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The Value Of Partnerships Xander Leijnse The Customer Connection, Utrecht, April 2006 Background • Unisys “voice of the customer” project, UK – 2001 • 3rd party interviewed senior personnel from major accounts • ALL 68 respondents mentioned “partnership” in one way or another • Most RFP’s contain references to partnership What then? • We found there was quite some “partnership confusion” • We had little real knowledge of what “partnership” means • Research indicated there is not much available to help understand and develop “partnership” • So we created PVM to address this opportunity Partnership Elements Partnership Service Level Agreements Relationship Tactical/Legal/Control Governance Return On Investment Continuous Process Preferred Partnership Model Engine Metrics (Baseline) Partnership Charter Partner Actions Workshop Report Improved Relations Definition Workshop Review Partnership Definition Action Management Action Management PVM Assessment Engine Detailed Report Suggested Actions Improved Relations PVM Benchmark Exit - Poor Partnership Poor to Good Partnership Partnering Loyal World Class Partnership Declining Reasonable Financially sound, innovative Commencing Average In-depth Relationship 0 200 400 446 Current Benchmark Average 600 Gap 800 World Class Target 1000 SMT versus coal face Company 1 Company 2 SMT SMT Coal face Coal face Partnership size independent One to One One to Many Many-to-Many The more complex the relationships then the greater need for PVM PVM Credentials • Academic credentials – Cranfield University – Manchester Business School • Unisys Customers - examples – – – – Merrill Lynch Europe Royal & Sun Alliance (Phoenix) Lloyds of London London Borough of Harrow • Unisys Partners - examples – Microsoft Belgium – Microsoft UK – EMC Case Study - situation • Large Investment Bank – Unisys holds Outsourcing contract to deliver “managed services” (help desk, desk top support etc.) – 25.000 seats • Key reasons we won initial contract: – ROI – Solve IT problem • Success? – All SLA measures green • Customer unhappy! – Openly talking about leaving • Addressed through Partnership Value Model Case Study – Mine field vs Mind meld • Unisys perception • We delivered operational excellence • Excellent governance system • Customer perception • Expectations not met • Not happy with performance • Question “What Partnership did we both expect/need?” – Strategic Value not understood • Whatever happened to importance of ROI? – Relationship Elements not at all addressed • Annual “do you love us” survey • Still - Customer / Supplier, not Partner / Partner – Tactical Elements over addressed • What is measured is being done Areas to address in PVM • Level of Trust • Financially profitable • Win/win relationship • Joint control of services supplied • Level of added value • Sufficient resources to ensure success • Level of shared objectives • Long term commitment • Equal share of risk and reward • Resolution of challenges • Sharing of knowledge and information • Communication effectiveness • Effectiveness of performance metrics • Chances of failure of the partnership • Dispute resolution process • Individual roles within partnership • Cultural fit • Patience and tolerance • Integration of partnership • Joint innovation and financial gain Benefits • Strategic Benefits – – – – – Definition of clear strategy that defines aims, objectives and long-term goals An improved return on investment Risk reduction Joint innovation Continual focus on business process improvement • Financial Benefits – Clear, measurable value for money benefits – Continual effort at cost reduction and/or value improvement • Working Together – – – – – – – Fewer crises Trust Better end to end communications Continuity – people changes have less impact Full, candid, frequent and open communication between all parties Effective mechanism for dispute resolution An exit strategy And finally • Comments • Questions • Thank you