Partnerships will be key to corporate survival

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Collaborative partnerships will be key to corporate survival, reveals a new survey from the Economist Intelligence Unit

Companies believe collaboration with other companies has become critical to their long-term survival, according to new research from the Economist Intelligence Unit. More than half of the 187 executives polled for this report say collaboration will either form an important part of their firm’s competitive advantage or will actually be central to its survival over the next three years. In addition, 51% say that they have changed their business model over the past three years to take greater advantage of collaborative partnerships.

Key areas of collaboration include sharing supply chain data, establishing sales partnerships to tap fast-growing markets, and collaborating on research and development. In each of these areas, collaborative partnerships are delivering significant rewards: 28% of respondents say their biggest collaborative ventures have delivered either more or much more value than expected, compared with 11% who say they have not.

“What this research reveals is that companies of all sizes are engaging in, and benefiting from, collaboration with other organisations, either locally or in countries where they may have no direct presence whatsoever,” said James Watson, the editor of the report. “What is striking is that a significant minority of these companies acknowledge that they couldn’t even exist if it wasn’t for the collaborative relationships they have engaged in.”

These findings are published today in Companies without borders: collaborating to compete, a report from the Economist Intelligence Unit, sponsored by BT.

Other key findings of the report include:

Collaborating with other firms is now the norm for nearly all businesses. The majority of companies (64%) engage with up to 10 partners, although some have established agreements with more than 100. And nearly all firms expect the average number of partnerships they have to rise over the next three years.

Most collaboration centres on sales and marketing. Firms collaborate for a number of reasons: to provide products they can’t deliver alone, to keep up with competitors or to expand their global reach, to mention just a few. These partnerships are typically being driven by the sales and marketing departments.

The biggest challenge involves finding suitable partners. About one-third of executives polled for this report say the biggest impediment to collaboration is simply being able to find an appropriate partner. And when they do, overcoming any cultural clashes between the two organisations is a major concern, along with more practical issues, such as getting system integration right or dealing with data security concerns.

Successful collaboration hinges primarily on people skills. Making partnerships work relies more on people than anything else. Survey respondents identified the skills of the personnel assigned to a relationship as the single most critical factor for successfully managing the partnership.

Andy Green, CEO BT Global Services, said: “This research shows the increasing importance of collaborating within and between organisations. The digital networked economy is enabling companies to create new business models, utilise global resources and work in real time with people anywhere in the world as if they were in the office next door. This erosion of the traditional barriers of time and distance means that the ability to partner and work effectively is more important than ever to achieve success in the global competitive environment.”

Companies without borders: collaborating to compete is available, free of charge, at: http://www.eiu.com/CompaniesWithoutBorders

Notes for editors:
The Economist Intelligence Unit conducted a survey of 187 executives from the UK during August and September 2006. A broad range of industries were polled, including financial services, professional services, IT and technology and manufacturing, among others. Fifty percent of all respondents were C-level executives, representing a range of functional roles. About half of all firms surveyed reported revenue in excess of US$1bn.

About the Economist Intelligence Unit
The Economist Intelligence Unit is the business information arm of The Economist Group, publisher of The Economist. Through our global network of about 700 analysts, we continuously assess and forecast political, economic and business conditions in 200 countries. As the world's leading provider of country intelligence, we help executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies.

About BT
BT is one of the world’s leading providers of communications solutions and services operating in 170 countries. Its principal activities include networked IT services, local, national and international telecommunications services, and higher-value broadband and internet products and services. BT consists principally of four lines of business: BT Global Services, Openreach, BT Retail and BT Wholesale.

In the year ended March 31st 2006, BT Group’s revenue was £19,514 million with profit before taxation of £2,040 million.

British Telecommunications plc (BT) is a wholly-owned subsidiary of BT Group and encompasses virtually all businesses and assets of the BT Group. BT Group plc is listed on stock exchanges in London and New York. For more information, visit www.bt.com/aboutbt

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