Measuring Alliances in ICT Systems Integration and Other Industries: How Easy?   16 comments

Update: this post has driven valuable discussion with many colleagues – thank you!
I have captured the main conclusion in a later post on qualitative alliance metrics focused on the quality of relationship.

My company is reviewing how we manage alliances as part of our region’s systems integration business.
This has given me a great opportunity: look hard at alliance metrics again, in the field, with very individual stakeholders looking personally after a business. 

At the same time, two recent ASAP events have discussed alliance metrics.

Both ASAP events describe alliance measurement as difficult, while my experience indicates measuring alliances is actually quite easy.

My experience focuses on a specific industry and business model: Information and Communication Technology (ICT) alliances between global systems integrators, platform partners and their ecosystem.
This focus may well make measuring easier than in broader contexts, still I believe simple guidelines such as those I propose below can make alliance measurement easy anywhere.

Let’s look at the two ASAP events, and their thesis:

Quintile’s webinar focused on managing the execution of an alliance’s joint strategy map:
First, draw a map of the alliance’s strategic objectives.
Then, define metrics based on the objectives, to track progress towards each.
Finally, as a governance committee, define and execute work streams that pursue these objectives, and so advance these metrics.
A steering committee will then manage strategy execution by assessing progress of the work streams through tracking of corresponding metrics.
This webinar focused on the process, deferring to specifics of each partner and alliance to identify strategic objectives and so metrics.

The Benelux round table, according to reports above, also highlighted how complex and specific defining alliance metrics is, and how complexity grows with the scope of the alliance, or portfolio of alliances. The consensus at the table was that each alliance needs its own metrics, depending on its own objectives.

The lesson of the two events is clear and consistent.

How may alliance measurement become easier?

I believe the choice of metrics is in fact easier than described above, and that choosing the right metrics makes easier both tracking them and measuring the alliance or portfolio.
To keep alliance measurement simple, I believe we can use two guidelines:

  • Base alliance metrics on each partner’s business metrics.
    Choose very few of them, among those business metrics that the alliance aims to impact most, such as sales, margins, innovation of solutions.
  • Tune each alliance metric to the specifics of each alliance, and keep it consistent with metrics for other alliances, by answering one simple question: how will we decide that any one contribution to a company’s business metric is associated to one specific alliance?
    For instance: how can we tell that a given alliance has indeed driven a given new sale? 

Following these two guidelines helps keeping alliance metric results consistent and comparable with the partners’ overall business results, and minimizes tracking effort. This in turn is especially relevant for ambitious, high impact alliances that aim – and claim – to influence a significant share of each partner’s business.  

The second guideline also helps meet a key requirement for an alliance’s success within each partner: that the alliance matches both partners’ cultures.
Each company has strong beliefs, powerful stories, about who wins business, and how. The more consistent we can make the rules measuring alliances with these stories, the more executives and field teams will be prepared to appreciate a contribution from a specific alliance, and so to embrace that alliance.  

What do you think can make measuring alliances easier, in ICT and other industries?

Update: three LinkedIn alliances discussion groups are providing valuable comments in addition to those below:

  1. Alliance & Channels / IT & Telecom – requires admission; members will find the discussion here
  2. Association of Strategic Alliance Professionals – also requiring admission; members find the discussion here
  3. Alliance & Channels Friends – an open group, the discussion is here

I look forward to taking stock of all these suggestions in a following post and in daily alliances practice.


16 responses to “Measuring Alliances in ICT Systems Integration and Other Industries: How Easy?

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  1. Hi Gianluca, Reading through your article I thought “you should have been at the round table”: Measuring the amount of new sales an alliance generates for instance was part of the discussion especially as it was an element that one of the participants in consulting kept busy. His experience was that it is not that obvious to tell if a sale is generated as result of the partnership or that it is influenced by other elements like the sales person at the consulting company who claims to have done it alone and is not prepared to share credits. So how to put a system in place for elements like these? I think in the end the answer lies somewhere in the quote from Einstein, I believe it was, “Make things as simple as possible, but not simpler”. Measurement should be simple and straightforward to keep it measurable and with the lowest debate about the outcome.


  2. Gianluca, An excellent synopsis and worthy goals on measurement to pursue.

    In the UK we had an excellent meeting yesterday evening hosted by the SAS institute at their offices in Marlow, Bucks.

    The title was “Turning a Partnership into a Strategic Alliance”.
    Speakers from Accenture (Neil Miller-UK&I Managing Partner, Accenture Analytics) and Alastair Forbes (SAS Strategic Alliances Manager) together with Sue Reynolds (Alliances Marketing, SAS) shared their experiences, goals and challenges in making their relationship work, together with the measurements of success metrics.

    One item that is hard to measure, and also reflects Peter’s point above-How do you measure the ‘softer’ sales that are created as a consequence of the reputation of the Alliance.
    As was commented at the event-How do you measure the ‘referral revenue’ that is created by someone asking the question about the suitability of the joint solution who then goes on to engage with the suppliers?
    A positive endorsement can create a brand new opportunity that does not appear anywhere else in the Alliance metric measurements.
    The opportunity is created and treated as new business, yet was created as a direct consequence of that positive endorsement and referral.
    Does anyone have a view on how to measure such ‘influenced revenue’?


  3. Hi Gianluca I agree that alliances should only measure a few core things for simplicity and focus but the real challenge comes through in the comments from Peter and Martin, where they highlight the difficulty in proving that outcomes were as a result of the alliance. In my time on alliances I have tried many approaches and as ever one size does not fit all. But the deals that come from the alliance are all that people really care about, so you have to ensure there are good reasons for sales people to assign those to the alliance. They will only do this if they make money from it, so sales incentives are critical.

    As we know sales often collect money on deals that were serendipitous, yet the alliance wants incremental business that is clearly as a result of the aliance. So to create a pipe of net new business the planning has to be solid: target markets/accounts; shape solutions; train teams; create marketing/sales programmes etc and assign some steps to ensure you have veolocity in the pipeline creation. This maybe Exec briefing; Workshop; POC; Pilot or whatever suits your business but if you apply the money at a key gate such as funding the POC then you are starting to pro-actively prime the pump. This brings us back to metrics. If you know your key gates for funding and incentives as well as the outcomes you want then you have your core metrics.


  4. A few colleagues chose to comment through other channels.

    Three colleagues commented in the “Alliances & Channels / IT & Telecom” LinkedIn discussion group –
    A link to the specific discussion is
    Access to this group is controlled; if you have yet to join it, please apply to view full details.
    Other colleagues replied privately.

    Here is my summary of their comments:
    1. One key metric is incremental revenue – applicable to most organizations.
    It’s difficult to agree with direct sales teams on a good way to attach incremental revenue to an alliance. One option here is to engage the head of direct sales and agree with her: first on the role of alliances in helping sales, then on a good metric for this role.
    2. One commenter raises a strong warning on incremental revenue: in most cases the sales team is fully accountable for incremental revenues, so the alliances team lacks accountability on this metric. This may make the metric and its target value difficult to accept.
    3. Another important metric is access to new customer types or segments – for those alliances that have this among their objectives.
    4. Direct revenue from the alliance partner addresses the concern about how to assign incremental revenue to an alliance. Then again, broader incremental revenue may capture better than direct revenue some larger, more significant joint successes.
    5. Many alliance stakeholders in both allied organizations may prefer metrics that capture broader relationship-based features of the alliance – such as how trust, relationship and collaboration help drive innovation, or even field sales.
    These aspects are often more impactful, still more difficult to capture in a quantitative, agreed metric.
    6. A balanced scorecard with multiple metrics can help overcome the single focus on financial metrics such as incremental or direct revenue. This may help defuse issues around one specific metric, and still broadens the challenge of defining meaningful ones.

    My lessons from these comments are:
    a. To measure alliances on revenue indicators, we need at least an agreement between sales and alliances. This is likely on mutual roles first, such as who does what when creating, qualifying and closing opportunities with the alliance partner. Once that is clear, it will be easier to agree on the alliance metric.
    b. Other measures may be as relevant as financial ones to capture the full value of the alliance – for instance, metrics focused on relationship. These may help engage other stakeholders on the broader value of alliances.
    c. For each metric, including financial ones, what we really need is agreement with the stakeholder that owns the metric for the organization as a whole and drives it even independently from the alliances team. It may be good to agree first on the role of alliances in the stakeholder’s business, then on the metric itself.


  5. As in other areas of business (e.g., software development) metrics is a very important and challenging topic. Where you focus attention, what you measure, will get affected by the attention (e.g., if we measure software developers’ productivity based on line-of-code-per-day we’ll get bloatware).

    My comments are focused on the alliance manager him/herself, how they are the ultimate agent of change in the alliance. These ideas suggest that as the alliance manager changes self the atmosphere or climate in the alliance will change and become more collaborative and value-creative. These assume others in the organization will focus on traditional areas of business and the alliance manager is best to focus in areas where others will not or cannot focus.

    In general, the alliance manager should develop personal/alliance performance metrics in the following areas:
    (1) Improving ATTITUDE & MINDSET: in self, in others, to create a more collaborative climate.

    (2) DEEPENING RELATIONSHIP: with self, with others, between others, between companies, between idea; embody relationship-deepening behavior

    (3) SKILLS DEVELOPMENT in the improvement/deepening of relationship, personal development and the real-time/just-enough training of others in the alliance (relationship-ization of others and alliance-ization of their work product).


    There is also some real damage metrics can do to the alliance manager and to the alliance: getting the deal at all cost, maniacal focus on revenue, metrics only focused on the alliance managers part of the organization (not holistic), metrics driven by corporate politics, inconsistency in metrics.

    There is no pat answer. Metrics should be developed and continually refined for the areas where the alliance manager and the alliance need to develop.

    ref: (2 pg PDF)


  6. A strategic alliance in my mind must have innovation and thereby creates a unique offering. Any revenue, margin etc. resulting from a unique offering is therefore very easy to quantify and measure. Without some form of innovation to make a sale unique then the collaboration is more akin to just another reseller channel and should be measured as such.


  7. Gianluca, I would love to help you set up your metrics framework and measurement plan as a part of your firm’s review of how you manage alliances since measurement is an essential component of management. I believe that there is a repeatable process to drive out an appropriate set of metrics as well as a vehicle to interpret the metrics based on their relative importance that gives tremendous insights to stakeholders across the organization (both your firm as well as your Alliance Partner). I would be happy to describe this process to you.


    • Eric, thanks very much. I will be happy to discuss your proposal in more detail. As you may expect, my organization already has a quite comprehensive and effective alliance portfolio management framework, including metrics. The purpose of my discussion here is to learn and share for individual professional growth.


      • I have every confidence that your organization has a comprehensive alliance portfolio management framework. You are in the best position to judge its effectiveness because it is difficult for an outsider to know how your organization defines effective. If there are different types of alliances (e.g., research, go to market, best practice sharing, benchmarking, …) are the effectiveness of these alliances (and portfolio of alliances) assessed the same way? Should they be?


  8. Gianluca, I agree that your premise that simple is better, but the devil is truly in the details. You provide sound guidelines: 1) Base alliance metrics on each partner’s business metrics and 2) Tune each alliance metric to the specifics of each alliance, and keep it consistent with metrics for other alliances

    With respect to Guideline 1, even when you have a few metrics, does each metric carry the same weight (importance) for you? Does your Alliance Partner share this view? Are these outcome metrics or process metrics?

    Outcome metric example: Total Business Closed (by the way, is this total business closed for you, your partner, both? How does “closed business” translate into revenue for the SI Partner and the Platform Partner? Do your revenue recognition rules align between the SI and the Platform Partner? …)

    Process metric example: Opportunity Pipeline (by the way, who expects leads to come from whom? Is there alignment between pipeline stages between the partners? Is there consensus about the length of time it takes to move from one stage to another? …)

    With respect to Guideline 2, it may be difficult to simultaneously tune the metrics to the specifics of a particular alliance while at the same time keeping it the same for other alliances. You may be able to keep the name of the metric consistent (e.g., Revenue) but the exact definition of the metric may change from Partner to Partner based upon how Revenue is recognized. In large deals, there may be more than one Partner involved so it may be difficult, if not impossible, to “tell that a given alliance has indeed driven a given new sale” when there are multiple Partners involved. Even if you can make such a determination, do your Alliance Partners see it the same way?

    Even if measuring the alliance is easy, how are these measures aligned with the goals of your organization? How aligned are the measures with the goals of your Partner?

    For good or for bad, measuring alliances, like measuring relationships, is tricky and one of the things that keeps Alliance Professionals and Marriage Counselors in business.


  9. Hi Gianluca,

    The main success factor for Alliances which crystalizes for me more and more and especially in this tight word economy is the relevance to each other. There is lesser space for convenience and nice to have and a brutal focus on each parties own priorities. If they don’t overlap it is down to the ability to give in order to get..

    Keep me posted



  10. Gianluca, waiting with one’s answer to such a important question gives the benefit of seeing some of the thoughts of others. Reviewing what our colleagues have suggested here based on their substantial experience, shows how important and central the question of how to measure one’ s activities is. I think you are wise to reflect on how to KISSify the approach to measuring the results of conducting business through an alliance construct, and implicitly the effectiveness of the Alliance Manager who is involved.

    We have seen comments that suggest a focus on measuring the alliance manager, some on the individual alliance or others on using measurement categories that are adjusted based on the need of the alliance and its participants. I’d like to suggest that these approaches are all valid, but will ultimately fail to produce desired results. Why?

    Failure to approach the subject holistically (enough). Measuring individual alliances is important for the alliance and for the organization to recognize that an alliance is making the desired contributions (defend its continued existence). However, some aspects, such as does reputation contribute to the individual alliance closing business, are measurements of the business as a whole, not an individual alliance (or alliance manager). The companies involved with the alliance should recognize this and work to measure at an organization level.

    The desire to measure 100% of our actions and divide out to what extent they can be attributed to an individual alliance or alliance manager. Since the comparison with marriage counseling was introduced, I offer you one question: How to measure love and its effective contribution to the success of a marriage. Some things are not measurable and, possibly, should not be attempted to be measured.

    The influence of the human factor and its expression as ‘culture’. The importance of the work of Alliance Managers is in assisting our colleagues understand and work through the challenges of the people factors in making work and relationships ‘work’. As mentioned, the interpretation of the definition of a metric proposed, the alignment of these metrics with existing metrics being used in each alliance partners’ business are just the beginning. The larger challenge is the redirect of the organizational ship’s culture in a direction where ALL involved understand that closing a sale did not depend on a single individual’s action, but on the contributions (over time) of role involved: sales people, marketing people, engineers, R&D, and alliance managers, to name just a few key parties. Of course, compensation structure is an important aspect in generating a different focus, but so is cultural awareness and mindset.

    Alliance Managers are increasingly fulfilling a key role in this process, as they have the training and attributes to play a catalytic role: up, down and across inside the organization, as well as forming the bridge of understanding and trust towards the partners, which helps in addressing these metrics challenges and establish the cyclical dialog of continuous improvement among the members in these ‘Team 2.0’ roles.


  11. Gianluca- thank you for starting this important conversation. As mentioned above Quintiles prefers to use the balanced scorecard approach to developing alliance metrics. While financial value is of great importance it is equally important to measure the relationship aspects of the partnership. While it is difficult to measure trust, love in a marriage (as mentioned above), communication, etc. my recommendation is that you do attempt to put metrics against this dimension.

    One way to measure these softer factors is through the use of a 2 way health check survey. I have found that by turning the qualitative factors into quantitative survey data, management is much more willing to listen and subsequently put time and money into developing the relationship aspects of an alliance.

    Study after study has shown that alliances ‘fail’ in large part due to controllable relationship factors. If we do not put an equal effort into developing metrics in this area it is very likely that the alliance will never meet its financial goals.


  12. Reading all the above had been very interesting to me. My contribution will be limited by my specific experience, limited to the relationships between Indipendent Software Vendors and their sales Partners, which may be (1) Value Added Resellers; (2) Original Equipment Manufacturers; (3) Sales Referral entities.
    I shall limit my comments to case (1), because:
    (a) I think OEM relationship is not a Partnerships, but a Supplier-Customer relationship
    (b) a pure Sales Referral Partnership is not a Partnership, but an opportunistic relationship based on a temporary tactical advantage for both Parties

    In the case of a ISV-VAR Partnership there are a few traps to avoid:
    * Trap 1: ISV consider the VAR as a “sales entity”
    * Trap 2: VAR consider ISV the only entity taking advantage by the agreement, so the only one who has to provide “something” to the VAR (something can be Leads, free assistances and services; etc.
    * Trap 3: each party considers the agreemen as a “making money machine” and expect to make money thanks to the other party only efforts and investments
    They look obvious, but I can assure I saw several partnerships, with a high potential in business increase, to fail because of the above feelings. The common point to the traps above is the disregard for the culture and the business stand point of the other party. Each Party is looking for its own advantage considering the other Party a “subordinate”. The Partnership value measurement indexes will be a consequence: for ISV the number of new sales (or the new revenue stream and associated profit); for the VAR the number of Deals provided by ISV.

    What I belive is a sales ISV-VAR Partnership (more if international) is the meeting of two cultures and two enterpreneurship styles and two different business models.
    The base should be a business plan, shared by ISV and VAR, stating the committments (both parties), the objectives (both parties), the activities (both parties) each party commits to achieve success. And, of course, the business case associated to the plan, stating the investments (both parties) the cost sharing and the revenue sharing
    And the measurement in this case is simple: the successful realization of the business plan and associated business case, eventually revised quarterly.
    To measure the execution of a joint business plan the usual methods are good: balance score card will give the main parameters according to the joint strategy and targets.
    Particularly when the Partnership is between an ISV and a VAR in two different Countries and the ISV purpose is to enter a new market the implemented BSC scenario is “new revenues from new Customers in new market”


  13. Pingback: How do you handle alliance relationship metrics? #alliances — Simoons & Company

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