Strategic Partnering Agreement – Most Common Problems Without It

Strategic partnering agreement is an important term you will encounter especially between an MSP partner and an IT vendor. The managed service provider ecosystem is becoming a lucrative and promising niche. However, it also comes with competition and challenges. Entering into strategic partnerships is the first step to having a mutually successful and beneficial collaboration.

Strategic Partnering Agreement

Fundamentals of Strategic Partnering Agreement

An overview of what this contract is all about is essential to help you start on the right track. Success in the MSP environment is not only based on how well you deliver your services. It is not solely based on how innovative your IT solutions are. You need to have the right collaborative efforts with a partner that shares the same visions and drive for success.

A strategic partnering agreement is entered into between the IT vendor and MSP partner sharing their resources. These two separate entities work together in pursuit of a common goal. They primarily aim to achieve the benefits for their customers or clients while ensuring lower operation costs.

In the present MSP ecosystem, strategic partnerships are for both small and large businesses. The adaptation of strategic partnerships is to ensure the maximum growth and gain of the parties involved. Just like any other contract, the partnership’s terms and conditions are set into stone.

Main Problem: No Mutual Benefits

As for the underlying principle, two non-competing businesses enter into a strategic partnering agreement for mutual benefits. You will never partner up with an MSP that will not have any advantageous impact on your IT business. Both entities reciprocate each other or even add more quality to their offered services. The end result is helping each other reach their respective goals for success.

In an MSP ecosystem, the partnership usually compensates what another business entity is lacking or has limitations. For instance, IT vendors offer technological solutions or capability for MSP partners. It is your goal as an IT specialist to rush to the rescue and provide whatever is unavailable in-house. This is called the system of give and take, promoting growth and benefits for all partners.

Common Mistakes with Partnering Agreement Construction

So, how do you create a mutually beneficial strategic partnering agreement with your potential MSP partner? IT vendors must learn the basics of ensuring a satisfactory and frictionless partnership and avoid the following lapses:

Mistake #1: Unclear Goals

Having a crystal-clear goal is vital for a remarkable strategic partnering agreement between IT vendors and MSP partners. As an IT vendor, you need to know what you want to achieve through this strategic partnership. For instance, are you looking for access to a new or growing market? Do you have a short-term or long-term objective?

Identifying your goals is the key to choosing your potential partners as well. This will give you a guideline to make your search easier and foolproof. Set your goals so that you remain on the right track in this somewhat evolving ecosystem.

Mistake #1: Unclear Goals

Mistake #2: Choosing the Wrong Partners

Finding a potential MSP partner is not the main problem that IT vendors deal with. It is in choosing the right potential partner that is quite a daunting task. Remember that a strategic project partnering agreement can only be successful with the right parties involved.

Choose a partner that not only meets or exceeds your expectation. It should be a business partner that shares the same strategy and values, which are relevant to achieving your goals.

Mistake #3: Skipping a Fact Check

A strategic partnering agreement is a binding and legal contract between the parties involved. Thus, before constructing a frictionless and mutually beneficial contract, do a fact check first. Do your due diligence because this could save you a lot of time, money, and worries in the future.

You can look up the MSP partner that will be your potential collaborator. Start with the Internet to see if there are reviews and profile backgrounds available. Know how strong their company is, their market reputation, and so on. You can also join a reputable MSP community for a more secure search. This is a great venue where you can establish your network and find the best MSP partners in the business.

Mistake #4: Creating a Lame Proposal

Put your best foot forward when constructing a strategic partnering agreement. Your proposal should show your potential partner that it is mutually beneficial for you both. MSP partners cannot refuse a contract that clearly shows the advantages they are going to reap in the future.

Creating a win-win proposal that highlights mutual benefits will also boost trust in the strategic partnership. It is showing the other party that you are not in this for selfish intent. Happy and satisfied partners double their efforts and productivity because they know how this will do them good as well.

Mistake #5: Failing to Negotiate

Negotiation is essential to a strategic partnering agreement. A healthy, transparent, and honest contract helps you negotiate. You need to be clear about your limitations as well as your expectations from this partnership. Thus, every salient detail should be written down. This will also help you avoid any disputes regarding the contract, which may arise in the future.

Mistake #5: Failing to Negotiate

The Results of a Poor Strategic Partnership Agreement

Before you can draft a partnering agreement sample, it is essential to know something like the Memorandum of Understanding. This is just like a business handshake, highlighting the critical points of the partnership. Without the Memorandum of Understanding, your contract will have no take-off point resulting in the following:

Misunderstanding Goals/Objectives

IT vendors should be clear and straightforward in outlining why the partnership is being considered in the first place. The strategic partnering agreement should also reflect the perceived objectives and mission of the alliance. Without an outline of the operating principles, it will surely be chaotic. These principles will guide and solidify the communication and trust between the involved parties. Knowing the financial and strategic goals of the participants puts everyone on the same page.

Overlapping and Missing Essential Duties

The MSP ecosystem is becoming more diverse and comprehensive with growing industry demands. Thus, the strategic partnering agreement must facilitate the designation and delegation of responsibilities. It should clarify as well as specify the targets and objectives of the partnership.

Have a contract that is quite comprehensive as it includes the expected timeframe as to the achievement of the objectives. Others to be specified are the expected major obstacles of the agreement. The responsibilities must be outlined so that it is clear as to who will be doing what.

Confusing Business Target

IT vendors should have a clear and transparent program addressing the solutions or services to a specific project. Identify your target niche like the user groups or regions as well as the excluded domains. The MSP ecosystem is quite diverse since some service providers offer only IT solutions. However, others have a more extensive service package that demands more IT programs. Draft your strategic partnering agreement reiterating these salient elements.

Poor Decision-Making

A strategic partnering agreement is unique from any other contract out there particularly in terms of the method for decision-making. Thus, MSP partners and IT vendors should highlight this in the contract. It should include the description of who is the expected authority and what types of decisions should be made. Such decisions and who reports to whom will also depend on the circumstances. A good contract will carefully detail your partnership’s decision-making flow.

Unreliable Response to Future Service Issues

The strategic partnering agreement shows the perceived risks. It details how such risks will be handled and the people responsible. They should be in charge of risk assumption as well as problem-solving. Moreover, it should reflect the expected rewards such as cash flow, technology, and new product and market.

The division of profits shall likewise be reflected. Without a strong contract, your partnership is doomed to poor-rated services, which is detrimental to your business. Your client should have full confidence in you. You can show this through a solid strategic solution in delivering your services. Most importantly, your agreement will highlight such plans.

Partnering Agreement Template

IT vendors and MSP partners can find a wide range of samples as to a strategic partnership contract. The following is just one of the many templates that you can consider using for your future partnership ventures:

MEMORANDUM OF UNDERSTANDING:
Strategic Partnership Agreement

 

This Memorandum of Understanding (MoU) dated xxx is made between:

(Name of IT Vendor)

and

(Name of MSP Partner)

 

1. Purpose

The purpose of this MoU is to outline (state your purpose here)

2. Scope

The scope of this MoU covers (state your scope of activity here)

3. Expectations and Benefits

Under the terms of this MoU (state your objectives and key responsibilities)

Final Thoughts

IT vendors and MSP partners enter into a strategic partnering agreement for mutual benefits and success. It is an important alliance because such advantages are deemed impossible to achieve independently. The best way to start finding the right strategic partnerships in the business is by joining the ForzaDash community. Call now for more details!

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