Should an Alliance Function be a P&L?

I had a really interesting conversation recently with Pallab Deb (Global Head of Alliances Wipro) in which he posed the question: ‘Should Alliance Departments have full profit and loss responsibility.  His reasoning was as follows:
“Cloud is changing the very fabric of product and service delivery. The dis-intermediation of the channel is underway as service delivery in the utility model becomes the norm. Today we are quickly getting surrounded by products of every ilk that are delivered as-a-service. System Integrators are taking on the challenge of dis-intermediation by drawing up plans for their very own as-a-service offerings that are more often than not, offered as private cloud solutions bundled with BPO and so on.  As the OEM and the channel therefore head for imminent conflict, the question that lingers in the air is – what role do alliance organizations play in this evolving scenario?”
“Now, in my opinion says Pallab, alliance organizations have an opportunity of their lifetime to set and drive the agenda as opposed to be being enablers alone. OEMs and System Integrators realize they will not be able to win the ‘as-a-service’ battle on their own as customers expect complex business processes (outside of sales force automation, core HR, payroll, recruitment, indirect  procurement etc.) to start getting delivered as-a-service. Add requirements around data security, privacy, performance and complex contract requirements, the answer is clear – pure public cloud options – whether it is the software, platform or infrastructure, will not be the vehicle to deliver complex business processes as a service. The answer almost always will be a hybrid cloud option that balances the risks and mandatory asks with the cost effectiveness and simplicity of public cloud offerings. And herein lies the opportunity.”
My own view is that business offerings are getting more complicated by the year and yet paradoxically the very thing that I thought would be hard to organise (technological interoperability) seems to be the very thing that most organisations have cracked!  The thing that still remains to be solved is the question of relationship interoperability.  In other words groups of organisations agreeing in advance how they will partner to help clients and customers take advantage of these new opportunities.
I know that this issue is in the minds of HCL because their VP Alliances EMEA (Jeffrey Shabong) shared the same issues with me during a lunch recently in London.  Jeffrey would like to put together a complimentary group of IT: vendors, outsourcers, software, hardware and advisers to help PE companies to more actively and efficiently transform their newly acquired businesses.  To do so the group needs to collaborate effectively in deciding a common vision, a self imposed governance model, the appropriate roles for each of the participants and finally the common and joint business value proposition.  Coincidentally each of these things is an identified Common Success Factor (CSF) in successful strategic alliances.
Still not convinced?  Well how about the case of Equinix? Equinix lets you connect directly to over 450 cloud services providers in the Equinix ecosystem – giving you an unrivalled menu of cloud options. With Equinix, you maintain full control of your infrastructure during your cloud transformation. Equinix’s world-class security expertise can also help your organisation to overcome uncertainties and risks on its cloud journey.
As Petrina Steele (VP Sales Europe) puts it: “We have created a great shopping mall now what we need are service providers to occupy some of the stores in the mall and sell their wares!  Its a win - win - win.  The client wins because he can shop in the mall for services he wants, the service provider wins because we give him access to potential customers and Equinix wins because we add value to our clients on an on-going basis”.
Some years ago organisations joined alliances as a way of competing group to group (remember the agility alliance from EDS or the SOA alliance from Capgemini).  the thought was back then that competition in the future wouldn’t so much be between individual companies but rather between groups of companies (alliances and collaborations) with the better run and more efficient collaborations winning.  it seems to me that the future is here and one thing which is driving it more than most other factors is ‘Cloud’.
What do you think?

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