A little while ago I touched on the various benefits of collaborating with customers, whilst various reports and papers have explored collaboration with suppliers.  It’s often easy to assume that collaboration is something that only occurs between employees inside an enterprise, but of course the alliances and partnerships that companies strike up between themselves are significantly older than the recent enterprise social networking trend.

For instance, a University of Illinois study, split across two papers, argues that a lack of collaboration between big players at either end of the supply chain is preventing companies from gaining efficiencies in a whole host of areas.  Working with external stakeholders is therefore something many organisations can derive benefits from.

Collaborating with external partners is traditionally thought to bring you one of three main benefits:

1. Information – this includes insights on how to produce better products or services, create efficiencies or improved marketing.
2. Power – power typically comes from having a team of partners able to help and support you in your operations.
3. Cooperation – cooperation meanwhile allows you to pool resources or knowledge, therefore achieving more collectively than you could individually.

In essence, tapping into a partnership network can help your company derive a competitive advantage in the marketplace, with the stronger your network, the larger your advantage.

When looking at collaborating with external organisations, the relationships typically form one of three distinct types.  I’ll be looking in more detail at each of these in subsequent posts throughout this week, but I wanted to introduce them here first.

• Level 1 partnerships – at this level, the collaborations are fairly straightforward and typically involve sharing resources and capabilities between one firm and another.
• Level 2 partnerships – the next level up sees an increasing amount of information shared in a timely manner so that cooperation can be more effective.  It also sees the collaboration utilised to increase the power of all parties.
• Level 3 partnerships – the final level sees a firm strategically place itself in the centre of a valuable network and uses that position for competitive advantage

Each of these three will be expanded upon in the coming days, but I’d love to hear how your own organisation approaches external collaboration, and whether any of these sound familiar to you.