Playing to your strengths: Identifying the right strategic partners to enhance your offering

With the competitive and regulatory landscape continually challenging financial service providers, particularly within the superannuation industry, to deliver more value in a compliant way for their clients, it is near impossible to be good at every key capability to have a viable and competitive proposition in the marketplace. 

To continually enhance superannuation service offerings we are seeing more financial service providers partner strategically with organisations to complement their internal capabilities where their strengths lie.  

Navigating well through the complexity and detailed processes required to identify, assess, select and implement strategic partners is where experience matters and an area that Entregar Partners has helped its clients avoid some of the common pitfalls having walked this path before.  

Identify  

When identifying strategic partners it can be difficult to decipher where to start and to have the right pieces of the puzzle in place.  Being clear on your overall sourcing plan is critical.   

Articulating the services you are after: Be clear and aligned internally about the problem you are collectively trying to solve and ultimately what you are trying to achieve through seeking a strategic partner – understand ‘what does success look like?’ 

Multiple strategic partners in the race:  Understanding who and what is out there is key. Often when you start to engage with potential strategic partners, you learn more about the services offered by each (and they may offer more – or less -  than you expect),  that can help you to begin to compare their offering with others. 

Assess  

Once you have identified a list of potential strategic partners, delving into the detail of each is critical, particularly as you are assessing the right strategic fit but more importantly the capability required to achieve the outcomes you are after. 

Fit for purpose RFI & RFP: A clear process and set of questions that aligns to your requirements is key to ensuring the insight into each potential strategic partner is enough for them to demonstrate the capability you need to see. Knowing the questions to ask, beyond the standard set, will pay back in medium to long term. 

Live demonstrations: Certainty comes from a ‘trust but verify’ approach.  If there is key functionality, controls or services that are important to you, then ensure you see them work in a live environment.  The demonstration of compliant, fit for purpose and integrated solutions is essential to be confident when performing due diligence. 

Clear internal accountability: Having the right levels of delegation, capability and authority within your organisation when assessing potential strategic partners will help reach outcomes faster.  Often with a lack of capability and clarity of decision rights, strategic partners aren’t challenged enough through the assess stage and therefore executives can’t get comfort that there has been enough vendor capability demonstrated to make a choice with confidence. 

Select  

Selecting a strategic partner is a key outcome and milestone for any organisation stepping through this process.  The detailed due diligence that occurs at the identify and assess stages provides a good platform for selecting a suitable partner. 

Genuine partnerships: Although difficult to design a set-of due diligence questions to draw this out, along the assess stage it’s important to get a sense of whether your organisation can work with the strategic partner and if there is true cultural alignment.  Being aligned culturally and strategically can often help reach an outcome at the select stage. 

Contract negotiations: As part of fostering strong relationships, ideally the contract that is struck is balanced and ensures both parties are in a position where it is fair and equitable though enough tension in it to encourage innovation, growth and sustainability together. 

Updating the business case: It is often at this stage the most is known about the strategic partner and firmer terms; conditions and pricing are known.  Re-visiting and adjusting the business case will happen multiple times along the way though this may be your last iteration before a final choice is made. 

Implement  

Finally, the implement stage is where the rubber hits the road and everything that has been discussed and agreed begins to come to life as you transform and enhance your capability. 

Deliver small pockets of value sooner: Working towards a big bang approach, where nothing meaningful is delivered for considerable amounts of time can mean your customers and people lose patience whilst delaying the benefits of a more efficient, scalable, marketable proposition that may help you retain or attract new clients.   

Truely decommission:  There can be cost, risk and legacy remaining in the organisation with old systems or processes that are not decommissioned well or at all.  Charting the course to realise the benefits that come with genuine decommissioning like reducing complexity and risk will deliver more value in the long run. 

Assess and update the Operating Model: Evolving your organisations operating model to support your retained capability versus your chosen outsourced capability is important to maximise the value of your investment.    Often retaining the capabilities you are strong at can assist with how you differentiate your proposition in the marketplace.  For example, owning interactions in the moments that matter for customers may be important to you, whilst outsourcing high volume commoditised services may be where you seek the value of a strategic partner. Whichever you choose, continually evolving your operating model as market dynamics change enables your organisation to better adapt to both the competitive and regulatory landscape.   

Conclusion 

There are many facets and complexities that come with identifying, assessing, selecting and implementing strategic partners. Whilst the fundamentals of getting this right hold true, the journey to get there can be ambiguous and challenging for any organisation, particularly when trying to do this alone.  Getting this right is where experience matters and the benefits that come with aligning with the right strategic partner can be limitless and complementary to balancing your offering, in particular where you lack strength.  

At Entregar we specialise in supporting organisations through their transformational journey in identifying, assessing, selecting and implementing strategic partners.  We will utilise our deep expertise and experience to guide you every step of the way.