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Strategic Partnerships May Be Your Most Important
Find the right partners to thrive in an economic recession.
Posted Dec 17, 2009
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In today's economy the pressure to cut costs and streamline the enterprise is more intense and compelling than ever before — it's also more difficult.

After years of budgetary crash dieting inspired by the "lean thinking" school of business, some global technology companies may feel they've already cut costs to the bone. But in the face of a prolonged economic downturn, technology companies know they must continue to streamline, without compromising their ability to deliver a great service experience, which is always the foundation of financial performance.

Global technology firms are right to be intently focused on the customer experience. Recent research by Convergys shows that 20 percent of customers served by global technology companies leave after a single bad experience. While those numbers are good compared to some sectors that are experiencing 40 percent attrition, a 1-in-5 loss rate is still worrisome. In today's economy every customer — and his or her longterm contribution to revenue and profits — is a business's top priority.

Knowing Core Versus Contextual Activities

The goals of streamlining business, delivering quality service, and growing revenue are not mutually exclusive. To achieve all three, technology companies must rethink business activities once viewed as "core," and consider whether they're really "contextual." In other words, is the business activity supportive of bedrock business functions? In this economy, technology companies must focus on what they do best and find partners to outsource the rest.

Areas ripe for repositioning as contextual activities are:

  • sales management;
  • complex technical support; and
  • global customer service delivery.

Global technology companies can streamline by outsourcing these areas to strategic partners. Not surprisingly, expert partners that specialize in these activities often deliver stronger performances.

Benefits of Partnering

Strategic partners add value in several ways by:

  • creating an outside-in view of service. Partners collect customer data using traditional surveys and new approaches such as voice analytics to develop programs that let customers access service in the ways they prefer, whether it's through the Web, an agent, or self-service. This customer-based or "outside-in" approach empowers a technology company to deliver a superior service experience that is tailored and personalized to each customer.
  • ensuring quality, whatever the load. Tech companies are in the business of continuous innovation. But that goal can put a strain on service and technical support. When innovation pushes new and unfamiliar roles, day-in and day-out, often the phones never stop ringing. Average incident volume continues to increase year over year. By leveraging a strategic partner for service and technical support, the organization can ensure the timeliness and quality of every customer interaction.
  • driving up revenue. The partner's job doesn't stop with service or technical support. The right partner can help technology companies sell and renew maintenance agreements that might otherwise fall through the cracks, enabling deeper understanding of these areas.

How to Pick a Partner

So...how do you find the right strategic partner? Consider how each candidate measures up to these requirements:

  • Up front return on investment (ROI): Technology and services with an easily measured ROI are a must. If a proven track record for results is not available, look at a different partner — this is not the time to help a fledgling provider learn your business.
  • Flexibility is key: Demand flexible, scalable, and fast-to-go-live solutions. As 2010 approaches, technology companies may need to make sudden shifts in response to changing market conditions. Service partners must be adaptable to rapid market shifts.
  • High quality, high value: When working with a strategic partner, quality and value will be more important than ever. Low-quality and low-price outsourcing contracts will not succeed in this economic environment.

Making Partnerships Work

To maximize the value of strategic partnerships, companies must encourage collaboration and create a shared vision for success. Top tips on making your strategic partnership work:

  • Involve partners in strategic planning: Great partners can share the expertise they gain from working with multiple companies and industries. Involve them in conversations on best practice processes such as: incident handling, talent management, industry trends, enabling technology, and strategic planning. Be sure to provide access to information needed to fuel their innovation.
  • Be involved and visible: Company executives, product experts, and team leaders must educate partners on the corporate culture and increase alignment with a partner's employees by making frequent visits to partner operations.
  • You get what you pay for: Selecting service providers based on the lowest transaction price nearly always damages longterm customer profitability. Technology companies that opt for a low-ball bid can pay the ultimate price. Through social networking, discussion forums, and online product reviews, customers now have new ways to express their disapproval with far-reaching impact.
  • Offer cross-enterprise visibility: Include outsourced employees in company announcements, user events, brainstorming sessions, and meetings to report on progress.

About the Author

Mike Serpan (mike.serpan@convergys.com) is vice president of program management for technology clients at Cincinnati-based Convergys, a relationship management company. 

Please note that the Viewpoints listed in CRM magazine and appearing on destinationCRM.com represent the perspective of the authors, and not necessarily those of the magazine or its editors. You may leave a public comment regarding this article by clicking on "Comments" at the top.
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For the rest of the December 2009 issue of CRM magazine please click here.

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To contact the editors, please email editor@destinationCRM.com
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