The value of a central alliance management department

The value of an alliance management department and the use of a systematic approach towards alliances; how to make this value tangible and visible to senior management? A challenging question where an easy answer is not always available.

In go to market or channel alliances answering the question might be relatively easy as the value of the department can be related to the revenue generated. However, for alliances that are more complex or from a different nature, the value of the department or the use of a methodology may be less easy to make tangible.

The benefit of having a department and methodology will be in the faster process of creating alliances and for instance the prevention of common mistakes due to experience and best practices. As such a department, with alliance managers, and systematic approach allow for a faster and more solid approach to alliance management and therefore prevents cost to be made.

As many studies show, including the ASAP 4th state of alliance management study, the use of best practices and a systematical approach to alliance formation and management increases the success rates of alliances. An increased success rate translates back in prevented costs and cost saving of hidden cost. However, it remains difficult to express this in concrete tangible numbers.

What do you think, is there an easy way to express the value of the central alliance management office? Do you make it tangible in your organization, and how do you do it? It would be great to read your view in the comments below.

2 Responses to “The value of a central alliance management department”

  1. Anoop Nathwani

    Peter, I agree with your thinking in this post. All too often companies confuse channel partnerships with strategic alliances and when dealing with strategic alliances look to revenues (and that too, short term revenues) as the only measure. That is a very short term and transactional way of thinking, and they are missing a whole chunk of other “value” (both tangible and intangible) and not looking at a long term approach, which is exactly the way strategic alliances should be looked at. It is a marathon and not a sprint. Strategic alliances, by their very nature tend to be complex, and it is not just about go-to-market revenue generating activities. Having a central alliance management office is in my opinion very important as it allows that office to drive best practices. Part of the best practice thinking and approach is use case studies on how value has been driven in strategic alliances which are complex, and have those case studies available to the wider team as well as senior management, showing the type of value that has been derived and how. That will then start to help people to think differently in these sorts of relationships. Also the role of the central office is to help propogate partnering DNA into the wider organisation.

    Anyway that is my 2c worth.

    • Thanks for your valuable response Anoop. I agree that case studies will have to be a way to show and make the value more tangible. But what if the company is under pressure [by the economy] and is questioning all staff departments. I don’t have the answer yet, but would there be ways to make the value measurable on an ongoing basis?