Creating Profit Through Alliances - business models for collaboration E-book | Page 53

TNT has bundled a large number of these mail services within a network, the Mail Alliance. This alliance mainly competes with Deutsche Post and has the purpose of distributing mail that has to be delivered outside the borders of an individual region, to other parties within the Mail Alliance. All participating companies work together on the basis of one IT system and one set of sorting rules, which enables the „roaming‟ between the networks. The conditions to have one‟s mail delivered in another region are similar for all participants. Unusual supplier risk Contracting-out work to a supplier generally does not qualify as an alliance. It usually concerns a purchasing transaction, with the service or product and its costs specified beforehand. Thus, there is no question of shared risks or joint management. There are some exceptions, however; for instance in outsourcing, where the client's personnel are transferred. The result is that the supplier's production capacity increases, without any solid guarantees of higher sales. The collaboration is based on the assumption that the supplier has more options of putting people to work than the client. The client transfers a large portion of his knowledge and work processes to the supplier, that puts his business operation at some risk. He will therefore want to have a certain measure of operational control in return. decides on the surrounding infrastructure and thus can influence the number of cars using that road. On the other hand, the multiple-year contract means that the public authority has a lot less control over the operation of the road, and will therefore seek assurances with respect to its operational management. Here, too, the cost advantages of collaborating are generally easy to calculate, taking into account the risks associated with the dependence on the partner. The collaboration hinges on the fact that the supplier is better able to plan, organise and finance certain activities. The specificity of these activities makes it possible to have several suppliers bid against each other in a public tender process. The extent to which commissioning companies are open to the tendering of work in the form of alliances differs per country. When we look at the construction of infrastructure (roads, gas pipes, water purification facilities), this appear to be quite common in the United Kingdom. In the Netherlands, the Ministry of Finance has set up a knowledge centre about publicprivate partnerships, and this approach is gradually becoming more familiar. In Germany the commissioning party tends to divide the work into small functional parcels, in order to contract these out at the lowest possible cost. Public-private partnerships sometimes entail an above-average risk for the supplier as well. Imagine, for instance, a construction company that not only undertakes to build a road, but also to be responsible for its maintenance, the financing, and its operation. This clearly creates a strong dependency on the commissioning public authority, which for example 51