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Partners.com: How to Profit from the New DNA of Business
by Michael J. Cunningham

Partnerships existed years before the Internet came along. Why all the focus on partnerships now?

Partnerships have always been important to organizations, but the need to create organizations that have flexibility and speed to deal with changing market conditions has driven organizations to look outside for help. I believe the ability to partner will become a strategic advantage.

Many companies are looking for ways to improve efficiency inside their operations, and effective partnerships are one way of making it happen. Businesses have spent millions on customer relationship management systems; now they are now turning to their partner relationships for the next level of efficiencies in their business model. Internet-based technology lets organizations qualify potential partners and create measurement and management tools.

How do decision makers view the topic of partnerships and the emerging technologies that support them?

Confusion abounds in the market today. Partnership is a very broad topic, and an enterprise activity. Most individuals understand one aspect of the partnership topic, but have difficulty with the impact in other parts of the organization. This often makes it difficult to achieve success, as even the smallest partnerships cause the organization to change dramatically to gain the best effect.

The technology components are still a mystery to many, I have tried to put them in context in the book, so it is obvious where they are and are not relevant to solving a problem.

How much is cost cutting impacting the decision to partner?

I believe that it will continue to be an important factor, but it is also linked to an unrelenting trend for organizations to support and concentrate on their core competencies. One way to avoid organizations spending time and money where they are least qualified is to partner with companies that can provide those services, but on an as needed basis. This flexibility lets operations meet customer and partner needs without having a huge overhead.

Business exchanges appear to be dying on the vine. Is this type of partner exchange dead?

No, and they will flourish in the future. Many brick and mortar operations may be rejoicing in the demise of some of these exchanges, but the reality is exchanges that provide a valuable function for the consumer or the partner will continue to do well. The completion of a $3 billion auction on the COVINST exchange and Altraıs $12 billion in transactions in 2000 all point to success in the model. Exchanges that provide a valuable business function that is sustainable will prosper, those that do not will die a rapid death.

You called the book Partners.com. Does it also address partnerships in a brick and mortar company?

The book is targeted to companies, consultants, professionals, technologists, and business managers who are looking for ways to solve problems in partnerships and the supporting technologies. Whether a company is solely a brick-and-mortar entity, a Web-only firm, or both, Internet technologies are core competencies for enabling efficient partnerships. So, both business and technology issues are interwoven.

Donıt forget that a companyıs most important partner of all is its staff, which I discuss in the book. I also show how any organization can use partnerships for distribution, development, sales, and self-service applications. The Internet and collaborative commerce are prerequisites for improving the way an organization operates. Partners.com focus on how this applies to partnerships.

How do most organizations manage their partner relationships?

Unfortunately, badly. Many operations do not really profile the value proposition for the partner or allow for value-adds on both sides. These one-sided relationships go nowhere fast, which breeds dissatisfaction at best and lawsuits at worst. Effective partnerships have to be measured and managed if they are to work well.

What benefits can a company expect if they adopt an effective partnership strategy? How can it help them become more profitable?

Organizations that have successfully embraced partnership are placing themselves in a position of flexibility for their future. Many organizations can expect to reduce their cost of sales, expand their market position, reduce support costs, cut transaction costs, eliminate unwanted processes, and improve shareholder value. As partnerships affect the enterprise, many improvements are based more on the appetite for change and the ability of the organization to change the way they are operating with their partners.

A culture of change and flexibility is critical for rapid success in these situations. This is why many organizations have set up separate operations unencumbered by old world business rules, policies and timeframes.

Organizations become more profitable with partners by using them as a means to change or improve existing business processes and activities. Reducing the number of steps, the cost associated with them, the amount of time, and the intensity of transactions will produce results that allow business to do more for less. It will be the way that firms can scale the cost of acquiring and maintaining new clients, and servicing them more effectively.

The book provides a framework for the major elements that impact the development and implementation of partnership systems, along with examples of what has worked and what hasnıt.

About Michael J. Cunningham:

Michael J. Cunningham is the founder and CEO of Massachusetts-based Harvard Computing Group, an international business and technology consulting firm. He is an international speaker and regularly writes articles on Web business and e-commerce. He is author of B2B (Perseus Books, 2000) and Smart Things to Know About E-Commerce (Perseus Books, 2000). His latest book, Partners.com, will be published in June 2001 by Perseus Books. He is a contributing writer with a bimonthly column for E-business Advisor. You can reach him at mcunningham@harvardcomputing.com . [ More Info ]