Building and maintaining successful relationships with business partners external to your organization can make a difference. When the external business partner plays a crucial role in your business success, what is the path to find the right match and ensure a fruitful long-lasting relationship? The short answer, as with any relationship, is that it takes something to get something. So, what does it take? And what to expect to get?
This article will provide insight in ISO 44001, an international standard for business relationship management, which has laid out what it takes and what to get.
What is ISO 44001?
ISO 44001 is the international norm for Business Relationship Management (BRM), for organizations seeking guidance in managing external (third-party) business relationships more effectively and with higher success rates and longer longevity. ISO 44001 was released in 2017, underlining yet again the importance for organizations to develop, nurture and improve the capability, profession and discipline of the management of business relationships whether within an organization or between organizations.
The International Organization for Standardization (ISO), the organization behind the ISO 44001 standard, has based it on two fundamental concepts:
- A management system
- The lifecycle of a collaborative relationship
Both concepts lay the groundwork and provide the answer to what it takes to establish successful external business partnerships.
A Management System
A management system is the framework of policies, processes and procedures used by an organization to ensure that it can fulfill all the tasks required to achieve its objectives. The objective of ISO 44001’s Business Relationship Management System (BRMS) is to achieve an effective collaboration between the parties involved. ISO 44001 describes the implementation of an integrated process approach for the management of (external strategic) business relationships. It consists of a set of minimum requirements to audit (optional) an organization against effective Business Relationship Management. The standard promotes the adoption of a management system approach to effectively manage business relationships to meet the requirements for collaborative business relationship. The BRMS consists of the following components:
- Context of the Organization: what is the value the organization is seeking from an external business partnership?
- Leadership: what role does top management play in ensuring the external business partnership is successful?
- Planning: what are the preparations to ensure a smooth start of the external business partnership?
- Support: what is the support system that needs to be put in place for a successful external business partnership?
- Operation: what does the lifecycle of successful external business partnership look like?
- Performance Evaluation: how to measure the success of the external business partnership?
- Improvement: How to determine and to manage opportunities for improvement?
The Lifecycle of a Collaborative Relationship
For collaboration between organizations to function effectively, the organization seeking a (strategic external) business partner must identify and manage numerous linked activities. ISO 44001 defines these linked activities and their parameters. Furthermore, ISO 44001 promotes the coordinated integration and implementation of the business relationship management processes to provide the ongoing control, greater efficiency and opportunities for continual improvement of the collaboration between the parties.
The operation activities of the BRMS of ISO 44001 follow the lifecycle of a collaborative business relationship. The ISO 44001 standard has defined the following eight stages and main activities of each stage:
Each stage sets clear goals, references the activities to be taken and lists the deliverables and outcomes to be achieved. By executing the activities of each stage, you are setting up your business partnership for success. Essentially, ISO 44001 is providing you with an execution checklist. This list can also be used as a relationship quality assessment to help determining improvements of any existing business partnership.
Whether you are seeking compliance with or even ISO 44001 certification or are simply looking for straightforward guidance on how to establish and improve business partnerships, the standard is just one more tool to consider for your business relationship management toolkit.
More involved are steps that will impact the way you are doing business with your external partners by applying the guidance that is provided by the standard. For example, few business partnerships discuss at planned intervals, any risks that have surfaced within both organizations. Or, few contracts require frequent opportunities to be discussed to either enhance the existent service or product offering or expand on it based on (potential) needs.
What has become a more accepted topic of discussion in business partnerships is how the business processes of the parties involved interface with each other and the quality levels of these integrations.
These are just few examples the ISO 44001 standard requires to establish successful external business partnerships.
Contact us to chat about how your organization could benefit from ISO 44001. It’s a worthwhile consideration and we would greatly appreciate the opportunity to answer all your questions.