What is alliance management




















Alliances vary by industry, size, complexity, type, and more. Whatever the size, industry, type, or stage, alliances all need to be managed so that they can achieve their strategic intent. ASAP principles and practices give alliance professionals the tools to manage their alliances, ecosystems, and other collaborations better and more successfully.

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How the job is carried out also depends on the project manager. Mary Ann Borton, an alliance director at the global pharmaceutical company Astellas, has a unique perspective, as she was formerly a project manager for the company.

Our fictitious project manager assumed that his responsibilities naturally would extend to the alliance. In many situations, this is true. For many companies, project managers may assume some aspects of the role, accepting the alliance as just another component of the project. Even when a company does have dedicated alliance managers, their number is usually small, leaving others, often project managers, to attend to the needs of the alliance in addition to the needs of the project or program in all but the most complex situations.

Co-development, co-manufacture and co-commercialization are becoming much more frequent in industry. What makes an alliance an alliance is that there is shared decision making, shared responsibility and accountability, shared resource commitment and shared risk and reward. Generally, the ultimate risk and reward cannot be determined at the time an alliance agreement is reached.

Examples of successful alliances include the Renault-Nissan alliance, in which the two companies have benefited from sharing various aspects of product design, development and manufacturing. Also, semiconductor manufacturers such as IBM have found great benefit in teaming up with competitors, including AMD, Sony and Toshiba, to spread the costs and risks of next-generation computing power.

The project manager will continue to have responsibility for the execution of the project. He will have to do everything he would if it were a strictly internal program.

However, because it is an alliance, there will be great differences compared to management of the usual internal project. He will work directly with his counterpart from the partner organization to orchestrate the creation and execution of the development and manufacturing plans for their new joint battery project. 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.

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. 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. 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. Alignment and relationship building: Leading efforts to increase alignment, mutual understanding, and trust between collaboration participants, including activities such as the kickoff event and periodic collaboration team events. Strategic value and risk management: Identifying the important value drivers and key risks, ensuring those involved do not lose focus on strategic aspects, and leading efforts to mitigate risks and accelerate value creation; may also include looking for win-win opportunities to extend the relationship by expanding the existing partnership or creating additional spin-off collaborations.

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