Improvement of the process of project acquisition in a network of consulting companies

MA-Thesis / Master von Gabriel Veil

Introduction:

It is not a question of how well each process works, the question is how well they all do work together.

(Lloyd Dobens, Thinking about Quality, 1994).

Partnerships have gained a large significance in today’s trading economy and the benefits and added value of partnering have become self evident for most large companies around the world. However, even though their place in our economy is undeniable, numerous partnerships still fail and many are struggling for efficiency. The reason behind this phenomenon lies in the processes of co-operation. After having answered the question ‘why to co-operate?’ in the last years, the needs of today is to understand ‘how to co-operate better?’.

The present paper looks especially at a company whose partnership strategy is to acquire more projects. The processes of acquiring new projects in consulting companies is often wrongly summarised as the writing of client-focused proposals. This process also involves a deep understanding of the company’s resources such as available competences, resources and finances. It furthermore needs accurate information on the status of available resources at a certain point in time when planning a project. This complexity is a real challenge for partnerships where information and resources need sharing and organisation. The specific context and environment of a partnership must furthermore be considered.

In order to understand the context of the acquisition process, the first part of this paper presents the partnership IW and its specific context and environment. The second part will review external and internal networking situations. Then, strategies and objectives where it will be looked at in regards to avoiding conflicts. The last part will examine the organisational features of the partnership and their potential impacts on the process of project acquisition. At the end of each chapters, propositions will be made on possible and practical improvement of the management processes within IW.

Definitions of partnerships, alliances and networks:

Definitions taken from the Oxford English Dictionary define Partnerships as an association of two or more people as partners. Alliances are defined as a union or association between countries or organizations. Finally networks are a group of people who interact together.

In these definitions, partnerships and alliances are defined as a status of a situation (associations, unions) and they describe the union of people as partners. In contrast, a network is defined with the interactions per se of a group. Partnerships represent both a status of co-operation but also a sharing and interacting of resources and information thus interact.

The main difference between the three definitions of a partnership, alliance and network is the purpose and level of development that each partnership, alliance or network undergoes. Generally speaking, a network can be understood as an interaction of partners without strong formal or managerial arrangements. On the other side, alliances mostly have clear contractual arrangements and form a legal entity on their own.

In the present paper, the theories on partnerships, alliances and networks apply because of the character of interactivity and sharing a common goal and values. Especially when looking at a specific process, the same complexity to achieving a common strategy exists.

Problem Statement:

Some challenges are faced today by partnerships regarding their processes. In order to fulfil its strategic objectives, IW needs an efficient project acquisition process. This field of activity is crucial when dealing with public entities because clients (public entities and ministries) have to undergo procurement procedures before selecting a service supplier thus avoiding preferential selection as would be possible with private clients. Therefore, not only do these processes determine the strategic development of partnerships but they are vital to be successful and to sustain the whole company.

Within partnerships, the acquisition process requires additional co-ordination resources than would be the case in a single company for the reason that the information needed for compiling a tender document may not always lie within one company. Furthermore, the compiling of new or updated information often requires an input from all partners thus requiring extra time and co-ordination.

The aspect of reaction to market belongs to the processes that must be implemented within short timeframes. If the co-ordination of partners and decision-making is long, valuable market opportunities for the partnership could get lost Finally, conflicting acquisition strategies can lead to inefficient processes and doubling of work. In the case of misunderstandings between partners, it can even lead to client mistrust which would represent a failure for the partnership.

Co-operation needs managed and secured processes as a working basis.

Objectives of the thesis:

The objective of the present dissertation is to define and analyse the environment, the strategies and the organisation of partnerships in regard to management responsibilities and try to find improvement opportunities and directions that would best suit to the particular situation of IW.

This dissertation does not aim at proposing a step by step method or practical implementation tool on how to improve the management of partnerships. However, this paper aims at analysing the general context of partnerships in order to provide a framework for the best possible approach to problem solving.

Aims and Approach:

In the first step, the dissertation will present the company IW, its organisational structure, its processes and vision. The goal here is to show the characteristics and environment of the company, the main aspects involved in the co-operation and to describe the process of project acquisition.

Then, the dissertation will focus on the situation and environment analysis of the company. Not only will the available internal and external literature be used but also a research on experts knowledge will take place. The experts’ knowledge will enable to have a more critical and practical view on the specific situation at present and in future.

Thirdly, the dissertation will look at strategies and objectives of the network. This part will include a review of the findings of common objectives and strategies and will consider conflicts and advantages rising from joint undertaking.

Finally, the dissertation will look at the organisational features of partnerships thus focusing on the organisational processes inside the company. The aim will be to find out how the network concept can be integrated and implemented in the organisation.

Each part of the dissertation will provide conclusions on the findings and present possible improvement proposition that could be derived from the research.

Methodology:

To reach the objective mentioned above the present paper undergoes a qualitative research using primary and secondary as well as internal and external research sources.

A selection of management aspects of situation, strategy and organisation was made since not every management aspects could possibility be analysed in the frame of the present paper. A preliminary investigation using primary and secondary sources enabled to have a first picture of the context and framework in which partnerships are active and provided a first understanding of the difficulties faced by partnerships. Aspects which were found to present management difficulties and which seemed to be able to have a strong problem solving potential were selected among the large management topics available within partnerships by the author of the present paper.

In order to demonstrate that the aspects chosen by the author of this paper fully represent areas of managerial difficulties or provide high problem solving potentials for partnerships, the building of hypothesis were undertaken and were inserted at the beginning of each main chapter of this paper.

Primary internal sources were found through personalities within IW known by the author of this paper. They all have a long experience in partnering with other companies, founding joint-ventures and are partners within IW.

Primary external sources were added through another expert outside of IW with extensive experience in a large number of scientific networks dealing in a very similar context to the one of IW including dealing mainly with public clients, providing services in a highly technical field and aiming at following the strategy of co-operation for the purpose of combining technical knowledge.

Persons included as primary sources are described in detail in the next part below.

Secondary internal sources included the information on the company IW which was made freely available by the management board of the company.

Secondary external sources were mainly taken from literature in school libraries or bought in bookstores. Management magazines were also reviewed as well as reports from public bodies covering markets and public-private partnerships.

Surveys were carried out composed of closed and open questions in the relevant field of the analysed subjects.

The questions and all surveyed experts received the same questions and could answer them alone through an online website in order to assure a standardisation of questioning and avoiding any kind of influences on the answers.

Questions were tested in regards to their general comprehension for the reader, avoidance of suggestive answers, covering concrete aspects not hypothetic and without negative interpretation content.

The possible answers provided for each multiple choice question were based on the exhaustive findings from primary and secondary sources. However, since the experts might still have an own opinion to a specific aspect, all questions were added a free answer through a field called ‘other, please specify’. The possible answers were finally tested regarding their completeness and focus to the research.

The possible answers for each question assessed the level of agreement or disagreement to the questions ranging from 1 to 4 (1 meaning fully agree, 2 meaning partly agree, 3 meaning partly disagree and 4 meaning fully disagree). This scheme enabled to force the surveyed experts to choose between a positive and negative answer thus avoiding neutrality which would not be useful for further analyse or deduction.

Finally, out of the research, it was possible to make propositions in order to improve the management and the acquisition process of IW. These propositions were created through discussions with the primary sources mentioned above and through the own experience of the author of this paper. The first goal of these propositions is to provide an answer to the specific difficulties or situation analysed in each part. It must be mentioned that these propositions do not aim at composing a thorough improvement list but rather provide an example for simple solutions that could be implemented in regards to the problems and situation analysed beforehand.

Presentation of the experts surveyed (primary sources):

Three persons from the partnership IW (internal sources) and one person from the partnership JP (external source) were surveyed who provided extensive knowledge and experience with partnerships, networking and specifically project acquisition. They all work in partnerships focusing on services to the public sector.

A short presentation of the experts surveyed is given below and a brochure of the two companies IW and JP are given in Annex 5.

Table of Contents:

0.	Introduction	11
0.1	Definitions of partnerships, alliances and networks	12
0.2	Problem Statement	12
0.3	Objectives of the thesis	13
0.4	Methodology	14
0.5	Presentation of the experts surveyed (primary sources)	17
0.5.1	Presentation of Dipl.-Ing. Uwe K. (IW)	17
0.5.2	Presentation of Dipl.-Ing Reinhold F. (IW)	17
0.5.3	Presentation of Dipl.-Ing Hans-Henning W. (IW)	18
0.5.4	Presentation of Prof. Jos L. (JP)	18
1.	Profile of IW	20
1.1	General presentation	20
1.2	Structure of the partnership	21
1.3	Organisation	22
1.4	Market positioning	22
1.5	Objective and strategy	23
1.6	The acquisition process within IW	24
1.7	Creation and developments	25
2.	The Network-Oriented Situation	27
2.1	Aspects of opportunities and threats	28
2.1.1	Responding to recent market developments	28
2.1.1.1	Hypothesis	28
2.1.1.2	Situation analysis of market developments	28
2.1.1.3	Findings from the questionnaire on market developments	30
2.1.1.4	Consequences and propositions for market developments	31
2.1.2	Public procurement specificities	33
2.1.2.1	Hypothesis	33
2.1.2.2	Situation analysis of public procurement	33
2.1.2.3	Findings from the questionnaire on public procurement	34
2.1.2.4	Consequences and propositions on public procurement	35
2.2	Aspects of strengths and weaknesses	37
2.2.1	Partnership resources	37
2.2.1.1	Hypothesis	37
2.2.1.2	Situation analysis of partnership resources	37
2.2.1.3	Findings from the questionnaire on partnership resources	38
2.2.1.4	Consequences and propositions on partnership resources	39
2.2.2	The role of partnership governance	41
2.2.2.1	Hypothesis	41
2.2.2.2	Situation analysis of partnership governance	41
2.2.2.3	Findings from the questionnaire on partnership governance	42
2.2.2.4	Consequences and propositions on partnership governance	42
3.	Objectives and Strategies	44
3.1	Common goals	44
3.1.1	Hypothesis	44
3.1.2	Situation analysis of common goals	44
3.1.3	Findings from the questionnaire on common goals	47
3.1.4	Consequences and propositions on common goals	48
3.2	Conflicts between partners	50
3.2.1	Hypothesis	50
3.2.2	Situation analysis of conflicts	50
3.2.3	Findings from the questionnaire on conflicts	51
3.2.4	Consequences and propositions	51
3.3	Advantages of joint project acquisition	53
3.3.1	Hypothesis	53
3.3.2	Situation analysis of joint project acquisition	53
3.3.3	Findings from the questionnaire on joint project acquisition	54
3.3.4	Consequences and propositions of joint project acquisition	54
4.	Organisational Features of the Partnership	56
4.1	Organisational Structure and Network Integration	56
4.1.1	Appropriate organisational features	56
4.1.1.1	Hypothesis	56
4.1.1.2	Situation analysis of the organisational structure	56
4.1.1.3	Findings from the questionnaire on organisational structure	57
4.1.1.4	Consequences and propositions on organisational structure	58
4.1.2	Promoting knowledge sharing	60
4.1.2.1	Hypothesis	60
4.1.2.2	Situation analysis of knowledge sharing	60
4.1.2.3	Findings from the questionnaire on knowledge sharing	61
4.1.2.4	Consequences and propositions on knowledge sharing	61
4.2	Organisational processes and network integration	63
4.2.1	Collaborative staff management	63
4.2.1.1	Hypothesis	63
4.2.1.2	Situation analysis of staff management	63
4.2.1.3	Findings from the questionnaire on staff management	64
4.2.1.4	Consequences and propositions on staff management	65
4.2.2	Reducing co-ordination costs	66
4.2.2.1	Hypothesis	66
4.2.2.2	Situation analysis of co-ordination costs	66
4.2.2.3	Findings from the questionnaire on staff management	67
4.2.2.4	Consequences and propositions on co-ordination costs	68
5.	General conclusion	70
5.1	Critical review on the research	70
5.2	Limitations	71
5.3	Outlook	72
6	Bibliography	74
7	Annexes	79
Annex 1.1	Blank Questionnaire in English	80
Annex 1.2	Blank Questionnaire in German	81
Annex 2	Answered questionnaires	82
Annex 3.1	Analyse of answers from IW	83
Annex 3.2	Analyse of answers from JP	84
Annex 4.1	Wikipedia definition of resource	85
Annex 4.2	Website Tenders Electronic Daily	86
Annex 5.1	Brochure of IW	87
Annex 5.1	Brochure of JP	88

Text Sample:

Chapter 3.2, Conflicts between partners:

Hypothesis:

Lack of trust between the partners lead to inefficient processes and conflicting interests.

Situation analysis of conflicts:

In the analysis of goal sharing showed by the previous chapter, conflicts within a partnership can have their roots within the organisation, the strategy or the personality of the members of a partnership. As described by Doz and Hamel, ‘design features cannot solve all partner conflicts. Clever design is no substitute for strategic compatibility. While design features may paper over strategic differences, unresolved strategic conflicts sooner or later break through’. Dealing with conflicts is obligatory and should be done as soon as possible as they may not resolve by themselves.

The consequences of conflicts for a partnership can be far reaching and maybe lead to the dissolving of a partnership. As explained by Cook, Hardin and Levi, ‘firms whose agents trust one another have fewer concerns about adverse selection and also have lower co-ordination costs’.

Conflict should be looked at, as far as possible, in a positive light. ‘Partners can often learn and benefit from the different perspectives and priorities that exist between them’ as explained by Doz and Hamel. This statement can also be related to the previous chapter describing the dynamic environment of partnerships. In this context, conflicts can provide the opportunity to readjust or reassess goals in order to remain within the strategy aimed at by the partnership.

Finally, conflicts also need to be understood as being part of a relationship among individuals where social issues are involved. Partners and members of teams within partnerships should ‘figure out ways of working together and formulate and commit to a shared definition of the alliance objectives and goals’. A will to co-operate and to commit to a certain extend to the partnership are necessary from each partner.

Findings from the questionnaire on conflicts:

For the elaboration of question 12 of the questionnaire, the areas of conflicts described in the literature were taken as basis for the possible answers to the question. Some areas were not necessarily examined in detail in the above section.

The answers given by the IW’s experts are very much consistent with the fact that ‘Reaction to market changes’ and ‘Management style’ are fairly recurring areas of conflicts. Both were valued with the number 2 meaning ‘fairly recurrent’. Of even higher recurrence was the answer of ‘Undefined expectations’. The latter answer is also considered the most recurring area of conflict for the expert of JIIT.

In general, answers did not give a strong importance to any of the proposed aspects. It seems that the reasons for conflicts are many and that there isn’t a single reason always applicable.

Consequences and propositions:

Conflicts can never be avoided completely in partnerships and they should be regarded as an opportunity for change and improvement. Nevertheless, they need to be resolved or even avoided in the first instance wherever possible.

Furthermore, the roots of conflicts can lie within strategic, organisational or process settings thus making a deep investigation into the structure of the partnership unavoidable.

The following propositions de not look at a particular conflict. They aim at proposing tools or ways to avoid conflicts or to enhance fruitful co-operation aspects.

Invest in improved communication tools:

Clear communication methods and tools provide the best means of helping to resolve the issue of undefined expectations. However, since the IW partners are all located within Rhineland-Palatinate in Germany, they do not face strong cultural differences. This would enable a not-so-large investment in the improvement of all internal and external communication media and tools having a significant impact in these conflict areas.

Implementation of a market early warning system:

Since partnerships are constructed within dynamic markets and changing environments, adaptation to market changes should belong to the core competencies of the partnership. A proactive reaction from partners should be expected in order to adapt as quickly as possible.

An early warning system could be put in place through regular market analysis that would then be communicated to the strategic head of the partnership. Large parts of the relevant market data can also be obtained from external sources such as marketing services or statistic offices.