IDC Names IBM's Strategic Alliance Program as a Best Practice in Concept and Implementation

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SOMERS, NY - 26 Nov 2001: IDC has released a report establishing IBM's strategic alliance program as a best practice leader in alliance management infrastructure. Since its establishment two years ago, the alliance strategy has generated $3 billion revenue for IBM. In its last financial period (Q3 FY01), IBM reported the program contributed $1 billion, up from $1 billion in the first half of 2001 and $750 million in the program's initial year of operation.

The IDC report, ("IBM's Alliance Infrastructure: Closing the Gap Between Planning and Execution") highlights IBM's alliance program as successful in both inception and execution. Central to IDC's study of the program was the "One-IBM" approach. This initiative allows ISVs to work through one point of contact within IBM's strategic alliance team as opposed to navigating through several relationships with representatives from different divisions.

The report revealed that IBM's success is the result of individual alliances being managed like stand-alone businesses. Clear revenue targets, marketing objectives and division of responsibilities are established with the alliance partners. Additionally, IDC believes that a key ingredient in IBM's execution strategy is to invest in people, processes and procedures coupled with clear gateposts that each relationship must move through.

IBM's strategic alliances target industries such as financial services, retail, manufacturing, and solution segments including enterprise resource planning, supply chain management, customer relationship management and business intelligence. The goal is to provide developers with access to new customers and revenue opportunities through IBM's marketing, sales and solutions resources. Developers commit to lead with IBM's middleware, server platforms, and services. IBM currently has 72 agreements within its strategic alliance program.

IDC research reveals that one of the most important lessons learned by alliance managers over the past 18 months is the need for better management and more process. Companies are realizing that in order for alliances to achieve agreement objectives, companies require investments in planning, processes and ultimately, the people accountable for these relationships. According to IDC's report, IBM is a clear example of a company that has invested in creating a solid alliance management infrastructure focused on execution and measurable results.

IBM regards the development of its internal alliance management infrastructure as both a 'knowledge asset' and competitive advantage. The individual experience, people management processes, planning rules, stability of management infrastructure, streamlined engagement principles and philosophy of accountability allow for speedier execution. The quicker an alliance agreement can be executed, the quicker the time to profitability for both parties, and the better the service to customers.

"While companies have little difficulty identifying likely partners, most alliances fail during the execution phase. This is where IBM has invested and excelled," said Nicole Gallant, Senior Analyst, Software Strategic Alliances, at IDC. "IBM's management of its strategic alliance initiative has clearly gained revenue for the company due not only to the team's careful planning, but successful execution. IBM does its homework, details a business plan and regularly involves senior executives to drive progress."

The alliance team at IBM structurally fits into the Developer Relations Group, which manages the ISV relationships that run across the company. The objective of the alliance team has been to create an alliances culture within the existing organizational structure. It engages and brokers the different interests across IBM. The Group has three main functions; Program Operations (managing the day-to-day performance of the ISV alliance); Sales Operations (the lead and closure of sales opportunities); and Business Operations (ongoing communication with senior IBM executives regarding alliance performance).

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