Adventures in alliances land #10 – win rates

Win rates have been a big topic for the conversations I’ve been having in the last month or so, specifically how much higher is the win rate for a professional services (eg consulting or systems integration) business when working with an alliance.? This is a super interesting topic from a professional services perspective because increasing win rate has the obvious effect of increasing revenue, which increases absolute profit.? Depending on how you think about the economics of running a practice it also means either reduced business development (BD) costs for the same volume of sales, or higher BD efficiency as more sales result from the same BD effort. Once again I took to the internet to see if there is any public domain information on the topic.

I’ve been thinking, writing and doing strategic alliances for more than 20 years.? When something in the alliances space catches my attention that I can share, I will – so if ecosystems, partnerships and alliances are your gig and your passion too I hope you’ll find these scribblings useful.? If you enjoy this article please follow me, subscribe, like, comment and repost.? My book on strategic alliances is here if you’d like to read more adventures in alliances land.? https://www.amazon.co.uk/Strategic-Alliances-Fieldbook-Art-Agile/dp/103212900X/ref=sr_1_1?keywords=strategic+alliances+fieldbook&qid=1691319592&sr=8-1

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There is plenty of material related to how much higher technology companies win rates are when partnering with a consulting or systems integration partner.? You’ll see the links below to the detail, and the win rate increase are all impressive.? One references a 46% higher win rate for partner sourced co-sell compared to a technology company selling alone.? Another found 27% higher win rates for technology sales via market places compared to selling technology direct.? Another reported a 40% win rate for selling technology with professional services partners vs. 24% selling without into the Enterprise segment.?

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There is also plenty of public domain material validating the high value of alliances for professional services companies.? Some examples include a CEO of a consulting firm making a public statement that two technology alliances are responsible for a book of business that would equate to more than 10% of their business (which would be ~$2.5B revenue), a report that another professional services company's ten top alliance partnerships currently generate 50% of the company’s business (~$30B revenue) and a third Senior Partner from a consulting firm quoted as saying alliances created $5B of bottom line over the last 3 years (which would be ~$3B a year revenue for that firm).?

However, I could not find any public domain opinions on the professional services perspective on how much their win rates rise when partnering with tech companies.? My experience of running tech consulting practices tells me that win rates are somewhere between 5%-15% higher when partnering with the technology company in front of the client.? If you boil down the reasons clients value the partnerships it tends towards two points.? First is that the total cost of ownership falls for the engagement.? For example if the technology firm are providing credits for PoCs and helping optimise the solution configuration for the PS firms engagement then consumption and/or license costs for the tech will likely be lower.? The second is de-risking the cost, quality and/or delivery timelines for the engagement.? For example if the professional services firm has access to technical professionals from the tech firm for the project work and third line product experts then any wrinkles in moving from dev to production will be ironed out faster.?If the tech firm supports upskilling for the clients workforce then the adoption will be higher, and therefore quality of the business outcome being targeted is more likely to be realised.

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I call this the ‘value sandwich’ as from the client decision maker perspective they are weighting the aggregate of different slices of the overall offering to make their assessment on the best proposal.? Where the client sees the PS and tech firm putting forwards a joint proposal there are more layers in the sandwich adding value than if it’s the PS firm alone.? If the client perceives value in some of the additional layers the overall win rate will clearly be higher.? Doing some crude maths on a $100M pipeline and assuming a consulting firm win rate increases from 40% without partnering to 48% that would mean the same BD effort would deliver additional $8M revenue and $2M in profit.? That is a 20% increase compared to not partnering.? Alternatively, a 20% reduction in BD costs would equate to the same amount of revenue and a $1M increase in profit.

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What do you see for consulting and system integrator win rates when partnering?

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https://app.hushly.com/runtime/view/Understanding%20Partner-Led%20Growth%20Report.pdf?guid=r40f61j0oge6ile37o8q0lr4gr

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https://partnerinsight.substack.com/p/navigating-aws-marketplace-a-blueprint?utm_source=substack&publication_id=1334412&post_id=141587223&utm_medium=email&utm_content=share&utm_campaign=email-share&triggerShare=true&isFreemail=true&r=1pw9vh&triedRedirect=true

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https://www.strategic-alliances.org/pxcx

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https://tbri.com/blog/big-six-big-seven-accenture/

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