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
Enterprise relationship management or ERM is a business method in relationship management beyond customer relationship management.-Overview:...
and customer relationship management
Customer relationship management is a widely implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing,...
. It also exceeds the scope of the limited context of describing a liaison who aligns business interests with IT deliverables.
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
In economics and business, a network effect is the effect that one user of a good or service has on the value of that product to other people. When network effect is present, the value of a product or service is dependent on the number of others using it.The classic example is the telephone...
scale, scope, and sophistication
- constant disruption as the 'new normal' business dynamic
- decentralization of knowledge and the devaluation of traditional IP and
- increased openness of networked knowledge and
- decline of command and control management
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.
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
The BRM model identifies two roles, provider and consumer; a given business by necessity participates in both roles.
The concept of business relationship lifecycle and 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
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.
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 and in its emerging 'radical' form as a component of online community must be described.
The BRM model needs to account for and align with models of corporate governance
Corporate governance is a number of processes, customs, policies, laws, and institutions which have impact on the way a company is controlled...
, including business ethics, legal constraints, and social norms as they apply to business relationships.
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 support good governance practices.
Exchange and Reciprocity
The BRM model of exchange and reciprocity
The social norm of reciprocity is the expectation that people will respond to each other in similar ways—responding to gifts and kindnesses from others with similar benevolence of their own, and responding to harmful, hurtful acts from others with either indifference or some form of retaliation...
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.