1. Benchmarking Alliances A Discussion Document from Alliance Best Practice

2.  Understanding Begins with Insightful Questions – In other words good data = good decisions and bad data = bad decisions  What would ‘good’ data look like (as opposed to bad or misleading data)?  What should we measure and why?  What would a good benchmark overview report look like?  What are the proven common success factors (CSFs) in successful strategic alliances?  Why is benchmarking different from health checks?  What is the typical revenue increase after a benchmarking exercise?  Further Details Issues addressed in this briefing pack

3.  Why do some alliances succeed when others fail?  Has there ever been any structured research in this area?  Is there such a thing as alliance best practice?  Is there a common ‘language’ or approach which can be applied consistently across different types of relationships?  What are the limited things that we should focus our attention on to effect the greatest change?  “The most valuable information for corporate decision-making is concentrated in a relatively small number of sweet spots of information that flows through a corporation 2 ”  What are the alliance sweet spots? 1 Anthony Robbins 2 The Performance Manager Roland and Patrick Mosimann and Meg Dussault Understanding begins with insightful questions 1

4.  1 Every decision making cycle depends on finding the answers to three core questions;  How are we doing?  Why?  What should we be doing?  Today’s alliance manager needs integrated decision making ability in various user modes; Strategic, Managerial and Operational 1 The Performance Manager Roland and Patrick Mosimann and Meg Dussault 2007 Alliance decision making cycle

5.  Holistic and integrated representing all aspects of the relationship  Simple to understand (intuitive)  Provide striking insights  Reflect multiple dimensions of the relationship  Reflect both / all sides views  Objective and numeric  Rigorously researched  Capable of action planning  Capable of benchmarking  Enable action to be taken linked to the insights  Simple to operate  Encourage involvement and commitment from all key stakeholders  Be capable of regular refresh What would a good benchmark look like?

6. Benchmarks  Based on objective scoring systems  Based on competitive comparator analysis usually not available to clients  Prescriptive because its based on known common success factors  Typical question = ‘What is the degree of trust in the alliance from 0 to 100’?  Results produce actionable outcomes Health checks  Based on subjective views and opinions  Usually an internal exercise  Based on views from existing partners who want to please the host client  Typical question = ‘How ell do you think the alliance is performing?’  Unable to act on results Why are benchmarks different from health checks?

7.  The Blue Line is one partner  The Pink Line is the second partner  The Yellow line is sector best in class (BIC)  Now lets test understanding!  How much consensus is there in the relationship?  What is going well and what is going not so well?  What particular dimensions does the BIC base its success on? A typical benchmark report

8. Commercial Dimension Co1 Business Value Proposition (BVP) Co2 Due Diligence Co3 Optimum Legal / Business Structure Co4 Alliance Audit Co5 Key metrics Co6 Alliance reward system Co7 Commercial cost Co8 Commercial benefit Co9 Process for negotiation Co10 Expected Cost value ratio Technical Dimension T11 Valuation of assets T12 Partner company market position T13 Host company market position T14 Market fit of proposed solution T15 Product fit with partners offerings T16 Identified mutual needs in the relationship T17 Process for team problem solving T18 Shared Control T19 Partner accountability Strategic Dimension S20 Shared objectives S21 Relationship Scope S22 Tactical and strategic risk S23 Risk sharing S24 Exit strategies S25 Senior executive support S26 B2B Strategic alignment S27 Fit with strategic business path S28 Other relationships with same partner S29 Common strategic ground rules S30 Common vision Cultural Dimension Cu31 Business to business trust Cu32 Collaborative corporate mindset Cu33 Collaboration skills Cu34 Dedicated alliance manager Cu35 Alliance centre of excellence Cu36 Decision making process Cu37 Other cultural issues Cu38 Business to Business cultural alignment Operational Dimension O39 Alliance process O40 Speed of progress so far O41 Distance from revenue O42 Formal business plan O43 Communication O44 Healthcheck / quality review O45 Alliance charter O46 Change management O47 Operational metrics O48 Business to business operational alignment O49 Exponential breakthroughs O50 Internal alignment O51 Project plan O52 Issue escalation Co = Commercial T = Technical S = Strategic Cu = Cultural Op = Operational Common Success Factors

9.  Co1 Business Value Proposition (BVP)  Co2 Due Diligence  Co3 Optimum Legal / Business Structure  Co4 Alliance Audit  Co5 Key metrics  Co6 Alliance reward system  Co7 Commercial cost  Co8 Commercial benefit  Co9 Process for negotiation  Co10 Expected Cost value ratio The Commercial dimension

10.  T11 Valuation of assets  T12 Partner company market position  T13 Host company market position  T14 Market fit of proposed solution  T15 Product fit with partners offerings  T16 Identified mutual needs in the relationship  T17 Process for team problem solving  T18 Shared Control  T19 Partner accountability The Technical dimension

11.  S20 Shared objectives  S21 Relationship Scope  S22 Tactical and strategic risk  S23 Risk sharing  S24 Exit strategies  S25 Senior executive support  S26 B2B Strategic alignment  S27 Fit with strategic business path  S28 Other relationships with same partner  S29 Common strategic ground rules  S30 Common vision The Strategic Dimension

12.  Cu31 Business to business trust  Cu32 Collaborative corporate mind-set  Cu33 Collaboration skills  Cu34 Dedicated alliance manager  Cu35 Alliance centre of excellence  Cu36 Decision making process  Cu37 Other cultural issues  Cu38 Business to Business cultural alignment The Cultural Dimension

13.  O39 Alliance process  O40 Speed of progress so far  O41 Distance from revenue  O42 Formal business plan  O43 Communication  O44 Health check / quality review  O45 Alliance charter  O46 Change management  O47 Operational metrics  O48 Business to business operational alignment  O49 Exponential breakthroughs  O50 Internal alignment  O51 Project plan  O52 Issue escalation The Operational Dimension

14.  Which can you live without? -Your heart or your brain? -Your lungs or your blood?  What happens if you have; -Commercial and not Cultural? -Operational and not Strategic?  How do each of the dimensions help each other?  The answer of course is that you need all the dimensions in –  An Alliance Balanced Scorecard Strategic Alliances are ‘Holistic’

15. Why are there differences in perception? Will this hamper performance? How can we improve our scores nearer to best practice? What would the commercial impact of this improvement be? Why and how should we improve?

16.  Holistic and integrated  Simple to understand  Provide striking insights  Reflects multiple dimensions  Reflects both / all sides views  Objective and numeric  Rigorously researched  Capable of action planning  Capable of benchmarking  Simple to operate  Be capable of regular refresh Red-Amber-Green (RAG) Dashboard

17. $6m CoTSCuO $23m CoTSCuO 68 9766 81 68 2042272843 Valuation of Assets Market Fit of Solution Product Service Fit Mutual Needs Team Problem solving Shared Control Partner accountability Breakthrough Value Proposition (BVP) Alliance Audit Key metrics Alliance Reward System Commercial Cost Commercial Benefit Process for Negotiation Expected Cost Value Ratio Shared objectives Relationship Scope Risk Identification Risk sharing Exit Strategies Senior Exec Support B2B Strategic Alignment Other Relationships Common Ground Rules Common Vision Trust Collaborative Corporate Mindset Collaboration skills Dedicated Alliance Resources Alliance Centre of Excellence Joint Decision Making Process Other Cultural Issues B2B Cultural alignment Alliance Process Speed of Progress Distance from Revenue Formal Business Plan Communication Quarterly Healthcheck MOUP Change Management Operational Metrics B2B Operational Alignment Exponential Breakthroughs Internal Alignment Relationship Plan A more complex (RAG) Dashboard

18. Alliance Success The effectiveness with which an alliance achieves its primary value-creating activities. David C Simon and Peter J Lane – Journal of International Business Studies 2004 Commercial Technical Strategic Cultural Operational Goal / ObjectiveCommon Success Factors (CSFs) InfluencersContributors Task Relevance Stage Control Skills ?? Importance Activities Organisation Training Resource Allocation Leadership Prioritisation 1230 ?? This is a multiple interaction I.e. many to many relationship An actionable framework

19. Goal / ObjectiveDiagnosticAction Planning Resource Mobilisation 1230 £/$/€ S L R H Impact x Number of Partners Contributing R A C I Outputs / Tools per stage

20. Identify Best Practice Assess Reality of Results Review Pilot Understand Framework Get Coaching Select Relationship/s Secure Internal Support Identify Gaps to Best Practice Construct (ST) Pilot Secure Partner Support Conduct Diagnostic SHORT 0 - 30 MEDIUM 30 - 90 LONG 90 - 360 Secure Internal Support Secure Resources Launch (ST) Pilot Decide whether to scale Construct (LT) Programme Decide new team Decide new scope Secure Resources Launch (LT) Programme 123 Action plan overview (Example)

21. ABP Case Studies in High Tech (Sample) Average increase in the database is 250% - 650% ClientPartnerTargetIncrease CapgeminiIBM $19m $51.3m UnisysLenovo $4m $6m CapgeminiMicrosoft $230m $782m CognosIBM $23m $69m CognosIBM €12m €42m OracleIBM €6m €22.8m BT8 Partners £150m £480m Micro FocusAccenture £3.5m £17.01m Siemens AGPwC €4m €16.2m APCIBM $3m $7.98m Total454.5m1494.29m ClientPartnerTargetIncrease ChordiantIBM$16m $80m CapgeminiHP€34m €61.2m CapgeminiOracle$18m $82.8m SiebelIBM$900m $1044m UnisysEMC€13m €18.59m BTFujitsu£12m £15.24m SAP32 Partners€65m €152m HPStorageTek£26m £41.6m BTCisco£5m £30m AlcatelBT£4m £7.6m Total1438m1975.53m

22. Further Details For further details please contact; Mike Nevin Managing Partner Alliance Best Practice Ltd Web: www.alliancebestpractice.com Office: +44 (0)1675 442490 Mobile: +44 (0)7766 752350 E Mail: mike.nevin@alliancebestpractice.com