The Value Of PartnershipsXander 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

Service Level

Agreements

Return On

Investment

Governance

Tactical/Legal/Control

RelationshipRelationship

Partnership Elements

Continuous ProcessPreferred Partnership ModelEngine Metrics (Baseline)Partnership CharterPartner ActionsWorkshop ReportImproved Relations

Detailed ReportSuggested ActionsImproved Relations

Definition Workshop

Action Management

PVMAssessment

Engine

Action Management

ReviewPartnership

Definition

0 200 400 600 800 1000

DecliningCommencing

ReasonableAverage

Financially sound, innovativeIn-depth Relationship

Partnering -Loyal

World ClassPartnership

Exit - PoorPartnership

Poor to GoodPartnership

446 Current446 CurrentBenchmarkBenchmarkAverageAverage

WorldWorldClassClassTargetTarget

GapGap

PVM Benchmark

Company 1 Company 2

SMT

Coal face

SMT versus coal face

SMT

Coal face

Partnership size independent

The more complex the relationships then the greater need for PVM

One to One One to Many Many-to-Many

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

• Win/win relationship

• Level of added value

• Level of shared objectives

• Long term commitment

• Equal share of risk and reward

• Resolution of challenges

• Sharing of knowledge and information

• Cultural fit

• Integration of partnership

• Financially profitable

• Joint control of services supplied

• Sufficient resources to ensure success

• Communication effectiveness

• Effectiveness of performance metrics

• Chances of failure of the partnership

• Dispute resolution process

• Individual roles within partnership

• Patience and tolerance

• 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