A look back at ASAP’s 4th State of Alliance Management, published in 2010. Has the future envisioned thirteen years ago become reality?
In 2010, in conjunction with Brabant Center of Entrepreneurship, ASAP published their 4th State of Alliance Management, a study designed to investigate the state of alliance management by studying alliance trends, tools, and success rates.
The 2010 report makes 3 predictions for the future:
An increase in alliance management capabilities with a more consistent use of existing tools and the development of new tools.
The evolution of alliance management trends and success measures for both co-selling & co-development
A continued, but slow change to company culture increasing the importance of alliance management within an organization
More than 10 years later, we review the report’s conclusions to see which predictions came true and how alliance management today differs, and venture some predictions of our own.
The 2010 report breaks these down into the following five areas:
- alliance capability
- alliance success rates
- alliance types
- dedicated alliance management teams
- alliance management tools
We consider each in turn.
Alliance capability
Within the 2010 report, Spekman, Isabella and MacAvoy (2000) described the following elements of core alliance capability:
- “Know-how. This pertains to the knowledge a company has about alliances and alliance management.
An alliance-capable company has a deep understanding of the subject of alliances, usually rooted in its experience.
- Supportive processes and structure. These are the tools and mechanisms companies use to manage alliances. They are the best practices, checklists, internal decision-making structures and the like that a company has implemented to support managers in their day-to-day alliance management.
- Alliance mindset. This refers to the culture of the company. Some company cultures are more supportive of alliances than others. The “soft” side of companies may have an important impact on the success of external collaboration.
- Bench Depth. This represents the number of managers a company has who understand alliances. No matter how many tools and processes a company may have in place for alliance management, if it does not have the right people to manage alliances, the failure rate is likely to be high. A sizeable, experienced, and well-trained group of alliance managers is a necessary condition for alliance success.
- Learning. Learning refers to the mechanisms by which alliance skills are recognized and transferred. Alliance management is not an immutable discipline. New best practices continue to be discovered; new models and processes emerge regularly. Continuous learning about alliances is therefore of the utmost importance.”
These elements of alliance capability remain integral to any successful partnership 23 years later.
In 2010, most organizations that had an alliance management function were using the tools available to them well, but the way in which they were implemented was an area “ripe for enhancement”.
Our prediction outcome: 4 of 5
This prediction certainly seems to have panned out. Since 2010, there has been an acceleration in the development of the tools available to alliance managers, from best practices guides, to recommended structures and processes that a company implements to support day-to-day alliance management operations.
Many of these are chronicled in The ASAP Handbook of Alliance Management: A Practitioner’s Guide, the 3rd edition of which was published in 2013, augmented from its original with the help of 29 senior industry professionals and continually updated and released to an ever-growing audience that are looking to constantly improve how they deliver alliance management.
The support in this area has grown significantly over the last 10 years. ASAP’s Signature Conferences have grown in size, content diversity and popularity. These in-person events are coupled with their online content hub, monthly and quarterly Strategic Alliance publications, and a total of 36 additional online events that took place in 2022 alone.
Alliance capability, whether content, information, or direct support, has been significantly enhanced, to meet the same growth in alliance management that was predicted.
Alliance success
At the time of the report’s publication, “the average success rate of alliance portfolios has remained at around 50%”. Success being measured through the single metric of whether the stated company goals were achieved.
When looking at the data of the 2010 report, it was interesting to see that some companies had much higher success rates. These higher levels were attributed to greater investment from that company in their alliance management function.
“Alliances generally achieve their desired objectives at a higher rate when organizations apply the most current iterations of these practices and methods—many of which are widely available to members of ASAP”
In fact, the report found that ASAP members were 7% more likely to be successful, based on achieving company goals.
ASAP predicted that “For low-performing companies the answer may be simple: they may still increase the use of tools. High-performing companies may perhaps develop new tools and invest in more consistency in the use of existing tools.”
Our prediction rating: 4 of 5.
We think alliances are a lot more successful than they receive credit for, for two reasons. First, “alliance failure” is often defined far too broadly and includes when objectives were only partially but not completely achieved. Second, modern alliance management success is judged on a lot more than just achieving company goals and the tools available to do this have, as predicted, developed over the last 10 years.
At the ASAP Global conference in Tampa, in April 2022, Michael Roch, Chief Commercial Officer for allianceboard, spoke about the many alliance analytics that can be used to measure success. Roch suggested that “alliance management leads in educating its stakeholders on a unique set of outcome, activity and alignment measures.
Outcome measures differ from alliance to alliance and are very specific to a
deal, while activity and alignment measures operate across the purpose of all alliances within the organization’s alliance portfolio. Alliance managers need to become thought leaders especially in activity and alignment measures.”
Alliance types
When it comes to alliance types, this is where we see the greatest changes.
The 2010 report observes that “by far, the most popular alliance type is the Co-marketing/Sales agreement”.
More commonly referred to as Channel Marketing with Channel Partners, the ability to partner for go-to-market initiatives is a fundamental requirement for any modern global organization. These co-selling partnerships now best operate in ecosystems with multi-dimensional interactions and agreements that result in significant opportunities for all involved.
When looking at different alliance types, the report stated that “There only appears to be a small but steady growth in R&D alliances.”
R&D or co-development alliances continued to grow at a steady rate and in a 2021 ASAP webinar, created in conjunction with Vantage Partners, a poll asking “how much innovation at your company comes from or involved collaboration with, third parties? “ reported that 66% of participants responded with ‘most’ or ‘a great deal’ of their collaboration comes from collaborating with third parties.
Our prediction rating: 3 of 5
In the same webinar, they also reported this 66% “experienced a 177% greater increase in their revenue compared to those with little to none.” (Little to none of their collaboration comes from collaborating with third parties.)
Dedicated alliance management teams
In 2010, alliance experience was growing and of those surveyed, “more than 20% of the companies now have established alliance portfolios of more than 40 alliances.” The report explained that “Many studies have shown that firms that are active in alliances increase their visibility towards potential partners and therefore get even more options for partnering.”
The report identified that organizations had become more efficient at managing their alliance portfolios and predicted that they would continue to build these in a more strategic manner. As they did, with many strategic alliance teams reporting directly into the C-Suite, the impacts and gains produced by partnerships are attributed to the work of the alliance management team.
Our prediction rating: 4 of 5
The number of alliance or partner management roles has grown exponentially, and the nascent alliance management function continues to professionalize. Yet some organizations continue to prefer decentralized models – with their own advantages and disadvantages.
Alliance management tools
Digitization is greatly improving alliance management capability. As predicted in the 2010 report, alliance management has grown and with it, the operational tools required to deliver and maximize the success of partnerships.
Our prediction rating: 5 of 5
Technical advancements of digital tools created to support alliance managers saw an increase in necessity with the advent of Covid-19 in 2020. The pandemic accelerated digital transformation for all business functions, however, a digital approach to alliance management has allowed alliance managers to better track projects, plans, risks, timelines, and required actions in real-time, from any location.
As a consequence, digitizing the routine work of alliance management has allowed alliance managers to automate many repetitive administrative tasks, focus on higher-value services and provide timely strategic oversight.
Did the future of alliance management become reality?
All in all, the predictions from more than a decade ago have been remarkably accurate and alliance management continues to grow from strength to strength.
Look out for a future article on how we see the drivers for alliance management success in the next 10 years.
For more information about how allianceboard can support your alliance management contact us here: contact@allianceboard.com