Alliance Management Definitions
Alignment—Agreement and understanding both between partners in an alliance and also internally within each organization about the goals and purpose of the alliance and how they are to be achieved, what responsibilities and roles are, when and whether milestones are being achieved, decisions to be made, etc.
Alliance—Collaborative business relationship between two or more entities that share assets, expertise, risks, rewards, and control to create greater value for their customers and for their own organizations than could be efficiently accomplished independently (see also Strategic alliance).
Alliance agreement—Contract between two or more organizations that stipulates the terms of their alliance, including mutual responsibilities, financials, milestones, intellectual property use and ownership, governance, etc.
Alliance Life Cycle—The stages of a relationship’s evolution from beginning to end. Typical phases include: alliance-specific strategy, analysis and selection of partners, value-creating negotiations and trust building, operational planning, structuring and governance, launch and management, and transformation or termination.
Alliance manager—An individual, whether so titled or not, whose role is to manage and oversee one or more alliances or an alliance portfolio. Alliance managers must work collaboratively, communicate clearly, and coordinate activities both internally and with the partner to ensure alliance success. In addition, alliance managers often guide decision making (even when they are not the decision makers) for an alliance at the appropriate inflection points, ensure that milestones are met, convene appropriate stakeholders and enlist their support for the alliance, problem-solve, resolve conflicts, escalate issues to senior management as needed, schedule and plan governance and other meetings, etc.
Alliance portfolio—A collection of alliances a particular organization may engage in, which, unlike a network or ecosystem, may or may not have interdependent relationships; i.e., a collection of independent one-to-one relationships.
Co-selling—Joint sales efforts carried out by one or more partners, with the goal of delivering a better, more targeted solution to shared customers. In the IT space, co-selling often involves resellers working with channel or ecosystem partners—e.g., consultants, influencers, ISVs, GSIs, or others—to sell to certain verticals or subindustries where the partner has deeper industry expertise and more specialized knowledge of customer needs. Also termed “joint sales,” “joint sales engagement,” or “collaborative selling.”
Ecosystem—A set of companies that jointly coevolve their capabilities to deliver solutions to customers and create value for their customers and for all partners involved.
Ecosystem manager—A type of alliance manager who manages, orchestrates, and drives an ecosystem toward value creation.
Governance—Oversight of and decision making for an alliance, often conducted by a Joint Steering Committee and/or other mechanisms, governance bodies, and groups as needed.
Integration—Inclusion of new alliances into an organization’s alliance portfolio, typically as a result of mergers and acquisitions, and application of consistent alliance management principles thereto.
Joint Steering Committee (JSC)—A committee composed of members from both parties to an alliance that has responsibility for strategic oversight and decision making for the alliance as it moves forward.
Kickoff—A meeting or series of meetings held with both partners on the commencement of an alliance to ensure alignment around purpose, goals, responsibilities, meeting cadence, communication, etc.
Launch—The process of implementing the operational model for an alliance and integrating tasks and activities into the day-to-day responsibilities of alliance stakeholders (not to be confused with a “product launch”).
Metrics—A measurement system to track whether an alliance is creating the value for which it was established. Alliance metrics measure value in multiple dimensions: strategic, operational, and financial value, and relationship health. Metrics should include leading indicators of performance (necessary actions performed to produce desired results or outcomes such as value creation or revenue to come) as well as lagging indicators of tangible outcomes such as revenue. Certain metrics also function as key performance indicators (KPIs) that track value creation and show the health or progress of an alliance or ecosystem.
Organizational culture—A system of norms and values, tacit knowledge, and accepted behaviors within an organization that underlie its attitudes and approach toward business in general. Example: a hierarchical decision-making culture versus an inclusive and collaborative culture. What is measured and rewarded, how power and control are used, and what strategies are employed to adapt to change are especially important indicators for an alliance professional to understand in both organizations’ cultures, as other factors such as norms and values may be more difficult to define as cultural indicators.
Partner health diagnostic—A process that evaluates the internal, operational dynamics and team perceptions of an alliance as an indicator of performance capacity; a tool that examines an alliance in terms of the degree of fit between partners in the strategic, operational, financial, and cultural dimensions. Also known as a health check or joint alliance evaluation. Questions on a partner health diagnostic might include: Do the alliance teams trust each other? Do stakeholders meet their commitments? Are problems resolved efficiently?
Risk minimization—One of the key purposes of alliance management; involves foreseeing, managing, and mitigating the effects of the business, human, and legal risks or uncertainties inherent in all alliances (see also Value creation).
Stakeholders—Individuals who have a tangible interest in successful alliance performance and who typically have a role that contributes to an alliance’s success. Stakeholders can be internal to the alliance partners (e.g., employees, senior management) or external (e.g., customers or suppliers).
Strategic alliance—An alliance that typically has broad and long-term impact on corporate performance and valuation, often formed to create a competitive advantage for the partners in their respective markets. Not all alliances need to be strategic; alliances can be established to achieve highly operational or tactical objectives.
Termination—Ending an alliance, ideally through a well-managed process that preserves value and goodwill in the event that the corporate relationship may be reconstituted at some future time.
Trust—An essential ingredient in successful alliances. A mutual commitment to fairness, security, integrity, transparency, etc., on the part of both partners, for the good of the alliance.
Value creation—One of the key purposes of alliance management; involves minimizing risk, eliminating inefficiencies where possible, and maximizing effectiveness of alliances (see also Risk minimization).
Value proposition—The promise of measurable benefit resulting from an alliance. A value proposition is a “vision made measurable.” Alliance value propositions are generally defined as three-way wins: for you, your partner, and your joint customer.