Forming a consortium has been an ancient business practice followed by large business groups. Businesses today consider teaming up as an essential means to diversify the risks associated with the project as well a means to expand their expertise and knowledge base by sharing of knowledge and expertise. Consortium are lightweight operations typically formed to achieve an objective by a group of people.
Forming a consortium is a big set up, it requires you to review every minute detail before you go ahead with your decided partner. In forming a consortium your very first step is to
Forming a consortium
Identify the objective:
Even before you start contacting for partners, give a thought to the primary objective of setting up a consortium. It is very important to have a detailed plan of action with expertise you need to get there. Form a core team that will help you with setting up an objective for the consortium
Identify potential Stakeholders:
Choose a partner that will add value to strategic decisions of your consortium. while deciding on potential partner your focus should be on their excellence and how beneficial they might prove to your business growth. Choose a business partner from your business areas. You might find your prospective partner by contacting larger organization from your business areas, attending business meetings, economic forums etc.
Initial meetings are very important as it is the first step to building of a long-term relationships and trust. The agenda of the initial meeting should be your action plan for setting up an consortium. focus on your thought behind forming a consortium, your expectation from the group, business models and other general discussion. Remember to keep a participative and flexible approach towards the meeting. It is important to give all the members a chance to voice their opinion.
Identify Practicalities to run consortium:
Practicalities of running a consortium involves identifying resources of finance, approval from the boards as well as forming of a core group. Important activities carried at this stage will be contacting the financers, deciding on the member contribution, membership fees, approval from the respective board, as each member has a separate governing body it is necessary to take the approval from the respective board members before entering a consortium. Lastly formation of core group with expertise, skills and capabilities to run the consortium successfully.
At this stage, development of consortium takes place with drafting of terms of reference, vision statement, mission statement as well as confidentiality criteria over certain common issues of the member group.
Compatibility analysis of Consortium:
In order to gauge the compatibility of your consortium, you need to undertake a strong compatibility analysis of your members and partners. Firstly, a set standard is prescribed for the members as well as the partners. Determining of standard should depend on benchmarks that each partner should meet. An assessment process to monitor how they meet the benchmark and lastly support procedures for members not being able to meet the benchmark. These standards are need not be imposed on the member country rather should be accepted collectively by the members.
Secondly, understanding of strengths and shortfalls of the consortium. Assessment of the strengths should be based on people assets like; skills and expertise, staff and volunteers etc. Tangible assets like; property, money etc and intangible assets like reputation, contacts, or intellectual properties.
The above mentioned are some key concepts that you need to bear in mind while forming a consortium and to run it successfully.
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