authorization in one line of business. In addition, public relations must communicate to the marketplace about the alliance.
IT should also consider the other company, determining if it has experience with alliances or is subject to any special or sensitive issues. Different alliances have contracts with different requirements and success factors. Although work on the contract might be time -consuming and take attention from current work, knowing the terms of the agreement will be invaluable later on.
Due diligence work is typically required before a deal is signed. Companies look favorably on IT managers who offer to complete the IT due diligence section. In addition, IT managers might thereby meet counterparts with whom they will work during the alliance project. Examples of due diligence areas include the company background, terminology, competitors, types and volumes of data to share, timeliness of communications, and data definitions. Some industries have common file sharing formats and data definitions that can quickly bridge the data definition knowledge gap.
The due diligence process also involves clearly identifying the methods of data transfer, communication, and security between the alliance partners. It is important for the data to move smoothly, and that it be protected at all times. IT should not make assumptions about the communications hardware and software in the other organization. Furthermore, the organizations want to prepare beforehand, rather than straightening out incompatibilities while trying to process the data. The latter will not only cause frustration on both sides of the transactions, but can become critical if the difficulties involve the alliance’
s customers.
The organization’
s financial investment in the alliance project can reveal the critic ality of the alliance. The importance can be gauged by comparing the project budget to the corporate budget, or the revenue projections to the corporate total.
In general, larger alliances can support more investment in infrastructure up front to set up the alliance. Smaller alliances must move quickly to prove themselves, in order to justify additional investment in infrastructure. Even in developing a shorter-term solution, however, it will still benefit IT to build a solution that can be built upon, rather than thrown away or replaced.
CORPORATE CULTURE
All companies have their own corporate culture, which can be as diverse as two multinational companies or as similar as two mutual insurance companies. No matter how similar or different the alliant entities appear to be, it is critical to assess the cultures of both. Easy factors to understand and compare include general work hours and time zones, experiences with cross-site teams, and teleconference etiquette for newer team members. More difficult, critical items include:
§ How the internal IT shops operate
§ How the other company’
s business and IT units get along
§ How work is prioritized
§ How priority conflicts get resolved
The relationship between the human resources (HR) and IT areas could seriously affect an alliance project. Because IT staff is critical to many alliances, it is important for the organizations to retain the current knowledgeable staff, who understand the systems and can create transition processing. If IT staff members do not find it valuable to remain, they might leave at the first opportunity. Therefore, organizations should develop “stay” bonus packages, which will likely be different for IT than those of other staff members. It is important to have an HR area that understands the IT environment and can help in developing these packages.
The two IT cultures will likely have different organizational structures and processes.
For example, large companies operate very differently than smaller companies in decision- making abilities and the formality of communications. Other factors that IT
should consider include: whether there are formal project management or systems development methodologies, the standard desktop configuration and software available to share information, and how voice and e-mail are used internally and over the Internet.
Vendor relationships within each of the IT organizations will also affect alliance efforts. Larger companies usually have more influence in vendor negotiations, whereas smaller companies must often accept the pricing as presented.
In addition to potential third-party factors, different releases of the same software can cause incompatibilities that must be resolved. It is critical to analyze software package-by-package to make sure the packages are compatible where necessary, and to develop a vendor negotiation strategy.
Companies also have different products and vendors fulfilling the same functionality.
Again, it is critical to walk through each situation, identifying the necessary course of action. Sometimes, different packages can communicate with other similar packages and no additional action is needed.
Early on in an alliance process, often before the contract is signed, the IT front-line staff members must start working together to define the detailed requirements. Each company has its own cultural way of working through issues. For example, some cultures tightly control communications and decision delegation, while others let staff members make decisions and be accountable for them. It is important to identify processes and lead people in order to quickly address any conflict. If the respective IT and business areas do not get along, the alliance will be more challenging.
A company’
s culture is developed over time, and is often held sacred — for both old companies and new start-ups. Assessing and understanding an alliant company’
s
cultures up front can help IT understand how it operates and quickly work through issues.
DEVELOPING AN IT ALLIANCE STRATEGY
When IT is supporting a strategic alliance, it must take the time to plan. The time spent up front will be well worth it, ensuring that all parties are clear on the needs and desired results. A thorough project management methodology is critical to success and to compress the overall timeline. In particular, IT should:
§ Understand the business area’
s strategy and objectives for the alliance: This
includes reading the strategic alliance contract, charter, and other documentation. It is also important to meet with the project manager, and potentially the sponsor, to start building the relationship and to discuss the critical success factors. Once the overall objectives are understood, they should not change going forward. It is important to stay on top of changes in lesser objectives.
§ Understand the other company’
s objectives in the alliance: If the objectives of
the two companies are congruent, both will work toward a common goal. If the objectives are not complementary, conflict may arise. Although the overall objectives may be the same, there may be legitimate but different subobjectives. It is important to take the time to understand and agree upon all the objectives, clarifying and resolving all issues.
§ Get to know the other company’
s IT area, culture, and processes:
Understanding how the other company operates will be important in working through issues that arise. Up-front knowledge of the other company’
s
decision- makers, as well as its processes for setting priorities and change management, will speed conflict resolution.
§ Develop a project plan in conjunction with the business areas: With the overall plan established, the IT portion must be detailed. Both business and IT
representatives should develop and walk through the IT plan, for understanding and clarification. It is key to define the roles and responsibilities for each company, as well as for the business and IT players.
The project manager must be informed if the implementation timelines change from the initial to the detailed plan.
§ Execute and monitor the plan, making changes as necessary: Once the project plan is initially established, it must be tracked. To do so, the steering committee and front-line team should hold regular meetings, documenting and communicating the content of the meetings, as well as decisions to be made. When changes are identified, a formal change management process is necessary to communicate the effects to all interested parties.
§ Follow up with lessons learned: This process can be undertaken during the project at appropriate phases, or, as is typical, after the project is over. The facilitated session is an open discussion to document the project’
s positive
aspects and potential improvements. This is where the organization learns and grows by clearing the air and setting expectations for improvements going forward.
§ Create a c hecklist for future alliances: Since the organization will be entering into more alliances, it can learn from its experiences by developing a checklist of the necessary steps, illustrating what worked well, as well as the pitfalls to avoid. This checklist can be used as a starting point for the next alliance, although there will be changes, additions, or items that may not apply going forward.
The Detailed Plan
The most difficult part of the process is to develop the detailed plan, possibly because there might be a gap between the business’
s initial expectations of the
alliance and what can really get accomplished at a detailed level. The project plan includes scope, timeline, and resources. While project managers cannot dictate all three, they should be able to determine at least one. Of course, even if the scope and timeline are set, IT cannot always accomplish the objectives by adding more resources to the project. No matter how many resources are available, some processes cannot be completed more quickly.