The creation of a strategic sales alliance between companies – whether large global corporations or small innovative start up – is an incredibly attractive proposition fraught with difficulty. Atos Origin’s Derek Ward describes the appeal:

“With the right partnership everyone can win. The client gets the best solution at a competitive price. The partners can share costs and customer contacts and ultimately increase sales. If you can gear other people’s sales force to sell for you, then you can realise your numbers a lot easier than if you tried to do it all yourself.”

The attraction for small companies to form an alliance with a large corporate is clear; however this is not a simple solution. Richard Griffith, co-founder of Channel Dynamics - a company which provide strategic business management advice to clients - outlines a common difficulty:

“Often we work on projects with small companies to look at how they can convince a large corporate to take their product to market. It can sometimes seem as if they don’t have the capability or capacity to do this independently and so look to the corporate for a quick fix rather than taking responsibility themselves.”

Ward agrees that it is simplistic for a small company to view an alliance as an effortless answer to all of their sales problems, and provides some insight into the frustration corporates are faced with:

“Everyone comes to the party with a slightly different agenda, with small companies thinking we have the magic key that will unlock the world for them - they can see retirement coming through a sell-out and flotation and of course get disappointed when that doesn’t happen. Equally the large customers find that the fantastic innovation sold to them by the small company is actually not as robust and resilient as it seemed, so we are left wondering how on earth it can be embedded in our technology stack.”

So how does a small technology company with a strong piece of technology build a relationship with a Tier 1 company? Griffith feels that the key to success is in the preparation:

“If you can structure your proposition taking into account matters such as the corporate’s time to market, how their current product offering is shaped and then highlight how you can mutually add value to each other, then you have a compelling pitch. It is important to research your potential alliance partner’s goals, and align your proposition to match this – the small company has to do the hard work and provide the intelligence which will generate enough enthusiasm to continue the conversation.”

This level of preparation is vitally important for a small company in securing an alliance with a major corporate, as is shown through Ward highlighting the difference between an alliance of equals, and how a small company must approach agreements:

“At Atos Origin we have some very successful large scale alliances – including SAP, Oracle, Microsoft, IBM and HP as examples. These are founded on the huge amount of business that we do with each other, and both sides can afford to throw a lot of money at an alliance to make it work. Once you drop out of the “mega league”, and get to the more one-sided investment of a “David and Goliath” situation the corporates can’t justify this level of expenditure for all potential candidates. Here I think that the best advice I can give you is not to overestimate the sophistication of the large company that you wish to target. Ultimately it is just a series of individuals with specific jobs to do. So throwing brochures at them doesn’t work, instead talk to the right people regarding a specific opportunity if you think that you have something to help us achieve us our objectives. Track down the person who has the most interest in seeing that programme be successful, and then target them with a very specific, very short message along the lines of ‘We know you’re doing this. We know you’re doing that – our product will help you achieve this because....’”

Over recent years, Ward has seen a major change in the world of alliances. “The traditional alliance has been seen as one that would come together with a joint go-to-market proposition. But now there's another borne out of one party understanding that they don’t have all the capability themselves and having to find a partner to come and help deliver”.

Channel Dynamics also highlights the recent work which is being done to put a mature structure around collaborative business relationships to help create and maintain successful business-to-business collaborations. Tim Barnsley, Channel Dynamics co-founder explains one such innovation, PAS 11000:

“PAS 11000 is a Publicly Available British Standard concerning collaborative relationship management, which is due to go live next year. It will be cross industry, and will lay out some best practice principals regarding how organisations should work together, define the customer-vendor's relationship and how to manage valuable business relationships within the supply chain. In the fullness of time it will be refined for individual industries and will highlight how we can become smarter and more professional.”

Griffith points to ASAPTech (the Channel Dynamics founded Association of Strategic Alliance Professionals) as another important driver of change:

“ASAPTech positively influences the ability of a partner manager to articulate his case more powerfully within and across his organisation and the more people that can do that, the more these people network among themselves the more powerful the possibility of partner.”

Ward also feels that the UK technology industry group Intellect is doing more for the Alliances sector that just providing a networking forum:

“With Intellect’s help Atos Origin has worked together with our competitors in order to try to make things more efficient, especially in the public sector. We have created a standard form contract, although trying to get this rolled out across government is challenging. It has enabled us to have commonsense conversations with our major customers.”

The final piece of advice which Ward has to offer for all companies seeking an alliance, whether small or large, is as simple as it is critical:

“One of the mistakes often made is to forget the customer. At Atos Origin we always adopt a Client First approach and, in our experience, if you can bring the customer into the alliance then that’s very powerful. A good example is the Government Gateway which Atos Origin delivers with Microsoft as a partner. We want this to be adopted as the common authentication service across government, and through initially bringing the Cabinet Office on board as our champion, this has now been adopted by HMRC, the Department of Work and Pensions and many other central and local government organizations. Always remember that alliances essentially rely on the people involved, including your customers. An Alliance Manager gets out of bed because he enjoys his job and he wants to make it work, and with all of the best practice in the world that’s difficult if the person on the other side of the relationship is someone you don’t get on with. So never underplay the human element.”