by Paul Heltzel

12 signs your strategic partnership has gone wrong

Aug 15, 201811 mins
Digital TransformationIT LeadershipIT Strategy

The most successful IT partnerships are continuously evaluated. Here's how to tell a strategic IT relationship is on the rocks — and how to get it back on track.

Organizations working through digital transformations frequently find they need an IT partner to get there. About half of the Forbes Global 2000 companies will create alliances with tech firms by 2021, according to a recent IDC study.

The IDC study predicts companies will set up partnerships and joint ventures with tech firms for software, consulting and managed services to create value through new intellectual property — and to help companies in a range of industries to create their own digital services.

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If you’re on point for developing strategic relationships, you know it doesn’t always go smoothly. Problems often start because of a lack of agreement on key objectives. Meetings become more frequent but end without results. Emails go unanswered, and conference calls are filled with excuses. Some signs of trouble may be more subtle.

Keeping the relationship healthy is an ongoing process, say experts, and the most successful partnerships are continuously evaluated.

Here are 12 signs that your once-promising alliance is headed south. And we also look at how to head off problems by clearly laying out the strategy for your partnership before it begins.

Value is hard to see

Perhaps the most worrisome — and often most obvious — issue is that your partnership isn’t creating value. The revenue just isn’t there to keep the relationship going, and the investment in time and money seems like a lost cause.

The problem here often starts at the top, says Wayne Monk, senior vice president of global alliances and channel sales at ASG Technologies. Likely when you’re in this situation, he says, senior leaders from each side of the partnership aren’t fully on board.

“This may be the lack of commitment to the market segment or the confidence the partner has to win market share with the vendor’s solution,” Monk says, “The partner may be unwilling to make the necessary marketing and sales investments to build demand and sustain successful sales cycles to acquire new opportunities.”

Goals aren’t being met 

At the outset, create a go-to-market (GTM) plan that gets sign off from higher-ups on both sides, Monk suggests. Then make sure your partner’s marketing and sales teams are working with a realistic sales and marketing strategy.

“An early sign to be on the lookout for is the willingness of the partner’s senior leadership team to define criteria for success, supported by a credible business and GTM plan,” he says. “Any resistance is a good indicator the partner may not succeed.”

After communicating the plan, any delays or lack of effort by the partner are a bad sign, Monk says. “Senior leadership must be committed to the market segment you’re jointly targeting and confident they can win and make money with you.”

Monk argues the first few months are crucial in terms of gauging performance. “If the partner’s revenue is well below the success criteria you’ve agreed on, or a new partner hasn’t won any significant business during the first four months after you’ve enabled initial sales, it’s clear time is being wasted and there’s no longer value for the business.”

Stress is starting to show

Yet another tell-tale sign appears when you notice your own team’s conversations are turning from professional to emotional. The partnership’s lack of success increases tension and starts interrupting your operations.

“This frequently comes from business stakeholders who have never understood the services relationship,” says Clay Calhoun, partner at Information Services Group (ISG). “We recommend solid relationship processes and an operating model so that there’s a logical, unemotional method to resolve problems with services or other issues, and to educate both the working teams and the business users. When there’s no defined process, less significant problems begin to loom and seem more important than they are. And we see important problems going unaddressed for months or years.”

Customers are unhappy

It’s usually not one, but several troubling signs, that suggest the partnership is beyond repair, says ISG’s Calhoun. “The contract is very specific, for example, and frequently the provider is delivering according to the contract, but the client is still not happy,” Calhoun says. “This means they need to look at their agreement and fix it as a first step. No provider is perfect — but neither are the clients managing the provider, and they need to focus on working together to resolve their challenges.”

There are no metrics for success

Fred Voccola, CEO of Kaseya argues it’s a problem if you’re not seeing key performance indicators (KPIs) that show that your partner is meeting your business objectives.

“The ultimate goal of an IT partner is to be seen as a trusted advisor,” says Voccola. “The best way to achieve this is by continuing to grow together and receiving support from that partner today and in the future. If a partner can’t provide comprehensive reporting, technical efficiency will suffer.”

Solutions serve the seller, not you

Voccola also warns against solutions that try to be all things for all people or seem to primarily serve the needs of the seller.

“IT partners who try to sell one-size-fits-all solutions aren’t thinking in your best interest and will never deliver the value you expect,” Voccola says. “No two organizations have the same IT needs, and if your partner doesn’t invest in understanding your specific requirements it defeats the purpose of hiring one in the first place. Likewise, if they try selling you products that benefit them instead of you, that’s a definite red flag.”

That said, the IDC report recommends developing building value with partners that can deliver reusable software products, services and consulting elements. The partnership can create value and create efficiency by recycling past work.

Partner dysfunction

Venky Balasubramanian, co-founder and CEO of Plivo, says it’s time to wind things down if you can’t reach your partner in a timely way that meets your business needs.

“It could be that they take a long time to respond to your questions or inquiries and, when they do, it’s in vague terms,” Balasubramanian says. He also warns that the partner’s financial worries could very quickly become yours.

“Your provider’s financial difficulties can be another tell-tale sign. Are they downsizing or experiencing a lot of turnover? If so, your business relationship has likely moved down the totem pole as they deal with their business issues at hand. A dysfunctional or misrepresented product should be the No. 1 red flag that you’re investing too much time into your relationship, and it’s wise to pull the plug before it ends up costing you more than it’s worth.”

Support is lacking

Problems getting support are a cause for concern among the execs and other tech pros who weighed in.

If their support is subpar and laden with mistakes, it could cause real damage to your business in the long run,” Balasubramanian says. “In other cases, the objectives of the partner start becoming unaligned with your organization, and that typically means they’re no longer delivering on the original value proposition you set forth.”

Payments are held up

In IT partnerships — as in other areas of life — fights are often about money. Plivo’s Balasubramanian argues that paying vendors on time goes a long way to developing trust and a relationship that will last.

“Delayed payments can be leveraged as a means to show dissatisfaction, and they end up weakening the overall relationship,” he says.

Tom Varjan, an IT marketing specialist, offers a vendor’s perspective: He says he’s found that lack of communication is soon followed by a change in payment terms. “Can you half your prices and change your terms from net 30 to net 180 — or else? The client no longer recognizes your expertise as value.”

The relationship’s scope isn’t clear

Especially when working with multiple vendors, it can be difficult to determine whether your partnership is delivering services effectively and reducing risks.

“The key to a healthy relationship with your service provider or supplier is knowing the exact details of their responsibilities and scope,” Balasubramanian says. “You need to explain your requirements clearly from the start and establish objective KPIs and service-level agreements that leave nothing open to question as your relationship progresses.”

Communication breaks down 

Melodye Mueller, vice president of marketing and strategic alliances at CloudHealth Technologies, says when it feels like you’re spending more time on your external partners and not enough on your own team, it’s another sign that things are falling apart.

“Good partnerships are the result of strong alignment across both sides and have support at multiple levels within each company,” Mueller says. “When it becomes difficult to get answers, it’s probably time to move on.”

If you’re the tech partner, Varjan says it’s a warning sign when your point of contact is downgraded. “One indicator is when the original buyer no longer has time to interact with you and relegates you to an — often unknown to you — lower-level manager,” Varjan says. “Expert latitude gets replaced with micromanagement.”

You’re spending too much time on it 

Once cracks start to appear in a partnership’s foundation, it’s natural to increase communication to resolve problems. But how much time is too much to spend working with a particular partner to solve problems?

“The effort you put into a partner relationship should be commensurate with the results you want to achieve,” Mueller says. “One-sided effort is never a good sign, and dealing with ongoing challenges probably means the partnership was not well defined at the onset.”

How to get back on track

Most of the above concerns are the result of a lack of clear focus for both partners at the start. CloudHealth’s Mueller says a mutually beneficial partnership involves a handful of seemingly simple but crucial steps.

“Define a strategic mutual vision of what success will look like for all parties involved,” she says. “Gain alignment with both companies across all departments. And, expect to work hard at making the relationship work to achieve your goals.”

The IDC report recommends “an emphasis on establishing a strong level of trust between customer, partner, and vendor. This includes service-level agreements, visibility, and transparency on operations and clear guidelines on approaches. You may also need to review and update your contracts, systems, and processes.”

If you don’t have a plan that lays out roles and processes in place, or you’re stuck with a flailing partnership you didn’t initiate, there are still ways to smooth the relationship.

“If you’re in trouble, create these management structures immediately,” says ISG’s Calhoun. “Invest in some organizational change management to reset the expectations for all of the parties. There’s a contract that governs the relationship between the client and provider, but the two sets of team members also need to work collaboratively and in a trusting structure. We see that this always needs conscious thought and design to be successful.”

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