1. Convince Your Boss
Even though most CEOs might tell IBM's survey team that they welcome external partnerships, they still have to be convinced that such things are good for business. Three factors that count: good timing, a solid ROI and an immediate business need.
Griffin and Davis conceived the disaster recovery plan for LMU and Bowdoin in 2005. They were still brainstorming when Hurricane Katrina devastated the Gulf Coast in August and forced colleges in its path, such as Tulane in New Orleans, to shut down. Disaster recovery became a hot topic. "All of a sudden people were interested in it," Griffin says. "So we took it to our senior administrations." However, cost became the overriding factor, Bowdoin's Davis says. "I'd been thinking about what it would cost to do disaster recovery with a vendor — you just couldn't do it."
In the case of Nymex, CEO James Newsome was keenly aware that the company had put significant time and money into ClearPort. But at the time, in 2005, Nymex developers were still putting the system through its paces. So when Gaer made the case to collaborate with CME, he emphasized the benefits of speed and economics. "I said that CME spent $US7 billion in seven years building a worldwide distribution market for Globex. If we put our products on Globex, then we'd have the immediate distribution we needed." That confirmed for Newsome that collaboration was the right decision.
There were some sticking points during negotiations. For example, Nymex worried about ceding some control over its technology to CME. In exchange, Nymex wanted CME to sign a non-competitive agreement promising not to list futures contracts that resembled Nymex's. CME eventually agreed, and the deal went forward. (In June, the companies quashed rumours that they were discussing a merger after the Bloomberg news agency reported Nymex was exploring a sale with three potential partners, including CME. Executives from both companies said that they plan to continue their partnership as independent entities.)
2. Convince Your Staff
Once Gaer worked out the deal with CME, he had an ugly job ahead of him: telling his team of developers who had built ClearPort that it was being shelved in favour of Globex. "It was one of the hardest things I had to do," he says. "We had our own system that we believed was bleeding edge. There was a lot of pride of ownership."
Gaer faced a common problem with collaboration, says Forrester's Radjou, as IT staff let go of their role as inventors. "You don't want them to think they're not good at what they're doing," he says. Providing them with ways to make valuable contributions to the project is critical.
The Nymex developers weren't blindsided by the news of the partnership — there had been rumours of the deal in the marketplace — but there were, Gaer believes, bruised egos. So in town hall meetings, he went out of his way to make it clear to the developers that their technological work was sound. Then he could explain the business imperatives.
Of course, not everyone was sold right away, so Gaer encouraged them to vent and to challenge him. "[I would] walk to the bottom of the floor and say, Ask me what you want. Say the emperor has no clothes." He also established an open-door policy for his staff to speak with him privately if they didn't feel comfortable doing so in the open town hall forum. Gaer believe that his openness and willingness to hear criticism helped the staff trust the decision.
Gaer and Jim Krause, CME managing director and CIO, also gave the Nymex IT department an active role in the integration with Globex. While CME, which deals primarily in financial futures, wasn't new to energy futures (it had once listed a few Nymex products) it still relied on Nymex IT's expertise to help with the migration.
3. Divide the Work to Conquer the Project
After LMU and Bowdoin got their staff and leadership teams on board, the next step was to assess the strengths and weaknesses of each organization. The approach was simple: Whichever organization was better-versed in a particular technology would help its partner implement it. Griffin and Davis's ultimate goal was to replicate each other's IT departments as much as possible — from their Web infrastructure to e-mail, to servers. By mirroring each other, they could easily take on each other's operations if a disaster occurred.
According to Griffin, Bowdoin had a good handle on VMware, but LMU had a better grip on Microsoft Exchange. So they helped each other deploy the technologies they knew best, mixing and matching until their IT departments were like twins. "Now you can go right down the list of places where we match," Davis says.
4. Establish Metrics for Success — As You Go
Collaborating with partners in one's industry often breaks new ground, and measuring the outcome can be difficult. "We were looking for measures of success and we found that we sort of redefined them as we went along," says Griffin.
One way to ensure that the partnership succeeds is to mind your partner's goals. For example, while both LMU and Bowdoin wanted a new disaster recovery solution, they needed it for different reasons. Bowdoin would need LMU's services frequently for short periods due to storms that cause power outages several times a winter. LMU, on the other hand, will most likely need Bowdoin only in case of a large earthquake or terrorist attack. (The LMU campus is near Los Angeles International Airport, which has been targeted by terrorists in the past, including an attempt, thwarted by US authorities, to bomb the airport on New Year's Eve 1999.) The partners designed each other's emergency sites to reflect the frequency and magnitude of their needs. For instance, LMU would need the ability to conduct all classes remotely for several months in the event of a major disaster. As such, it would need to retain access to one semester of a fully populated course management system. Bowdoin, however, had no such need. Each scaled its storage plans accordingly.
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