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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.

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