After your company has been in business for a while, your customers will begin asking for a product or service that you don’t have the resources to provide. Alternatively, another company might reach out to you for the same reason. While this growth is a great sign for your business, you should carefully evaluate each partnership opportunity, including partnership expansions, with a cold, hard look.
Partnerships can be great because they can open doors for you and invite you into deals you wouldn’t have been in otherwise. They can also multiply your market. Ideally, you want to create partnerships that produce a win-win-win result for your organization, your partner, and your mutual customers.
Types of Partnerships
The evaluation you create begins with determining the type of partnership: a product or a service. For example, having a hardware or software product partner might require a substantially different evaluation from determining a staffing partner, which provides a service of staffing your (or your customers’) organization.
Top Considerations for Adding a Partner
Being asked to be a partner can feel as if it’s a no-lose situation, especially if the other company is offering you what seem to be good incentives to do it. At first, it might seem like effort will be required of your organization to deliver results. However, the added complexity offers its own challenges:
- Commit to the management requirements. While your company won’t be doing some of the work, it will require administrative effort to make your combined projects successful. Your partner typically has a partner portal that you need to keep up to date. You must track your activity in the partner CRM system as well as your own. As with any good partnership in life, good communication is required, too. Someone needs to be staying on top of partner incentives and feeding that information to the relevant people in your organization in a timely manner. If you can’t commit to this, chaos ensues, and the partnership won’t work in the long term.
- Verify that it’s a positive relationship for both organizations. If it’s not a positive relationship on either side, it’s not worth starting or expanding a relationship. Balance in the relationship where both sides have something to gain or lose will keep the relationship strong for the long haul. Use extra caution when considering a partnership with an organization much larger or smaller than your own. The imbalances can provide an outsize advantage to one of the organizations and might not feel mutually beneficial. For example, a large company might find that the smaller company can’t support the larger organization’s needs. If you work for the small company, there might be an incentive for the larger organization to bigfoot your organization to change in undesirable ways just to maintain the partnership, such as demanding exclusivity that wouldn’t be good for your business.
- Take a selective, proactive approach. Determine whether this is a key partnership. You don’t want to create a long list of partners with all the overhead that goes along with it. CGI, for example, is a multi-billion-dollar company and has only nine key strategic partnerships. Put your effort into developing partnerships that will make a large positive difference to your customer relationships. You should know what your company needs to complement your current offerings versus just considering each partnership as the offers come along. A matrix, a sample of which is provided below, can help you score a potential partner.
- Evaluate culture and corporate values. Having similar approaches in how you do business can help the relationship. If you don’t mesh culturally, you might have difficulty managing the relationship and presenting a unified approach to your customers, not to mention that you’re sharing one reputation as you enter a deal. If you share approaches and values, it should appear to your customers that you’re presenting a unified solution.
- Determine how joint marketing will work. Both partners need to agree how to market services and products to customers. Again, both partners must benefit. For example, if you’re working on a joint case study or white paper, one partner can’t be the hero of the story.
- Reveal any conflicts of interest. If your work overlaps in any way with a potential partner, dig in deep and make sure you know where the lines are. It’s better to make the decision not to go forward with a partnership agreement or to at least have the rules explicitly spelled out before an issue occurs. For example, CGI is a service organization. We might partner with a hardware provider for customer solutions but not engage with their service division in any way.
- Approach any exclusive partnerships carefully. Don’t be too eager to sign with a partner as an exclusive provider of a service or product, such as one cloud provider. You might lose a customer over a technology that had nothing to do with what you’re providing. However, if you’re just starting out, partnering with one technology might allow you to develop strong expertise in that product or service and help you reach the next level.
I’ve included this sample template to kickstart your thinking about which factors are most important for your organization to consider in partnership evaluation. This is only a starting point, but working with such a template can help your organization make a data-driven, rational decision. This process might save you if a high-level executive makes a recommendation because he has a good relationship with someone at the other company.
Debra is a Senior IT Leader with 30 years of experience providing solution architecture and advisory consulting services across IT Service Management, IT Operations Management, Service Desk, and Customer Relation Management solutions. Debra is a trusted customer advocate based on her strengths in shaping strategic transformational roadmaps to help clients achieve their long-term objectives.