Strategic alliances are crucial for companies to gain a competitive advantage in modern markets. Research shows that the number of corporate alliances increases by approximately 25% a year and that those partnerships account for nearly a third of a company’s revenue and value. However, the failure rate for alliances is between 60% to 70%, as business development in this area has been at a snail’s pace.
So, what’s missing? Strategic alliances are not just business arrangements. These partnerships demand a high degree of interdependence between brands, and require the ability to actively navigate and leverage the differences between the partners’ strengths and operating styles. Alliance management and relationship management both involve tools and practices that are used to reinforce strategic alliances with partners and maintain visibility into the relationship.
Alliance management helps a business maintain and track partner performance, while managing key terms and obligations of the deal. Alliance management also works to ensure the operational stability of all partnerships. It serves to build and reinforce strategic alliances, and continually nurture these relationships.
Relationship management involves the supervision and maintenance of relationships between a business and all external partners. Used primarily in the IT industry, relationship management is a system of strategies, methodologies, software, and web-based capabilities that help a vendor better manage partner relationships.
In this article, we'll dive deeper into alliance and relationship management, including project vs. alliance management, what a dedicated alliance manager does, and modern solutions to help you effectively maintain alliance success.
Project vs. Alliance Management
Strategic partnerships are complex business relationships that require the ongoing interaction of two diverse companies, calling upon project management and alliance management to get the job done and deliver on goals. These partners maintain some of the most important reseller channels to maximize sales; thus, a great deal of focus must be put on ensuring a positive relationship.
How do these two roles differ?
Alliance managers tend to focus on communication and collaboration. They want to make sure everyone is working together nicely. These individuals build a bridge between both organizations and unite independent functions to ensure all tasks are coordinated. This is also to make sure communication flows, resources are leveraged appropriately, and the right decisions are made to achieve mutual objectives. In a sense, they are the choreographers in the dance of strategic alliances. They keep the train on the track.
A project manager oversees multiple projects within an organization, ensuring each is delivered on time and on budget. They develop a clear project path, with well-defined outputs, to track progress and deliver on schedule. It is the role of project management to ensure all targeted operational goals are reached and align with the developed project plan. Their job is to maximize return.
Successful alliance managers and project managers also share some traits. They both exhibit a comprehensive understanding of the development and commercialization processes, but may not have in-depth expertise. In addition, both have the ability to manage cross-functional projects, influence without direct authority, deal with multiple issues, communicate the project's vision, comprehend the importance of budgeting, and are excellent communicators with superior organizational skills.
An alliance manager must be strategic and tactical, always thinking about how each step will influence relationships. They must ensure the PM has the environment to deliver within time constraints, staffing, and budget. Their presence is crucial throughout the entire relationship, whereas the need for a project manager may vary within the lifecycle of an alliance project.
In the simplest terms, a project manager is accountable for the project outcome, and the alliance manager is responsible for maintaining project relationships.
What Does an Alliance Manager Do?
The understanding of this important role is varied, but as long as the role adds value, it doesn't matter. In general, alliance managers protect a company's assets, ensure effective governance of the partnership, and maximize long-term value for the business, its partners, and customers. They help show the competition what running a successful channel partner program looks like.
Alliance professionals assist in developing relationship competencies between two companies while fostering negotiation and hashing out payment-related issues. Therefore, they must possess expert-level problem-solving skills to remain proactive and to improve the success rate of alliance teams.
The individual in this role must have specific characteristics to be successful. An AM must wear the hat of a diplomat, lobbyist, analyst, strategist, and relationship manager (to name a few). They are responsible for nurturing a positive relationship between all parties involved.
Typical duties of an alliance manager include:
Identify Potential Partners
It is the AM’s duty to research and identify potential partners that align with the company's strategic goals and vision.
Contract Management and Negotiations
Managing contract creation, execution, and analysis to maximize operational and financial performance, all while reducing financial risk. Negotiating interpretation of the contract as well as implementation.
Assess Risk and Strategic Value
Identifying key risks, as well as the important value drivers, and ensuring teams do not lose sight of strategic goals. The AM should also lead efforts to mitigate risks and work to accelerate value creation.
This may also include looking for ways to extend the relationship by expanding the partnership or creating extra spin-off collaborations.
Develop and Execute Partnership Strategies
An alliance manager works closely with senior management, stakeholders, executives (like the vice president or CFO), and the team members of each organization to develop partnership strategies that align with the overall business objectives and initiatives. Creating this business plan is a full-time job and a massive effort in collaboration.
Supervise Process and Policy
An alliance manager will be responsible for process management and everything that entails. This means establishing smooth operation of ground rules, which can include:
- Protocol for formal governance meetings
- Procedures for decision making
- Project team meetings
- Data exchange policies
- Governance committees
Build and Align Relationships
The alliance manager is responsible for increasing alignment through mutual understanding and trust. This can include activities like kickoff events and periodic team meetings for collaboration. The idea is to cultivate robust relationships with partner organizations to ensure the relationship remains productive and beneficial for all parties involved. They should also be seeking new alliances around every corner.
An alliance manager ensures that the brand of a business is perceived in a positive light. They oversee online reputation management (ORM) activities, as well as how people perceive the partnership within their own company. They would then take any appropriate steps to adjust the brand image accordingly.
This falls under the category of relationship management in general. People arguing within the project or with other partners will hinder productivity. Everything should be smooth sailing at all times, and if it's not? It's up to the alliance manager to fix things.
It is up to the AM to know the project well enough that they can anticipate changes in project stages or collaboration, allowing them to manage transitions smoothly. They serve as the "memory" of the partnership and sometimes must facilitate complex discussions with a partner to map a way forward. Change management is never fun, but an alliance manager with finesse will get everyone on board. If unexpected corporate decisions trigger the need for change, the AM is there to answer everyone's questions.
Monitoring Performance and Progress
An experienced alliance manager will know how to consistently track and monitor the progress of your partners. This includes defining and managing key performance indicators (KPIs), as well as periodic health checks.
The utmost important job of an alliance manager is to consistently engage people and make them feel appreciated. This means, sensitizing one's organization to the partner's differences, explaining how the collaboration operates to a fully in-house project, and internally selling the benefits of the partnership.
Using Relevize for Alliance Management
To date, Relevize is the only partner execution platform that was developed for sellers and partners to maximize their channel sales revenue. They help a business seamlessly onboard new partners and launch comprehensive paid programs with the click of a button. As a result, you can quickly and easily understand precisely where quality leads are coming from and take the appropriate actions in real-time.
The Relevize system is designed to help technology companies drive high-quality leads and brand awareness through their channel partners. Gain visibility into every part of your partners' pipeline and instantly discover which programs are successful, and which may need help.
Relevize is an incredible alliance partner that has enabled brands to rethink what it means to be 'partner first.' Ready to get started? Sign up for a free demo today!