Business partnering is the development of successful, long term, strategic relationships between customers and suppliers, based on achieving best practice and sustainable competitive advantage. The term also refers to a business partnering support service model, where professionals such as HR staff work closely with business leaders and

line manager Line management refers to the management of employees who are directly involved in the production or delivery of products, goods and/or services. As the interface between an organisation and its front-line workforce, line management represents t ...

s to achieve shared organisational objectives. In practice, the business partner model can be broadened to include members of any business function, for example, Finance, IT, HR, Legal, External Relations, who act as a connector, linking their function with business units to ensure that the technical, or functional, expertise they have to offer is placed within the real and current concerns of the business to create value.

Mission

The mission of business partnering and the key-aspects of the discipline have been developed recently in the tourism field. The mission of business partnering (for tourism) consists in "creating, organizing, developing and enforcing ''operative'' (short-term), ''tactical'' (medium-term) and ''strategic'' (long-term) partnerships" (Droli, 2007). "Partnering is the process of two or more entities creating synergistic solutions to their challenges."

Examples

Joint selling is an example of operative partnering activity. Account intelligence sharing reselling or "value chain integration" (Child, Faulkner, 1998) are examples of tactical partnering initiatives. Joint

product development New product development (NPD) or product development in business and engineering covers the complete process of launching a new product to the market. Product development also includes the renewal of an existing product and introducing a product ...

is a typical strategic partnering activity. Partnering agreements are commonly used in the different kind of partnerships. One example is the strategic partnering arrangement in the aviation sector which was put together by the UK

Ministry of Defence A ministry of defence or defense (see American and British English spelling differences#-ce.2C -se, spelling differences), also known as a department of defence or defense, is the part of a government responsible for matters of defence and Mi ...

and

AgustaWestland AgustaWestland was an Anglo-Italian helicopter design and manufacturing company, which was a wholly owned subsidiary of Finmeccanica (now known as Leonardo). It was formed in July 2000 as an Anglo-Italian multinational company, when Finmeccani ...

. Both partners share an agreed common objective to improve helicopter services and support to the front line. The MOD also wishes to provide the best value for money to the taxpayer while AgustaWestland seeks to provide the best returns to its shareholders via a stable, long-term income stream.

Benefits

Reduction of general costs: business partnering can be cheaper and more flexible than a merger or acquisition, and can be employed when a merger or acquisition is not feasible. Business partnering increases "competitive advantage" (

Porter Porter may refer to: Companies * Porter Airlines, Canadian airline based in Toronto * Porter Chemical Company, a defunct U.S. toy manufacturer of chemistry sets * Porter Motor Company, defunct U.S. car manufacturer * H.K. Porter, Inc., a locom ...

, 1985). The direct benefits of business partnering consist in greater competitive advantage through cooperation (the co-opetitive advantage) and even better opportunities of revenue, occupation and investment in the sector of application. Business partnering creates a no more traditionally-based solidarity or "organic", but a rationale form of "mechanic solidarity" (Durkheim, 1893). Partnering takes a new approach to achieving business objectives. It replaces the traditional customer-supplier model with a collaborative approach to achieving a shared objective; this may be to build a hospital, improve an existing service contract or launch an entirely new programme of work. Essentially, partners work together to achieve an agreed common aim whilst each participant may still retain different reasons for achieving that common aim.

Formation of business partnering

Business partnering can take the form of a

strategic alliance A strategic alliance is an agreement between two or more Legal party, parties to pursue a set of agreed upon objectives needed while remaining independent organizations. The alliance is a cooperation or collaboration which aims for a synergy wh ...

, a buyer-supplier relationship, a

joint venture A joint venture (JV) is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance. Companies typically pursue joint ventures for one of four reasons: to acce ...

, or a

consortium A consortium () is an association of two or more individuals, companies, organizations, or governments (or any combination of these entities) with the objective of participating in a common activity or pooling their resources for achieving a ...

. Firms should pay particular attention to the mechanisms of governance used to organize their partnership. They can rely on a combination of contractual and relational mechanisms. Firms usually need to form partnerships with other firms to enable their business model (Teece, 2010). To become attractive to other businesses firms need to align their internal features, such as management style and products with the market situation. In a 2013 study, Johan Kask and Gabriel Linton develop two ideal profiles, or also known as configurations or archetypes, for

startup A startup or start-up is a company or project undertaken by an entrepreneur to seek, develop, and validate a scalable business model. While entrepreneurship includes all new businesses including self-employment and businesses that do not intend to ...

s commercializing inventions. The ''Inheritor'' profile calls for management style that is not too entrepreneurial (more conservative) and the startup should have an incremental invention (building on a previous standard). This profile is set out to be more successful (in finding a business partner) in a market that has a dominant design (a clear standard is applied in this market). In contrast to this profile is the ''Originator'' which has a management style that is highly entrepreneurial and have a radical invention (totally new standard). This profile is set out to be more successful (in finding a business partner) in a market that does not have a dominant design (established standard). New startups should align themselves to one of the profiles when commercializing an invention to be able to find and be attractive to a business partner. By finding a business partner a startup will have greater chances to become successful.

Financial business partnering

The term financial business partnering is used to describe finance executives working alongside various business departments including operations, human resources, sales and marketing, among others, providing financial information,

tools A tool is an object that can extend an individual's ability to modify features of the surrounding environment or help them accomplish a particular task. Although many animals use simple tools, only human beings, whose use of stone tools dates ...

analysis Analysis (: analyses) is the process of breaking a complex topic or substance into smaller parts in order to gain a better understanding of it. The technique has been applied in the study of mathematics and logic since before Aristotle (38 ...

and insight, which allows companies to make more informed decisions while driving

business strategy In the field of management, strategic management involves the formulation and implementation of the major goals and initiatives taken by an organization's managers on behalf of stakeholders, based on consideration of resources and an assessment of ...

. See and

FP&A Financial planning and analysis (FP&A), in accounting and business, refers to the various integrated financial planning, planning, financial analysis, analysis, and Financial_modeling#Accounting, modeling activities aimed decision support, at sup ...

. Although finance business partnering has been around for many years, it has taken on increased importance, particularly due to the

2008 financial crisis The 2008 financial crisis, also known as the global financial crisis (GFC), was a major worldwide financial crisis centered in the United States. The causes of the 2008 crisis included excessive speculation on housing values by both homeowners ...

. Increasingly, companies are looking to form "stronger partnerships" between the finance department and other parts of the business, and to "integrate" the finance team more closely into the business.

Sources

Partnering requires all partners to transform their businesses in terms of relationships, behaviours, processes, communications and leadership. Neither participant can succeed without the other so the recommended approach is to implement the transformation as a joint activity wherever possible. Partnering has existed for centuries. In economics, business partnering has gained significant momentum and focus within leading global businesses, as "a medium for achieving significant revenue growth" (Doz, Hamel, 1998).

References

{{Reflist Business Supply chain management