Business relationship management

Business relationship management is a formal approach to understanding, defining, and supporting a broad spectrum of inter-business activities related to providing and consuming knowledge and services via networks, with an emphasis on the emergence of online networks as a primary medium through which business relationships are conducted.

Business relationship management (BRM) is distinct from, but related to, concepts such as enterprise relationship management and customer relationship management. It also exceeds the scope of the limited context of describing a liaison who aligns business interests with IT deliverables.^[1]

BRM seeks to provide a complete and holistic model of business relationships and business relationship value over time, in order to make the various aspects of business relationships both explicit and measurable. A mature BRM model will ultimately support both:

• strategic business research and development efforts
• tools and techniques that implement BRM principles

BRM as a discipline seeks to enable all stakeholders to develop, evaluate, and leverage high-value relationships throughout the network.

Indicators and drivers

The BRM concept is an outgrowth of observation and analysis of the transformational effects of certain features of the emerging network economy, including:

• advances in network scale, scope, and sophistication
• constant disruption as the 'new normal' business dynamic^[2]
• decentralization of knowledge and the devaluation of traditional IP^[3][4]
• increased openness of networked knowledge^[5][6]
• decline of command and control management^[7]

The impact of these trends on business relationships provides an opportunity to discover and align both principles and practice as the foundation of a distinct discipline.

Modeling approach

The approach to the BRM modeling process is to identify and describe various aspects of business relationships in terms of:

• defined relationship types; each type having a specified purpose, associated roles, and a measurable outcome
• a set of processes that make up the business relationship lifecycles
• a set of principles that apply specifically to these lifecycle processes

Artifacts, assets, and products

Assets and products derived from the BRM model will eventually inform and support:

• a practice derived from applying BRM principles, analyzing outcomes, and refining over multiple iterations
• tools and methodologies (platform) derived from successful practice that further support and optimize BRM as a discipline

BRM relationship types

The BRM model will identify and categorize business relationships according to type:

• each type has a discrete and clear purpose, characterized by a unique combination of roles, functions, and activities
• instances of each type can be identified, quantified, and analyzed

BRM roles

The BRM model identifies two roles, provider and consumer; a given business by necessity participates in both roles.

BRM lifecycles

The concept of business relationship lifecycle^[8][9] builds on interest in charting the complexities of changing values of business relationships over time in contrast to simple transactional value.

BRM lifecycles include:

• a macro grow and sustain cycle, characterized by one-to-many and many-to-one relationships. Activities in this cycle are more or less continuous and overlapping (include marketing, customer/product support-maintenance, online community) and have indeterminate outcomes
• a micro engagement cycle, characterized by one-to-one, discrete or transactional, with discrete cycles and negotiated outcomes

BRM principles

Measurement and analysis: The goals of BRM require that its concepts and principles be identifiable and measurable; that is to say, given the model, a person should be able to identify the business relationships that they are engaged in, and measure them (quantity, duration). The same holds for any aspect of BRM, such as type, role, or principle.

Purpose: Every business relationship has a purpose that requires participation of multiple roles to accomplish. The purpose of a given business relationship is discrete and quantifiable.

Reputation and trust: The BRM model should attempt to model and quantify the related concepts of reputation and trust. Every relationship, and every interaction within the relationship, contributes to reputation. Reputation functions to mitigates risk and reduce friction within business processes. Concern for reputation incents good behavior. Absence of trust will cause a business relationship to fail. Trust increases efficiency and enables conflict resolution. The relationship between trust as a traditional core concept^[10] and in its emerging 'radical' form as a component of online community^[11] must be described.

Governance: The BRM model needs to account for and align with models of corporate governance, including business ethics, legal constraints, and social norms as they apply to business relationships.

Boundaries: The BRM model should define the boundaries of business relationships within the larger continuum of interpersonal relationships. In addition to legal and ethical (governance) issues, are there optimal levels of personal connection, and do they differ by type, role, or other attribute? The model should help define boundaries that optimize effectiveness while supporting good governance practices.

Exchange and reciprocity: The BRM model of exchange and reciprocity must extend traditional dimensions to account for not only financial exchange, but also time, money, knowledge, and reputation that are a key feature of business relationships.

See also

• Right-time marketing

References