Business Relationship Management (BRM) in 3 minutes from APMG International
20th December 2018
Business Relationship Management stimulates, surfaces and shapes business demand for a provider’s products and services and ensures that the potential business value from those products and services is captured, optimised and recognised.
The concept of Business Relationship Management (BRM) is related to and employs the techniques and disciplines of Customer Relationship Management (CRM). However, while CRM most often refers to a company’s external customers, the BRM typically deals with a company’s internal business partners and an internal provider’s products and/or services.
While BRM has its roots in CRM, it has come to mean different things to different people–often depending upon the specific industry context. For example, in banking and finance, the Business Relationship Manager manages and maintains current business relationships and seeks new accounts. Banking BRMs are typically responsible for a portfolio of small to mid-sized businesses. In other industries, the label “BRM” has come to be a euphemism for “account executive” or even “salesperson.”
The BRM Discipline rests on solid research-based foundations verified and enhanced over a decade of successful implementations in leading organisations across the world. Proven to be equally effective for a wide range of internal providers including Human Resources, Finance, Legal, external service providers and others, BRM practices have enjoyed widespread adaption in IT. BRM implementations rate in IT services has quickened significantly since 2011, when the BRM role and corresponding processes have been formalised as an Information Technology Infrastructure Library (ITIL®) best practice and an ISO/IEC 20000 IT Service Management international standard requirement.
The Practice of Business Relationship Management embodies a set of competencies (e.g. knowledge, skills, and behaviors) to foster an effective business value-producing relationship between a service provider and its business partners. These competencies can be leveraged through organisational roles (e.g. in an IT organisation, the CIO typically has a role of BRM for the enterprise), a discipline (e.g. all business partner facing service provider roles should be skilled in Business Relationship Management), and an organisational capability (e.g. a service provider organisation should be effective in shaping and channeling demand to the highest business value opportunities).
The BRM Role is a crucial link between a service provider and the business acting as a connector, orchestrator, and navigator between the service provider and one or more business units.
The House of BRM illustrates three key aspects of Business Relationship Management:
1. The “foundation” supports the BRM role and ensures it has the competencies to be effective and deliver value to both the provider organisation and its business partners.
2. The “pillars” define the BRM space in terms of Core BRM Disciplines: Demand Shaping, Exploring, Servicing and Value Harvesting.
3. The “roof” of the House of BRM protects Business Relationship Management as a key aspect of provider capability. It does this by ensuring clarity around how the role, discipline and organisational capability of Business Relationship Management in the context of the Provider Strategy and Operating Model.
Four Core BRM Disciplines
- Demand Shaping stimulates, surfaces and shapes business demand for provider services, capabilities and products. It ensures that business strategies fully leverage provider capabilities, and that the provider service portfolio and capabilities enable business strategies. Most importantly, Demand Shaping is focused on optimising the business value realised through provider services, capabilities and products—that low value demand is suppressed while higher value demand is stimulated.
- Exploring identifies and rationalises demand. Business Relationship Management helps sense business and technology trends to facilitate discovery and demand identification. Exploring is an iterative and ongoing process that facilitates the review of new business, industry and technology insights with potential to create value for the business environment. The key benefit of this discipline is the identification of business value initiatives that will become part of the provider portfolio of services, capabilities and products.
- Servicing coordinates resources, manages Business Partner expectations, and integrates activities in accordance with the business partner-provider partnership. It ensures that business partner-provider engagement translates demand into effective supply requirements. Servicing facilitates business strategy, Business Capability Roadmapping, portfolio and program management.
- Value Harvesting ensures success of business change initiatives that result from the exploring and servicing engagements. Value harvesting includes activities to track and review performance, identify ways to increase the business value from business-provider initiatives and services, and initiates feedback that triggers continuous improvement cycles. This process provides stakeholders with insights into the results of business change and initiatives.
Any business professional or organisation wishing to better stimulate, surface and shape business demand for a provider’s products and services and ensure that the potential business value from those products and services is fully captured, optimised, and recognised.
Scope and constraints
With its focus on improving relationships among business partners and maximising business value, the principles of the art and practice of Business Relationship Management are equally relevant to anyone engaged in business—anyone from rank-and-file employees to C-level executives. If maximising business value realisation of resources spent is of any concern to you, BRM is a discipline, which will help you to achieve your objectives.
Although 2011 editions of ISO/IEC 20000 standard and ITIL® best practices rekindled the public interest in Business Relationship Management, their scope is limited to IT and the guidance they provide is most effective in the initial stages of BRM capability implementations and at the lower levels of its maturity. To be truly successful in rolling out and maximising the potential of BRM capability, organisations should follow a much more holistic approach, one developed, promoted, and constantly refined by Business Relationship Management Institute.
Source: APMG International