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- What is an alliance (and how do you measure what is it worth)?
- How do you make it work?
So what is an alliance?
Generally it is any collaboration which is not goverened by commercial terms. An example given was harbours and ro-ro ferries. Neither works without the other, but neither the ferry company nor the harbour authority pay the other to enable the collaboration. For some people it was a necessary evil: OEM partners that destroy your brand but either enable your solution or are a revenue stream that is better going to you than your competitors.
Our own research shows that there is a grey area, for instance in ISV alliances, where there is a commerical incentive for bundling or re-selling a partner's application with your own, but a non-commercial alliance, based on a technical collaboration that pulls through thier own application, is preferred by partners. By contrast, some hardware vendors will sell 'desk-top real-estate' to bundled vendors, but again, this is not what the group mostly though of as an alliance.
Measuring the value is not an exact science. To many, the benefit is getting in earlier into the descision-making cycle in order to avoid commoditisation. For others it is a reduced cost of sale through repeatable engagements. Usually this benefit has been pre-calculated as a reason for the alliance so, to realise it, sales teams can be actively incentivised for working with an alliance partner on an opportunity.
The challenges in making an alliance work often need executive sponsorship to over-come. For instance, if the alliance partner does not incentivise their sales team to bring you in, there will be 'propogation challenges'. Formal agreements restrict collaboration more than they enable it. Best practice is to have a looser 'quid pro quo' document that is revised every couple of years.
Alliance managers have a Janus role: facing both organisations and evangelising each to the other. They tend to have to work through 'virtual' teams, so need to be able to sell the benefits of the alliance internally as well as externally. Good ones are appreciated by alliance partners for their knowledge of the partner's own organisation, especially if they can share back organisation charts and contact lists. Their counter-parts can usually introduce them to a few key individuals, but it's up to the alliance manager to work down to the customer-facing teams.
A frequent issue is mis-alligned budget planning cycles. They can therefore struggle to raise the right joint marketing budgets. Both internal 'push' and external 'pull' campaigns are required. Some organisations will go as far as setting up stalls in the partners' offices to promote the alliance. Another useful excercise is to survey the alliance parter's customer-facing and technical support teams every six months to measure mind-share and attitude in order to guage the effectiveness of 'push' campaigns.
Alliance managers may get personally invloved in larger engagements, but often work through the relevant partner organisation. Conflicts usually only arise with the smaller partner in an un-balanced alliance, as they have more to fear if they are pushed out of a deal. The larger ones realise there is 'enough to go round' for everyone.
In surveys, the biggest issues are around conflict resolution and joint planning. This is where a looser alliance allows the flexibility to resolve these before they become and issue.
Other useful resources people identified included
So let us know if this was interesting, whether you agreed and/or what your experience has been.
More soon
