Enterprise Relationship Management - Tools and Methodologies

Tools and Methodologies

Why do we need an Enterprise Relationship Management framework? Simply put, because relationships are becoming more and more prevalent and more integral to an organization's success. Although establishing inter-enterprise links is far from a new science, Klambach and Roussel (1999) affirm that nearly 60% of business alliances do not deliver anticipated benefits while Lovallo & Kahneman (2003) and Selden & Colvin (2003) estimate M&A ( Mergers & Acquisitions) failures range between 70% and 80%.

With statistics like these, the need to improve relationship success rates seems quite obvious. Many authors have addressed these issues from varying perspectives, including technology enabling a firm, reviewing or re-designing operational & administrative processes, and transforming the culture to one that is more adapted to collaboration. As Galbreath (2002) and Norman & Ramirez (1993) state, collaboration or rather the effective leveraging of relationship resources to create new sources of value, is a process of learning and developing new mental models and competencies (Senge, 1991) as well as obtaining resources through new means/sources.

ERM is still a relatively new field and few players stand-out with a complete ERM methodology and tools. Nevertheless a host of best of breed tools and methodologies exist to carry out an ERM implementation, unfortunately they are not integrated and focus on very specialized problem areas. ERM tools can be viewed as enablers of an ERM methodology.

Fundamentally adopting ERM is a cultural and change management issue more than a technology or process one. Therefore regardless of the methodology or tools that one may elect to use when integrating with outside firms, they must maintain a focus on the human side of the equations. The figure below illustrates the benefits of focusing on the human, cultural and change aspect of a project, notably deploying ERM in this case.