by Barnaby Meins

Created on: May 29, 2010

The ability to form and manage strategic alliances more effectively than competitors can become an important source of competitive advantage for an organization. One of the best known ways to develop strategic alliance is by building a dedicated strategic alliance function, which is a dedicated function that coordinates all alliance-related activity within the organization. A dedicated strategic alliance function creates value by facilitating accountability, providing internal coordination and increasing external visibility.

Facilitating accountability in an alliance function can be achieved by compelling company to develop alliance metrics and to evaluate the performance of its alliances systematically. It is done by assessing, discussing and finally offering recommendation. It can resolve conflicts, provide signs of distress visible early, and with monitoring function, one can step in and intervene appropriately. 

Furthermore, a dedicated alliance function helps solve problem of inability to mobilize internal resources to support the initiative. It has organizational legitimacy to reach across divisions and functions and request the resources necessary to support the company’s alliance initiatives. When particular functions are not responsive, it can quickly elevate the issue through the organization’s hierarchy. Individuals within the alliance function develop networks of contacts throughout the organization. In short, an alliance function provides internal coordination for the organization’s strategic priorities by having a mechanism for communicating which alliance initiatives are most important to achieving the overall strategy by addressing company’s strategy-making sessions and communicating throughout the organization.

Also, an alliance function enhances the reputation of the company in the marketplace and supports the perception that alliances are adding value. It indicates to the marketplace and to its prospective partners that the company is devoted to its alliances and to dealing with them effectively. If committed, the function offers a much noticeable point of contact to select partners and the relevant internal factions when an alliance seems appealing. For example, a website is a primary means of recruiting and developing partnerships, and focus majority of its human resources on its higher-profile, more strategically important partners.

How an alliance function is organized influences its strategy and effectiveness,

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