Business Partner Selections

What is business partner selection and why is it important?

Business partnerships are strategic alliances that typically involve sharing revenues, costs, strategies, and risks. Organizations make these agreements with one or more companies to enhance or develop specific business activities. Each partner aims to benefit from the strengths of the other(s) to achieve an overriding objective or goal.

When there are many strategic alliances in play for an organization, the selection process can be better managed by organizing the alliances into portfolios, using one or more of the following attributes:

  • Category (e.g., products, services, branding, marketing, loyalty, etc.)
  • Type (e.g., joint venture, outsourcing, marketing, distributors, licensing, franchising, R&D
  • Geography based (e.g., city, state, region, country, or continent)
  • Tier (by duration) (e.g., short-term, mid-term, and long-term)
  • Industry vertical (e.g., entertainment, financial, healthcare, real estate, sports, technology, etc.)

In a world where markets are continuously being disrupted, strategic alliances serve as a lucrative means of stability. Some estimates suggest that nearly 35-percent of the revenue of the largest 1,000 companies in the United States results directly from business partnerships, yet the failure rate hovers between 60% and 70%.

How does Definitive help facilitate this process?

Definitive assists the customer in setting up a governance structure, which is particularly important in large organizations and companies. This may take the form of a partner alliance strategy council or review board comprised of cross-functional leaders and representatives.

Definitive also facilitates the organization and selection of strategic partners, which is a classic portfolio management challenge and a core competency of Definitive. This is typically handled by building one or more decision models and engaging stakeholders to leverage their experience, insights, and judgment.

Lastly, Definitive can assist with managing the program, so that the customer can answer the following questions:

  • Are the strategic partners meeting their commitments?
  • Have there been breaches of the alliance agreement?
  • Is the alliance meeting its objective?
  • Are there unacceptable risks (e.g., financial, operational, intellectual property, reputational)?

The answers to these questions should feed into a semiannual or annual portfolio review to determine which strategic alliances should be continued, re-structured, or terminated.

With our decision expertise and proven portfolio management methodology, we can help enterprises of all sizes build consensus and make the best fact-based decisions.

Example Decision Model

Collaboration

Definitive Pro™ enables the partner selection team to collaborate anytime, anywhere, using any device. By making it easier to participate, we: bring together representatives from finance, legal, human resources, marketing, and technology; promote teamwork; and improve cross-functional insight.

Prioritization

Definitive Pro™ uses the Analytic Hierarchy Process (AHP) to accurately establish the relative importance of the decision criteria, and efficiently score all candidate partners. The consistent and transparent scoring process yields greater consensus and buy-in than other approaches.

Optimization

Definitive Pro™ employs the Gurobi optimizer®, a state-of-the-art mathematical programming solver for optimizing the allocation of resources. The Gurobi optimizer can quickly identify the set of candidate partners that maximize strategic benefit, while satisfying all dependencies and constraints.

Faster and better decisions — Justifiable decision rationale — Historical record of decisions

Definitive Pro™ also powers group decision support for:

  • Budget Formulation
  • Business Opportunity Selections
  • IT Demand Management
  • Merger & Acquisition Selections
  • Organizational Cost Savings
  • Personnel Selections
  • Product and Feature Selections
  • Requirements Prioritization
  • Risk Assessments
  • Strategic Investment Selections
  • Strategy Development
  • Surveys and Audience Response
  • Vendor Selections

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