Business relationship management

Strategic business partners (what used to be referred to as shared services or service providers) require a common methodology to drive true business innovation and strategy. These strategic business partners (IT, Finance, HR, external providers, etc.) are converging with the business. There is one shared business strategy with each business partner accountable for portions of the overall business value achieved. Business Relationship Management Institute, Inc started promoting this business capability in 2012 with a non-profit membership community dedicated to the BRM profession.

These features include:

• Business Relationship Management focuses on business value realization through accountable business partners
• advances in the scale, scope, and sophistication of the network effect
• constant disruption as the 'new normal' business dynamic[http://blogs.harvardbusiness.org/bigshift/2009/01/the-new-reality-constant-disru.html The New Reality: Constant Disruption]
• decentralization of knowledge and the devaluation of traditional intellectual property[http://blogs.harvardbusiness.org/bigshift/2009/01/abandon-stocks-embrace-flows.html Abandon Stocks, Embrace Flows]{{Cite web |url=http://itc.conversationsnetwork.org/shows/detail776.html |title=Yochai Benkler | Participation Revolution |website= |archive-url=https://web.archive.org/web/20130729205434/http://itc.conversationsnetwork.org/shows/detail776.html |archive-date=29 July 2013 |url-status=dead |access-date=19 September 2013 }}
• increased openness of networked knowledge{{Cite web |url=http://www.opposableplanets.com/future/2009/01/open-beats-closed-four-principles-for-doing-business-in-the-network-economy |title=Open Beats Closed : Four Principles for Doing Business in the Network Economy |access-date=2009-11-04 |archive-url=https://web.archive.org/web/20091201083744/http://www.opposableplanets.com/future/2009/01/open-beats-closed-four-principles-for-doing-business-in-the-network-economy/ |archive-date=2009-12-01 |url-status=dead }}[http://blog.wirearchy.com/2009/01/07/john-chambers-ceo-of-cisco-at-mit-on-enterprise-20/ John Chambers, CEO of Cisco at MIT, on Enterprise 2.0] {{webarchive |url=https://web.archive.org/web/20091119021036/http://blog.wirearchy.com/2009/01/07/john-chambers-ceo-of-cisco-at-mit-on-enterprise-20/ |date=November 19, 2009 }}
• decline of command and control management{{Cite web|url=https://www.antonymayfield.com/2009/03/25/command-and-control-is-dead-the-shape-of-next-gen-organisations-is-social-networks/|title="Command and control is dead": the shape of next gen organisations is social networks|website=OPEN|date=25 March 2009 }}

The impact of these trends on business relationships have driven the foundation of a distinct BRM discipline.

BRM is implemented through organizational roles, a structured discipline, and a developed organizational capability

BRM Discipline — The Business Relationship Management Discipline is an effective application of knowledge, demonstrated through a set of competencies and mindsets to advance a BRM Capability.

BRM Role — The Business Relationship Management Role is the set of competencies required to advance the BRM Capability. Business relationship management consists of knowledge, skills, and behaviors (or competencies) that foster a productive relationship between a service organization (e.g. Human Resources, Information technology, a finance department, or an external provider) and their business partners.

A key goal of BRM is to create a comprehensive model of business relationships, making their value explicit and measurable over time . A mature BRM model will ultimately support strategic business research and development efforts as well as tools and techniques that implement BRM principles.

The approach to the BRM modeling process is to identify and describe various aspects of business relationships in terms of:

• defined relationship types, in which each type has a specified purpose, associated roles, and a measurable outcome
• a set of processes that make up the business relationship lifecycles
• a set of principles that apply specifically to these lifecycle processes

Assets and products derived from the BRM model are meant to inform and support:

• A practice derived from applying BRM principles, analyzing outcomes, and refining over multiple iterations
• A platform derived from successful practice that further support and optimize BRM as a discipline

The BRM model will identify and categorize business relationships according to type. Each type serves a distinct purpose, defined by specific roles, functions, and activities that can be identified, measured, and analyzed. Some examples of these relationship types are business-to-business, business-to-consumer, and business-to-employee.

The concept of the business relationship lifecycle{{cite journal |last1=Eggert |first1=Andreas |last2=Ulaga |first2=Wolfgang |last3=Schultz |first3=Franziska |title=Value creation in the relationship life cycle: A quasi-longitudinal analysis |journal=Industrial Marketing Management |date=January 2006 |volume=35 |issue=1 |pages=20–27 |doi=10.1016/j.indmarman.2005.07.003 }}{{cite journal |last1=Ulaga |first1=Wolfgang |title=Capturing value creation in business relationships: A customer perspective |journal=Industrial Marketing Management |date=November 2003 |volume=32 |issue=8 |pages=677–693 |doi=10.1016/j.indmarman.2003.06.008 }} builds on charting the complex changing values of business relationships over time in contrast to simple transactional value.

Examples of BRM lifecycles include:

• A large-scale grow and sustain cycle, characterized by one-to-many and many-to-one relationships. Activities in this cycle are more or less continuous and overlapping, such as marketing, customer product support or maintenance, or online community. These have indeterminate outcomes.
• A small-scale (micro) engagement cycle, characterized by one-to-one, discrete or transactional relationships. These have discrete cycles and negotiated outcomes.

;Measurement and analysis

:The goals of BRM require that its concepts and principles be identifiable and measurable. Given the model, a person should be able to identify the business relationships that they are engaged in, and measure them in terms like quantity or duration. The same holds for any aspect of BRM, such as type, role, or principle.

;Purpose

:Every business relationship has a purpose that requires the participation of multiple roles to accomplish. The purpose of a given business relationship is discrete and quantifiable.

;Reputation and trust

:The BRM model should attempt to model and quantify reputation and trust. Every relationship, and every interaction within it, contributes to reputation. Reputation mitigates risk and reduces friction within business processes. Concern for reputation incentivizes good behavior. Absence of trust will cause a business relationship to fail on the other hand trust increases efficiency and enables conflict resolution. The relationship between trust as a traditional core concept{{Cite web|url=http://trustedadvisor.com/cgreen.articles/38/Trust-in-Business-The-Core-Concepts|archiveurl=https://web.archive.org/web/20091110032155/http://trustedadvisor.com/cgreen.articles/38/Trust-in-Business-The-Core-Concepts|url-status=dead|title=Trust in Business: The Core Concepts|archivedate=November 10, 2009}} and in its emerging 'radical' form as a component of online community{{Cite web|url=http://www.radicaltrust.ca/wp-content/uploads/2007/10/radical_trust.pdf|title=Radical Trust}} must be described.

;Governance

:The goal of effective business relationship governance is achieving both cooperation and coordination between business actors.{{Cite journal|last1=Gulati|first1=Ranjay|last2=Wohlgezogen|first2=Franz|last3=Zhelyazkov|first3=Pavel|date=2012-06-01|title=The Two Facets of Collaboration: Cooperation and Coordination in Strategic Alliances|journal=Academy of Management Annals|volume=6|issue=1|pages=531–583|doi=10.5465/19416520.2012.691646|issn=1941-6520|url=https://dash.harvard.edu/bitstream/1/10996795/1/gulati%2cwohlgezogen%2czhelyazkov_the-two-facets_20120430.pdf}} They can rely on either contractual or relational mechanisms, or (most of the times) both, to facilitate the governance of business relationships.{{Cite journal|last1=Poppo|first1=Laura|last2=Zenger|first2=Todd|date=2002|title=Do formal contracts and relational governance function as substitutes or complements?|journal=Strategic Management Journal|language=en|volume=23|issue=8|pages=707–725|doi=10.1002/smj.249|issn=1097-0266|doi-access=free}} The BRM model needs to account for and align with models of corporate governance, including business ethics, legal constraints, and social norms as they apply to business relationships.

;Boundaries

:The BRM model should define the boundaries of business relationships within the larger continuum of interpersonal relationships. In addition to governance issues, the model should examine if there are optimal levels of personal connection, and whether they differ by type, role, or other attributes. The model should help define boundaries that optimize effectiveness while supporting good governance practices.

;Exchange and reciprocity

:The BRM model of exchange and reciprocity must extend traditional dimensions to account for not only financial exchange, but also time, money, knowledge, and reputation exchanges. These are a key feature of business relationships.

{{portal|Business and economics}}

• Business administration
• Corporate communication
• Right-time marketing

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Category:Management by type

Relationship management