Last Updated on August 17, 2021
The Market Demands Partner Ecosystems
A strong partner ecosystem can be a company’s most potent weapon in today’s hyper-competitive marketplace.
According to a recent Accenture survey, 84 percent of global executives say ecosystems are critical to their strategy and allow their organizations to grow in ways otherwise not possible. McKinsey just declared the age of “Ecosystem 2.0,” stating that effective cross-industry ecosystems can add up to a $60 trillion market by 2025. Now, that is a market expansion we all want to go after!
Yet, many organizations are stuck in the old way of managing partners by “types” and “tiers,” and operating siloed partner organizations independently of one another. For example, within the same company, one organization manages sell-through motions with channel partners, while others manage co-sell alliances, OEM, cloud, technology, service partners, etc.
“The shift from a linear channel structure to a more interconnected and complex ecosystem will fundamentally disrupt the way the IT industry is structured.”
IDC Market Perspective: “2020 Channels and Alliances Predictions”
When it comes to having the right tools for the job, while the channel team might have a partner portal to work with, the rest are left managing by spreadsheets, chewing gum, and baling wire. It’s no way to run a business.
The evolution to ecosystems has made it difficult for many companies to stay on top of fast-changing ecosystem motions, and the consequences can be severe. Often, partners are underleveraged and are now working more with competitors, so how to keep them engaged? Data is scattered, and the value partner organizations contribute is hidden from view, so how can value be surfaced? CEOs hear ecosystems are important, but they don’t see it inside their organizations, so what will make it tangible?
“IDC predicts that, by 2024, those who adopt an ecosystem business model will grow 50% faster than companies that do not.”
IDC Market Perspective: “Ecosystem Business Management Concept and Capabilities”
At WorkSpan, we’re fortunate to work with hundreds of ecosystem-powered organizations across different industries. There is one thing all of them have in common: a deep understanding that modern partnering requires an ecosystem mindset.
The old ways of managing partners in silos of channel partners, alliance partners, independent software vendors (ISVs), etc. no longer work. To master the modern ecosystem as an engine of solution innovation and revenue growth requires a fundamental shift in expectations and approach.
The Breakthrough in Ecosystem Thinking
Partnering has dramatically changed over the last 40 years. The days of one company building end-to-end solutions and then shipping boxes of CDs through distributors and value-added resellers (VARs) are long gone.
In today’s world, digital solutions are assembled from multiple providers, connected through plug-and-play APIs, delivered in the cloud, and customized with managed services. This model has completely disrupted the old “sell-through” model of distributors, warehouses, and VARs.
“76% of business leaders surveyed agree current business models will be unrecognizable in the next 5 years—ecosystems will be the main change agent”
Accenture: “Cornerstone of Future Growth: Ecosystems”
To compete today, companies must understand and apply an ecosystem approach to managing their partner relationships.
So, what are some of the breakthroughs in ecosystem thinking?
- Everyone works together as “peer partners.” Diverse and unique expertise means even the smallest players can play a lead role.
- Partnering is more than 1 + 1. To innovate and deliver complete solutions to customers, collaboration across multiple partners — 3 or more — is frequently required.
- Traditional “partner type” labels are outdated and inaccurate. VARs are becoming managed service providers (MSPs). Systems integrators (SIs) are productizing and bringing their own solutions to the market. And, hardware vendors are bundling solutions with cloud providers to create a brand-new distribution concept.
- Co-selling with partners is critical. We can no longer rely on the old, sell-through channel business model. Traditional reseller models have been commoditized out of business, and low-margin VAR businesses have reinvented themselves by offering high-value services and co-selling with their partner field teams.
Modern partnering requires ecosystem thinking, tools, and approaches to transform our partnerships into vibrant, revenue-growth engines.
The 3 Principles of Ecosystem Partnering Success
So, what are the foundational components of the transition from alliance thinking to ecosystem thinking?
Digitize your ecosystem. Digitize all your partnering processes, your collaborations, and your business reporting across all your partner types and initiatives. The changes in the way we work together, both with internal colleagues and external partners and customers, will be here long after the Coronavirus crisis.
Digitizing the way you work with your partners provides a platform to accelerate your partner motions across the globe to build solutions and drive revenue together. Digitization reduces or eliminates manual efforts, gets data to you and your partners faster, and streamlines modern ecosystem workflows seamlessly across company lines.
So much of the data partner programs run on — joint pipeline data, joint account planning, joint solutions development, joint marketing activities — has been locked in spreadsheets or slide presentations that live in someone’s inbox. Don’t squander valuable meeting time with partners by comparing data and updating action items. Use this time to build strategies to win the future rather than focus on what already happened.
Did you know that the majority of announced partnerships fail? Between 60 and 75 percent aren’t successful in the first 12 months, even when they seem to have the right ingredients in place.
This breakdown results from broken connections between people, processes, and data.
Connecting with your partners, inside and outside your company, to work together is more important today than ever before. When it comes to collaboration, shared cross-company workflows fuel well-defined business processes and help partner organizations work together more quickly and efficiently.
With connected data, manually chasing down spreadsheets is a thing of the past because your and your partners’ critical program information is always fresh and accurate. Management is data-driven, teams respond quickly to shared opportunities, partner contributions connect directly to business impact, and accurate, timely reports facilitate analysis and strategic decision-making.
By connecting people, processes, and data to a shared system for executing with your partners, you quantify your partner programs and initiatives, hold your stakeholders accountable, and build trust in your business.
3. Be Agile
With a digitized and connected partner ecosystem, real-time data, analysis, and collaboration digitally transform your partner business into a lean, agile engine of indirect revenue growth, able to navigate even the toughest market conditions confidently.
You can measure, manage, and deliver business results with the same precision, flexibility, and confidence as a direct sales organization. Grow revenue, speed time to market, and accelerate sales cycles as you lead your partner business into the future.