Article written by Valentin Kuzmenko, CCO at Andersen
Business growth isn’t just about working harder—it’s about working smarter. An effective way companies can scale, innovate, and navigate economic uncertainties is by forging strategic partnerships. As the saying goes, alone you go quickly, together you go far. By aligning with businesses that offer complementary strengths—whether through technology, expertise, or market access—companies can accelerate expansion while minimising risks.
Understanding the concept of strategic partnerships, with essential statistics
A strategic partnership is a formal arrangement between two parties (in the case of a bilateral alliance) or more (for a network form), where they commit to extended collaboration. This agreement involves the exchange of finances, expertise, knowledge, and other resources to achieve mutual objectives.
Companies leveraging such collaborations for innovation have a higher chance of achieving sustained success. What’s more, businesses actively developing them scale at twice the rate of those that are not.
By tapping into partnerships, companies gain flexibility and better meet customer demands. This trend is especially evident in the technology sector, where collaboration in research and product development leads to superior solutions.
Data from HubSpot’s report underscores the significance of such alliances. It revealed that 65% of organisations consider partnerships crucial to their future expansion, while 50% generate at least 26% of their revenue through partner collaborations. Additionally, 77% of surveyed companies have technology partners, making tech partnerships the highest-ranked collaboration type.
A standout example of successful partnership-driven growth is Microsoft. In Q2 of 2019, it reported $32 billion in revenue, with an impressive 95% stemming from its partner ecosystem. During this period, the giant was actively shifting from a simple reseller model to a deeper, more integrated partnership approach—one where Microsoft and its partners would co-develop and co-sell technological solutions, fostering long-term mutual success.
Perks of building tech partnerships
Entering into technological partnerships offers the following significant advantages to parties:
Driving innovation through collaboration
No company can excel in every area. When companies attempt to expand into an unfamiliar field, they often face challenges related to research, development, marketing, and recruitment, all of which require substantial time and investment. Worse yet, there’s no guarantee that the market will embrace their new offerings. By forming strategic tech alliances, businesses can stay focused on their core expertise while leveraging their partners’ strengths.
Enhancing the user experience
Moreover, tech partnerships often bring together complementary products that enhance user experiences. An outstanding example is the integration between SaaS solutions like Zendesk Support and Slack, which empowers teams to deliver seamless and efficient customer service. Another example is Andersen collaborating with EVITA to enhance its web portal’s performance, security, and usability. By leveraging Andersen’s technological capabilities, EVITA has strengthened its digital infrastructure, expanding patients’ access to vital healthcare information.
Expanding market reach
Beyond innovation, partnerships also open doors to new customer segments, expanding a company’s potential market reach. Take Microsoft’s much-discussed collaboration with NVIDIA, for instance. Together, they managed to enhance AI capabilities, delivering greater value to consumers through leading-edge solutions.
Strengthening trust and customer loyalty
Last but not least, trust plays a crucial role in consumer decision-making. Aligning with reputable companies in the industry builds credibility and strengthens brand recognition and customer loyalty beyond what an individual company could achieve alone.
How to build a strong partnership: a step-by-step guide
All thriving collaborations are based on a solid foundation. Below is a roadmap of seven simple steps for forming and developing such a partnership:
Step #1. Identifying an ideal candidate for a mutually beneficial alliance
It all starts with pinpointing potential allies who would complement your solutions and target similar customer needs. Surveys, interviews, and data analysis will help you outline your customers’ needs. Look for companies whose products align with yours but do not directly compete with them.
Step #2. Ensuring the collaboration is mutually beneficial
It’s essential that both companies contribute to each other’s goals, whether revenue growth or enhanced customer value, seeing that their cooperation is mutually advantageous.
Step #3. Collecting customer feedback at an early stage
Suppose the parties are developing a new product. In that case, it’s recommended that they create a minimum viable product (MVP) first and involve customers from each party to test it and share actionable insights.
Step #4. Laying a groundwork
From the outset, all key stakeholders must align on desired outcomes and the progress of work. You can avoid any misunderstandings through streamlined communication. At Andersen, we regularly send emails with updates to our partners, review milestones, draw up comprehensive reports, and track progress in Jira and Trello.
Step #5. Strengthening the cooperation
Make time for social interactions, keep all parties informed, and respect each other’s strengths and motivations. For example, sales managers at Andersen make dozens of trips each month to visit our partners and discuss their vision. Building trust and understanding each partner’s culture and capabilities will result in a more resilient collaboration.
Step #6. Having well-defined KPIs in place
Tracking the progress of joint work is crucial. Setting measurable goals and KPIs helps each party evaluate the partnership’s effectiveness. For the sales department, some vital KPIs are customer acquisition and lead conversion rates, sales cycle time, customer retention and satisfaction, market penetration, and more. These KPIs are used to fine-tune the strategies in order that the parties continue to effectively work towards the common goals.
Step #7. Being flexible and adaptable
Market conditions change and new products emerge. By staying flexible and adaptable, you’ll be able to adroitly tackle these challenges and seize new opportunities.
Managing difficulties in strategic collaborations
Even well-thought-out collaboration strategies can fail. According to McKinsey & Company, the most common reasons are shifts in priorities, inefficient management, misalignment of goals and objectives, and failure to evolve with changes in the market. Businesses that fail to reassess their approaches and adjust to circumstances will be left behind.
Miscommunication is still one of the biggest difficulties in any kind of relationship, including business partnerships. Most partnerships are hindered by uncertainty that the lack of communication brings. To avoid this, parties should establish specific mechanisms of communication, choose specific individuals as their points of contact, and set up routine meetings to discuss the progress of work.
Final thoughts
Strategic collaborations are fundamental to sustainable business growth, enabling companies to build on their strengths and seize valuable opportunities. Effective collaborations help trim costs, reduce risks, and give a competitive edge. Perhaps the most significant benefit is the possibility for companies to grow, develop, and meet goals that would have been impossible to achieve on their own.
Industries change, customer needs change, and competition intensifies. One thing is clear: companies that build strong relationships are capable of effectively developing breakthrough solutions and creating greater value for customers.
