2. Page 2
VST Agenda / Contents
The VST model = 250% - 650% increase in alliance sales within 12 months
Executive Summary
Introduction to alliance best practices
The connection between alliance best practices and the VST model
The components of the VST model
Comparison of three case studies to the VST model
1
2
3
4
5
Implications of the case studies and the VST research
Research recomendations
Next steps
6
7
8
3. Page 3
Executive Summary
Companies use formal methodologies in direct sales with great
results.
Indirect sales are becoming increasingly important to software
companies.
A very important indirect sale route is an alliance or even a strategic
alliance.
Until now there has not been a formal and standard alliance sales
system that companies could use.
ABP has now developed such a system by observing and
documenting over 100 software / SI alliances.
The system is currently being used by: IBM, Oracle, Capgemini,
Tieto and Qliktech.
The system is based on three critical components: Vision, Skills,
Trust. Hence the name VST Methodology.
Users of the system typically see a 250% - 650% increase in
alliance sales within 12 months.
Using a systematic approach to alliance sales produces better results
4. Page 4
What is Alliance Best Practice (ABP)?
ABP is a benchmarking consultancy specialising in B2B strategic alliances
Alliance Best Practice
Alliance best practices are those
actions that research has shown lead
to optimal alliance results
ABP is a group of over 20
international alliance experts able to
cover the world and work in multiple
languages
ABP is dedicated to: discovering,
developing and disseminating best
practices for its clients
It does this through the ABP
Database (ABPDBTM)
5. Page 5
Alliance Best Practices Exist
Best Practice approach is
recognised in General
Management theory -
goes hand in hand with
quality and
benchmarking.
ABP has examined
27,000 international
collaborative relationships
from around the world.
We found factors which
appeared consistently in
successful strategic
alliances (CSFs).
Research
Critical Success Factors
(CSFs) - ‘Those practices,
principles, procedures,
behaviours or factors
which appear in
successful strategic
alliances in a statistically
relevant manner’.
Tested the concepts with
over 300 companies since
2002 (ongoing).
Research findings
regularly validated.
Validation
Identified alliance best
practices and CSFs are
lodged in the ABP
database.
The ABP database
currently holds over
180,000 observations of
these CSFs in practice.
Research shows
overwhelmingly that doing
the right things (best
practices) produces the
right results (more value /
revenue).
Implications
ABP has investigated over 27,000 alliances to identify success factors
6. Partner ‘Intimacy’ Spectrum
Commodity Price
Interchangeable
Product
Highly specified
deliverables
Buy from and sell
to
Shared risks &
investment
Deeply integrated
Mutually
interdependent
Breakthrough
market value
Some customization
Flexibility/levels of
service
Special knowledge
Buy from, sell to and
sell with (GTM
together)
Customized/
individualized
Process & data
integration
Solutions oriented
Greater cost value
leverage
0 Sell To 25 Sell On 50 Sell Through 75 Sell With 100
Both partners need to define the type of partnership.
Low Score generally indicates low ‘business intimacy’.
Low
Value
High
Value
Low
Intimacy
High
Intimacy
Page 6
7. Page 7
Commercial Technical Strategic Cultural Operational
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
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
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
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 B2B Cultural
Alignment
O39 Alliance process
O40 Speed of progress
O41 Revenue flow
O42 Business plan
O43 Communication
O44 Health check
O45 Alliance charter
O46 Change mgt.
O47 Operational
metrics
O48 Operational
alignment
O49 Exponential
breakthroughs
O50 Internal alignment
O51 Project plan
O52 Issue escalation
Critical Success Factors
There are currently 52 CSFs in 5 categories
8. Page 8
Connection Between ABP and VST Model
VISION : S30 - Is there a
common vision of the
strategic intent of this
relationship?
STRATEGY : O45 - Does
a relationship strategy
document exist?
SENIOR EXEC
SUPPORT : S25 - What
support is there from
senior executives in the
business for this
relationship?
Vision
ALLIANCE PROCESS :
O39 - Do you have a
defined alliance process?
PRODUCT / SERVICE
SKILLS : T14 & T15 – Do
both sides know how to:
sell, implement, and
maintain the products /
services for the client?
COMMUNICATION : O43
- What elements of
communication are
present?
Skills
TRUST : Cu31 - What is
the degree of trust in the
relationship?
DECISION MAKING :
Cu36 - How long is the
decision making process
in your partner’s
organisation? And how
does this compare with
decision making in your
organisation?
CULTURE : Cu38 What
degree of B2B cultural
alignment exists?
Trust
The VST methodology is a simplified version of the full ABP framework
9. Page 9
Commercial Results Closely Follow Best
Practice Scores
There is a clear relationship between VST score and increased value
Higher VST Score = Higher Value
The chart opposite shows examples
from the database of Software and SI
alliances.
ABP has been collecting data since
2002.
In that time a clear trend has
emerged ‘proving’ the effectiveness
of the VST Methodology.
Annual benchmarking is crucial to
success.
Resetting the strategic direction
annually is important.
15
19
27
29
36
41
50
28
39
49 48
65
61
71
0
10
20
30
40
50
60
70
80
2004 2005 2006 2007 2008 2009 2010
The columns show average ABP scores
The Line shows average commercial return
10. Category Vision Skills Trust
Purpose To create a Vision and a
strategy for the relationship.
To develop the skills and knowledge
needed by both / all partners for
success.
To grow the relationship effectively over
time.
Objectives Agree partnership type
Agree partnership scope
Identify key stakeholders
Agree current (baseline)
Develop Business Value
Propositions (BVPs)
Document the vision and
strategy for the
partnership.
• Agree a go to market (GTM) plan.
• Improve both / all teams
collaboration skills.
• Develop governance model
• Develop communication
programme
• Achieve a high degree of internal
and B2B alignment.
• Train all partners appropriately on
the chosen products and services
of the BVPs.
• Increase the degree of organisational
trust between all parties
• Deliver BVPs to time and quality
• Increase the number and type of BVPs
sold.
• Secure investment funding and
executive support for the partnership
from both / all partners.
• Identify and eradicate cultural barriers
to progress
• Monitor and manage progress to key
performance indicators (KPIs)
Critical Success
Factors (CSFs)
Common Vision
Formal Business Plan
Alliance Process
MOUP
Collaboration Skills
Communication
Internal alignment
B2B Operational alignment
Trust
(B2B) Cultural alignment
Senior Executive Support
Operational Metrics
Outputs Scope statement
List of key stakeholders
Initial relationship value
Go / No go decision
Partnering readiness
assessment
Joint go to market (GTM) plan
Governance model
Communication programme
Training plan
Skills gap analysis report and
action plan for remediation
Relationship development plan
Alliance balanced scorecard
Change management plan.
Annual relationship strategy review
BVP innovation process
The VST Methodology Overview
Page 10
11. Page 11
The VST Methodology in Action
Customer was Banco Pastor
a large retail bank in Spain.
The partners were IBM
Software and Accenture. The
relationship impressed the
bank the most (out of 19 other
offerings).
Capgemini implemented the
Partner Networks Cloud-
Ready Data Centre Solution.
The result for the client was
improved networking
capability whilst reducing
cost.
TCV = €3.4 million
Case 1 - VST 88
Customer was Siemens in
Germany. The partners were
Capgemini and Oracle.
Project was implementation of
a high availability data center
interconnection system.
"It (this project) couldn't have
been delivered alone. I am
really pleased about the
quality of cooperation with our
partner.” Maciej Wardaszko
(Corporate Managed Account
Director Capgemini).
TCV = €6.5 million
Case 2 - VST 84
The client was Nokia in
Finland.
The partners were Tieto and
Microsoft.
Both had struggled to make
any headway with the key
account.
Both were facing ‘meltdown’
and removal from the
account.
By combining offerings and
working together they
managed to stay in the
account and increase account
revenue.
TCV = €3.2 million
Case 3 - VST 87
In all three cases a high VST score = high commercial return
12. SAP + SIs Extended Case Study (Extract)
Partner Country Diagnosti
c
Stage Base (€m) New Action
Accenture UK Y/Y 2.3 €6.0 €14.3 Roll out BVP
Capgemini Nordics Y/Y 2.2 €4.3 €9.2 Develop
BVP
IBM Benelux Y 1.4 €8.6 €18.5 Conduct
workshop
Atos France Y/Y 3.2 €2.6 €5.3 Track
progress
Logica South Africa Y/Y 3.3 €2.4 €5.8 Track
progress
BDO
Unicom
DACH Y 1.3 €1.1 €3.5 Conduct
workshop
Ciber
Novasoft
Russia Y/Y 3.3 €0.75 €2.4 Review BVP
Bearing
Point
Germany Y/Y 2.3 €3.1 €4.8 Develop
BVP
Frontworx Austria Y/Y 3.0 €0.80 €1.2 Renew SE
support
Totals €29.65 €65.0
Page 12
13. Page 13
Recomendations
Results showed that VST
= Better Relationship and
Commercial Results
Recommendation :
Adopt the VST Model in
multiple countries with
multiple partners.
In country alliance
managers and salesmen
are not aware of VST.
Recommendation:
conduct a training
campaign with partners
to demonstrate value of
VST.
The VST approach is not
suitable for all partners.
Just the more advanced.
Recommendation:
Benchmark partners to
choose potential pilots.
Following a VST approach gives tangible successful results consistently
14. 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
