Alliance Lifecycle Framework

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This alliance lifecycle framework presentation was created 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 lifecycle framework. I created this for a friend working with one of the leading Canadian consulting firms without a current formal strategy, framework or program in place for the development and management of IT channel business partner programs and relationships.

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Alliance Lifecycle Framework

  1. 1. Alliance Lifecycle Framework<br />Doug Adams<br />416-303-3708<br />jdouglasadams@bell.net<br />
  2. 2. Summary<br />Alliances 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 business<br />This 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. <br />
  3. 3. Alliances Lifecycle Framework <br />Develop Alliance Strategy<br />Identify<br />Alliance <br />Partner(s)<br />Due Diligence and Fit Assessment<br />Negotiate & Finalize Contract Terms<br />Create Alliance & Marketing Plans<br />Pursue Client Opportunities<br />Continuous Development & improvement<br />Business Case and Executive Sponsorship <br />Alliance Management<br />Governance Model<br />
  4. 4. Develop Alliance Strategy<br />It 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.<br /><ul><li> Identify and prioritize needs and/or gaps in current capabilities
  5. 5. Establish a consistent framework and basis for evaluating current and future alliances
  6. 6. Identify and prioritize actions with key stakeholders
  7. 7. Create a classification of the types of relationships to better prioritize resources and financial requirements
  8. 8. SAP and Oracle are strategic alliances and core to your business.
  9. 9. Other Alliance relationships may be more transactional and tactical in nature.</li></li></ul><li>Identify Alliance Partner<br />It 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.<br /><ul><li>Develop and create alliance partner profile
  10. 10. Assess alliance partner strengths and growth potential
  11. 11. Are they a market leader and how do they compare to competitors
  12. 12. Compare solutions and products
  13. 13. Narrow the list of preferred alliance partners
  14. 14. Select and target alliance partner</li></li></ul><li>Due Diligence and Fit Assessment<br />It 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. <br /><ul><li>Prior to starting this activity consider signing a non-compete or non-disclosure agreement
  15. 15. Screen opportunities against strategy
  16. 16. Does the alliance partner solution map and integrate with your solution
  17. 17. Relevance of the alliance offering across industries, geographies, etc.
  18. 18. How well has the product been defined and degree of customization required
  19. 19. Compatibility in terms of target client commonality and personality
  20. 20. Financial stability of the alliance partner
  21. 21. Maturity of the solution space lifecycle
  22. 22. Potential threats and overlaps (ie., shared business outcomes, competing solutions)</li></li></ul><li>Negotiate and Finalize Contract Terms<br />Consider 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. <br /><ul><li>Develop definitive legal agreements with legal team
  23. 23. Obtain input from key internal stakeholders and subject matter experts
  24. 24. Identify an experienced lead negotiator
  25. 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.)
  26. 26. Conduct negotiations
  27. 27. Sign agreements </li></li></ul><li>Create Alliance and Marketing Plans<br />Development 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.<br /><ul><li> Plan should focus on the overall objectives of the alliance
  28. 28. Gain agreement of alliance partner and your own management
  29. 29. Plan needs to be jointly developed win-win
  30. 30. Identify ongoing support team
  31. 31. Execute quickly as there will be pressures on the alliance to exceed in the short term
  32. 32. Other sections may include Business Development Plan, Joint Delivery Plan, Solution Development Plan and Relationship/Initiative Management</li></li></ul><li>Pursue Client Opportunities<br />Client 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.)<br /><ul><li> Confirm target market(s) with alliance partner
  33. 33. Review business development plan – guidelines, rules and responsibilities
  34. 34. Jointly develop targeted client list
  35. 35. Develop a sales pipeline report
  36. 36. Jointly pursue target clients (eg., facilitate client introductions, manage sales pipeline, etc.)</li></li></ul><li>Continuous Development and Improvement<br />Focus 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.<br /><ul><li> Scorecard progress in order to gain a high-level picture of the alliance performance against plan
  37. 37. Annual FY planning and budgeting – formal process to assess and validate alliance objectives across industry, service and solution verticals
  38. 38. Gather internal views by conducting stakeholder reviews
  39. 39. Gather external views through independent alliance surveys
  40. 40. Further ad hoc assessments using key criteria under the following capabilities:
  41. 41. Executive relationship
  42. 42. Sales and marketing
  43. 43. Industry, service and solution
  44. 44. Alliance channel revenue (if appropriate)</li></li></ul><li>Business Case and Executive Sponsorship<br />No 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. <br /><ul><li>The business case should include:
  45. 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. 46. Vendor Intelligence – Vendor landscape, competition and a compelling reason why this is the best alliance partner
  47. 47. Benefits and contributions – short and long-term strategic and financial objectives, benefits, associated investments and contributions.
  48. 48. Marketing strategy – description of how you will publicize, promote, distribute, price and sell the alliance
  49. 49. Operations plan – how both parties will cooperatively and effectively execute the alliance plan
  50. 50. Risks and exit strategy – potential market changes, long take-up time possibility, exposure, termination restrictions and penalties.
  51. 51. Key stakeholders and sponsors must understand and support the need for an alliance strategy for it to be successfully developed and executed</li></li></ul><li>Alliance Management<br />Alliance management plays a key role in defining, establishing, building and maintaining the relationship with the alliance partner <br /><ul><li>Developing and launching the alliance plan
  52. 52. Executing and managing the alliance plan
  53. 53. Establish relationships and linkages with the alliance partner’s marketing and sales organization
  54. 54. Developing and implementing the alliance infrastructure
  55. 55. Developing the communication process
  56. 56. Developing and maintaining executive relationships
  57. 57. Ensuring all contracts are in place
  58. 58. Ensuring all parties meet the contractual obligations
  59. 59. Producing management reports as agreed under the alliance contract
  60. 60. Working with both teams in the escalation and resolution of implementation issues</li></li></ul><li>Governance Model<br />A 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 alliance<br />Stewardship – Set the strategic direction and monitor performance against expectations and contractual obligations<br />Resource Allocation – Ensure you have the appropriate financing and resources assigned to ensure success<br />Decision 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 misinformation<br />The Right Governance Model – Governance structures are adaptable to changing business and customer requirements <br />Design model according to the goals of the alliance relationship<br />Assign clear goals and responsibilities<br />Organize information flow<br />Need effective and measureable metrics to ensure clear assessment of performance<br />
  61. 61. Considerations When Structuring An Alliance <br />Link the Alliance to market strategy<br />Defend XXX business interests – don’t let alliance vendor needs drive the alliance.<br />Don’t ignore long-term and global consequences<br />Get good market intelligence<br />Alliances are better if market driven, (not single client focus)<br />Prepare a business case<br />Solicit skill and experience from within your organization constantly<br />Look at business fit in addition to functional and technical fit<br />Avoid creating an alliance with a pre-conceived structure in mind<br />Find a target client first for co-development<br />Manage expectations <br />

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