Measuring Alliance Management: continued from page 25 performs the defined range of alliance services, how do we measure the outcomes’ worth? We use these four criteria: 1. Dollar savings: Has the alliance management team helped realize specific savings or avoid certain costs? 2. Increased portfolio value: Are there key decisions or events the alliance management professional has influenced that increase the value of the organization’s portfolio? 3. Alliance health relationship surveys: Are alliance teams functioning as planned? Are relationships healthy? 4. Customer satisfaction: Are customers seeing the value provided by alliance management professionals?
FIGURE 3: VALUE IMPACTS Increased Portfolio Cost Advantage Cost Savings
100.0 Alliance B
Source: Eli Lilly and Company
Dollar Savings and Increased Portfolio Value By diligently implementing the defined range of services, alliance management professionals can implement improvements to the alliance that result in cost savings or cost avoidance. In addition, the alliance manager can influence key decisions that increase the value of the organization’s portfolio.
Alliance Health Relationship Surveys
A standard survey and health check provides an opportunity for the alliance to improve its relationships. In addition, it can be used as a diagnostic tool to understand the current state of the partnership and the perceptions the partners have of each other. It is conducted from an alliance perspective, with questions phrased to seek opinions about “our partner” and “the alliance.” Three dimensions are covered by the survey: – Strategic fit (commitment, strategy, trust/fairness) – Operational fit (communication, conflict management, decision making, leadership, performance measurement, roles, skills/competence, team coordination) – Cultural fit (flexibility, knowledge management)
The alliance management group can use customer surveys to help identify how their services are valued. Mapped directly to the spectrum of alliance services, survey categories include: – Risk identification (strategic and operational) – Execution activities (governance implementation) – Managing conflict – Responding to significant business and legal events – Problem management and resolution Quarter 3, 2011
After data specific to each alliance are gathered, the results of these metrics are delivered to business partners each quarter. This process provides an excellent feedback mechanism, enabling us to adjust our level of service to best meet our clients’ needs.
To evolve and achieve the goal of demonstrating value, alliance management groups must define their range of services and deliver those services effectively. By focusing on active alliance execution, the strategic influence of decision-making processes, and heavy problem-solving involvement, alliance professionals can contribute to the overall value of their organizations. And while risk mitigation, governance implementation, and problem solving often require very different approaches, this ongoing range of engagement gives alliance managers the opportunity to truly understand the partnership, enabling them to resolve key issues and influence corporate policy and strategic decision making. This in turn generates the measurable benefits provided by a strong alliance management function: dollar savings, increased portfolio value, healthy alliance relationships, and satisfied customers. n David S. Thompson, CA-AM Chief Alliance Officer, Eli Lilly and Company. Thompson has played a key role in many major alliances at Lilly, working with Boehringer Ingelheim (duloxetine in 2002 and diabetes in 2011), Amylin, and Daiichi Sankyo. His involvement begins during the due diligence process and continues throughout each alliance’s lifecycle. Steven E. Twait, CSAP Director, Alliance Management and M&A Integration, Eli Lilly and Company. With responsibility for M&A integration as well as alliance management for development, commercial, and manufacturing alliances, Twait leads teams focused on maximizing the value of partnered assets at each stage of the development cycle. His experience also includes the post-acquisition integration of ImClone Systems, Alnara Pharmaceuticals, and Avid Radiopharmaceuticals. Kim R. Fill, CSAP Manager, Alliance Management, Eli Lilly and Company. With a concentration on development alliances in oncology and biomedicines, Fill leads teams that maximize the value of partnered assets at each stage of their lifecycle. In 17 years of solution delivery experience (business process, system design/implementation, change transformation), Fill has worked with clients in a variety of industries, including defense, finance/pension, commercial retail, information technology, research, and pharma. She has played an integral role in delivering significant new business solutions with complexities involving external customers, geographical locations, multiple business functions, quality regulations, and new technologies that have required her to transform the way her customers work, think, and behave. 53
Non ASAP Member Limited Edition, Q3, 2011