Creating Profit Through Alliances - business models for collaboration E-book | Page 17

functionalities. The revenue consists of licensing fees,
monthly service fees or a percentage of the savings.
Business development manager Peter Hum explains:
“As Telecom Expense Management is a niche market
and is designed for regional and globally focused
enterprises, we have to look beyond the borders of
Singapore. We call ourselves a global company, and
have arranged our presence in other countries
through partners. Our overall strategy can be
characterised as customer intimacy, so we have to
work closely with these partners to deliver a
customised product to our clients.
The value of the partnership for us lies in the
partner's network. We can add specific knowledge
and our products. We have some protected
intellectual property and our business intelligence
system is a result of many man-years of R&D and
software developmental efforts.”
Finding the right partners is always difficult. Peter:
“We see a lot of companies with a background in IT,
but in most cases they have access to the potential
customer's IT manager, and not the financial director.

Decide how to differentiate: generic
strategies and their current validity
If you know where your opportunities in the market
lie and what your strengths are, you have to do
something in order to further differentiate yourself. If
you continue doing what you have always done, you
will get what you have always received (such as poor
profits).
In order to differentiate, various generic strategies
were developed during the previous century.

We are looking for partners that are willing to invest
in a long-term relationship with the CFO or any senior
level managers who focus on operational P&L.
Partners should see that we can help them set
themselves apart.”
One of Eastcom‟s most important partners is in
Malaysia. The partnership is formalised with an NDA
and a partnership agreement. The partner does the
sales and system integration, Eastcom provides the
sales support, cost management technology, cost
management domain knowledge, and technical
support. Revenue is shared, with the partner
receiving a percentage of the contract value for
Eastcom. There is a model for intercompany price
setting, in which every partner has to defend its
markup.
Eastcom maintains a partnership in Belgium as well,
with a company called Convergent Strategies. Peter
Hum: “We are very closely aligned with Convergent
Strategies, and the collaboration turned out to be
useful for European companies with branches in Asia
or Asian companies with branches in Europe. This
adds another dimension to our offering.”

However, as accessibility to information and capital
has increased strongly over the past 10 to 15 years,
these strategies have lost part of their basis. In this
section I will discuss which elements continue to offer
permanent competitive advantage.

Generic strategies
Porter and Treacy & Wiersema are the most important
authors that explain how you can flesh out your
distinctiveness in relation to the competition. In
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