Relationships key to growth: Gartner.

• Position: Business Briefs

Mergers and acquisitions are no longer the growth weapon they had been in recent years, so companies must look to alternatives in order to return to a growth mode.

In addition, companies should look at building relationships with other organizations to meet customer demands, says GartnerG2, a research service of technology consulting firm Gartner Inc.

"We have entered an era of real-time business that requires unprecedented agility and responsiveness. To react quickly to changing conditions, businesses must be flexible and nimble," says Cathy Spencer, research director covering strategic sourcing for GartnerG2.

"Rather than broadening scope and increasing scale through M&A, many companies are choosing to develop broad reach through new technologies and business relationships and forming integrated business ecosystems." (See cover story, page 30.)

Analysts say there are processes and functions within every business that could be performed better by other companies by building a variety of sourcing relationships. Most of today's sourcing relationships are tactical in nature, driven primarily by cost reduction.

This is expected to change over the next five years as many of these relationships become strategic and begin to include the most critical sources of business value, encompassing the notion of sharing competencies among companies for mutual benefit.

"From a business leader's point of view, sourcing...