent alliance surveys
- 40. Further ad hoc assessments using key criteria under the following capabilities:
- 42. Sales and marketing
- 43. Industry, service and solution
- 44. Alliance channel revenue (if appropriate)Business Case and Executive SponsorshipNo alliance can secure investment or commitment without a strong business case. Alliance sponsors play an important role in assuming accountability and fully supporting the alliance. The business case should include:
- 45. Market intelligence – Summary of the opportunity, clear definition of the target market and customers, overview of the current and projected market size and growth rate.
- 46. Vendor Intelligence – Vendor landscape, competition and a compelling reason why this is the best alliance partner
- 47. Benefits and contributions – short and long-term strategic and financial objectives, benefits, associated investments and contributions.
- 48. Marketing strategy – description of how you will publicize, promote, distribute, price and sell the alliance
- 49. Operations plan – how both parties will cooperatively and effectively execute the alliance plan
- 50. Risks and exit strategy – potential market changes, long take-up time possibility, exposure, termination restrictions and penalties.
- 51. Key stakeholders and sponsors must understand and support the need for an alliance strategy for it to be successfully developed and executedAlliance ManagementAlliance management plays a key role in defining, establishing, building and maintaining the relationship with the alliance partner Developing and launching the alliance plan
- 52. Executing and managing the alliance plan
- 53. Establish relationships and linkages with the alliance partner’s marketing and sales organization
- 54. Developing and implementing the alliance infrastructure
- 55. Developing the communication process
- 56. Developing and maintaining executive relationships
- 57. Ensuring all contracts are in place
- 58. Ensuring all parties meet the contractual obligations
- 59. Producing management reports as agreed under the alliance contract
- 60. Working with both teams in the escalation and resolution of implementation issuesGovernance ModelA strong governance model is critical to building an effective working relationship and maximizing the performance of the alliance. Governance provides the playbook for driving and sustaining the value of the allianceStewardship – Set the strategic direction and monitor performance against expectations and contractual obligationsResource Allocation – Ensure you have the appropriate financing and resources assigned to ensure successDecision Process – Decisions and issue resolution are made at the right organizational levels. Having the appropriate people leveraging the proper skills and information improve communication and minimize the impact of problems and misinformationThe Right Governance Model – Governance structures are adaptable to changing business and customer requirements Design model according to the goals of the alliance relationshipAssign clear goals and responsibilitiesOrganize information flowNeed effective and measureable metrics to ensure clear assessment of performance
- 61. Considerations When Structuring An Alliance Link the Alliance to market strategyDefend XXX business interests – don’t let alliance vendor needs drive the alliance.Don’t ignore long-term and global consequencesGet good market intelligenceAlliances are better if market driven, (not single client focus)Prepare a business caseSolicit skill and experience from within your organization constantlyLook at business fit in addition to functional and technical fitAvoid creating an alliance with a pre-conceived structure in mindFind a target client first for co-developmentManage expectations