8 Critical Success Factors to an Effective Strategic Partnership
At no point in history has it become more important to understand the phrase, “stick to your knitting.” Although in a rapidly changing world, doing the same thing better won’t necessarily help. Consequently, what ‘knitting’ should you focus on and how might you source the necessary ‘knitting’ capabilities needed? In this editorial we’ll provide you a framework that allows you to develop an approach to understand your motivations and the necessary partnership structures to develop successful outcomes.
There’s only so much time available, personnel and capital to pay them, let alone invest in growth! Resources are limited, however, knowing where and how to invest these resources is becoming increasingly difficult for business success. Wouldn’t it be wonderful if we had a crystal ball to see through complexity? One of the drivers of complexity is the increasing pace of change and fragmentation driven by technological innovations. To illustrate, Gartner and ChiefMartech demonstrate the number of technology companies developing marketing software exploded from under 200 in 2011 to approx. 4,000 in 2016. This explosion causes more complexity; what’s the right technology to acquire, how should it be managed and what constitutes success? Answering these questions impacts your ability to compete because as CIO Magazine state, “most companies don’t have the employees available to manage the emerging technology platforms” of paperless and always connected, mobile and cloud enabled systems. This challenge characterises the independent retail channel situation. The holy grail is a partnership structured across end-to-end customer touchpoints, via technology and domain expertise.
Deloitte explains, companies partner to seek cost savings, enable core business functions, and solve capacity issues with leading practice organizations to drive transformational change and improve business results. This leads to various partnering options.
The need to partner has three motivational dimensions. First, there’s the transactional need for a resource; the exchange of product/services for cash. Second, co-ordination, the sharing and exchange of information to improve the coordination and synchronisation of key processes. Finally, collaboration, the exchange of information and knowledge amongst partners to deliver new or enhanced products and services to customers.
There are different partnership structures, with the main objective being the need to establish the level of control and flexibility for the partnership. This consists of two options; First, loosely coupled (suitable if risk is low) allowing the organisation to attract more business partners, creating partnering flexibility whilst enabling realisation of niche players’ capability. The second being tightly coupled (suitable if risk is high.) This allows for tightly defined relationships with a focus on solution quality and scale rather than pure speed to market. However, this does increase switching costs.
According to Harvard Business Review, Accenture and our own experience, a successful partnership has 8 specific critical success factors.
- Strategic alignment: The context is understood and supported.
- Collaborative governance: Adopting a partnership attitude with dedicated organisation.
- End-to-end approach: A holistic approach to managing the relationship scope.
- Business outcomes: Targeting strategic outcomes not just efficient transactions.
- Relationship between partners: Fostered through common culture and trust.
- Value beyond cost: Focusing on win-win benefits beyond cost reduction.
- Technology as a business enabler: Low cost and high value, driving operational improvements and innovation.
- Domain expertise and analytics: Contextualising data to create business value.
In GPK Retail business consultant, Cordell Quaine’s words, “providing value through understanding business outcomes is critical to our customer’s success. GPK isn’t a technology reseller or an outsourcer in the finer sense of the words, GPK is a solutions company focusing on establishing long-term coordinated and collaborative partnerships with technology as an enabler. We know our client’s success is our life blood, we endeavor to ensure the companies we represent have the technological edge over their competition. Our customers have access to a broad range of solutions including Merlin™ retail software, managed services, help desk and onsite support, ‘as-a-service’ private and public cloud infrastructure and software platforms, networking, hosted services, phone systems and SIP, security systems, web development, internet services (from NBN™ to ADSL to Wireless) and retail business technology consulting.”
If change and meeting your customers’ needs is a constant, doing nothing isn’t an option. Be sure you are partnering with a company with the depth and breadth of expertise you require. Particularly one who can help you navigate end-to-end managed services, cloud, mobile and paperless retail technology. GPK Retail consultant, Cordell Quaine, is available for a no obligation discussion on how GPK can help you reduce operational costs, manage your IT footprint more effectively and create an exceptional experience for your customers. Contact: Phone 1300 000 475 or email [email protected] for more information.
This article first appeared in the May 2017 issue of MGA’s Independent Retailers magazine.