Project Alliances are some of the most dynamic forms of business partnerships. While their nature varies from project to project, their competitive potential keeps growing. We are entering the era of alliancing at the medium business level.
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As the global market has been rapidly evolving during the last 20 years, the need for integrating collaborative associations increased. The reasons are many. The most significant ones include segmentation of business processes due to outsourcing, loss of centralised control over new technology development, and struggle for relative equality between the small and the big. One of the integration umbrellas that have particularly gained momentum is called Project Alliance.
There is one simple purpose behind each and every alliance and that is to provide better conditions for its members. However, the ways and models of how to achieve such a state widely differ. In the context of our system Abillance.com and associated services, we proceed on the following definitions:
An alliance is a framework between two and more entities which have decided to share some of their constitutional, economic, financial, technological and work processes beyond the traditional scope of contractual relationships.
There are three types of alliances:
1. Strategy-driven Alliance
It is created and entered into by its members on the basis of their belief that they would achieve some of their individual strategic goals better together. This type of an alliance includes international military pacts, political parties’ agreements, public-private sector partnership programs, or resource and market share agreements among corporations.
2. CRM-driven Alliance
It is usually a customer-supplier relationship which has for a reason exceeded its traditional scope and requires a closer association. The purpose could be to share some resources, more effective CRM, or a need to involve suppliers into planning etc. The examples include supply chains of more complex product assemblies, outsourcing management, and some procurement methods such as electronic auctions or bulk-buyers associations.
3. Project-driven Alliance
It is an association of parties responsible for delivering one or more capital works. In this case, their need for alliancing is driven not only by the advantages of sharing resources but more importantly, by the need to participate in a complicated work environment, and share some liabilities and risks involved. Typical project alliances can be found in building or engineering industries, primary resources, infrastructure, and research & development.
Some of the above characteristics are specific for each alliance type, some are entirely global. Abillance.com has been created as a systemic solution to Project Alliances where work structures, organisational requirements and process definitions put the highest demands on stakeholders. Therefore we focus primarily on them, though the value for any other participations cannot be excluded.
A typical Project Alliance is formed as a supply chain around a specific project assignment. The project assigner (owner) can either be the project’s investor or the project’s general supplier who owns the capital work to its delivery. The project owner selects the non-owner participants who collectively have the critical resources needed to accomplish the project and together they form an alliance. Project Alliances operate as ‘virtual organisations’ performing all of the functions required for delivering the project. In this environment, the commercial interests of each alliance participant are best served by meeting or exceeding the agreed upon alliance goals.
Project Owner together with Project Non-Owner Participants delegate their representatives to Alliance Leadership Team (ALT). ALT further determines the personal representation within Alliance Management Team (AMT). AMT directly supervises Wider Project Team responsible for Project operations. This concept has been applied successfully on some large infrastructure projects in Australia.
The features of Project Alliances include achieving project objectives by aligning the incentives and goals of project participants and collectively managing project issues and risks. Subsequently, Project Alliances maintain a collaborative, flexible approach to the project management. The approach is not only based on the beneficial integration of project stakeholders and their resources. It also integrates some of the strongest managerial and work aspects.
By outsourcing some parts of their business process, many companies have lost control over their management systems causing qualitative and organisational inconsistencies. The need for re-integration has brought the fragmented parts back together calling for close collaborative associations – Project Alliances.
A Project Alliance goes through a constant dynamic evolution during the work process, given by the nature of a typical project environment. The links and relationships inside and outside a Project Alliance dynamically evolve as well. By relative fragmentation of resources and work process among many corporate entities (and therefore interests), Project Alliances put ever increasing demands on contractual relationships, stakeholder management, planning, work process, communication, change management, and file and record management.
Abillance.com has been conceived as a system that empowers the absolute majority of setups, processes and tasks related to any Project Alliance. (See Features & Benefits)
