This tutorial is targeted to practitioners and researchers with interest in increasing effectiveness of external alliances. The content and case studies dissect models to maximize innovation and R&D returns through outsourcing. Participants are encouraged to bring in specific cases they are faced with in order to extract immediate returns from this tutorial in addition to the concepts for future use. Successful organizations focus on their core competencies, to not only survive, but to emerge as even stronger players in the market place. This success requires innovating and improving products and business processes with all the internal and external resources available. The tutorial will cover the elements for a successful alliance and provide the framework for the participants to apply the concepts to their own specific circumstance. The types of relationships, structure, IP protection, subtle pitfalls, and measures of success are discussed during this talk. The Capability Life Cycle (CLC) model is used along with two case studies to demonstrate use of external alliances in successful R&D. The objective is to provide managers and educators with a fresh look at the external alliances as a tool to succeed in a challenging business environment.