Almost every company is going through some form of digital transformation. These transformations have the potential to greatly improve your company’s ability to win in the marketplace. There are a few foundational characteristics of truly revolutionary digital transformation, which we’ve outlined here, and there are also many dimensions of digital transformation. One of those dimensions is Partner Ecosystems which, when undertaken strategically, can be a game-changer.
It is hard to go it alone and win, so partner ecosystems are often critical to the digital transformation. Partner ecosystems are about creating strategic and often risky partnerships, integrating your products and solutions onto someone else’s platform, or letting partners develop novel solutions on yours. To maximize the success of a partner ecosystem strategy, organizations must rethink how value is delivered and how human and organization systems are blended to create new and differentiating capabilities. Simply tweaking your current organizational model or extending your vendor management function are unlikely to enable your digital transformation strategy nor achieve optimal results.
As an example, Salesforce maintains one of the largest partner ecosystems with multiple categories of partnerships. There are technology innovation connections with market leaders like Google, IBM, and Amazon. They also have go-to-market partners and service providers such as Accenture and other consulting and system integration firms. In addition, software vendors and developers can develop apps on the Salesforce platform and make them available for sale using the Salesforce marketplace; the Salesforce AppExchange has over 3,000 apps available to Salesforce users. Salesforce has intentionally made many organizational choices to create this robust partner ecosystem.
Optimizing a Partner Ecosystem
At AlignOrg, we use the analogy of a Rubik’s cube, with each side of the cube representing a different aspect of the organization to be designed and aligned. To create a high-impact partner ecosystem, leaders must explore and align all elements of the organization. Below is a sample of partner ecosystem considerations for some of those organizational elements. Note that making these shifts often requires strategic and intentional trade-offs of the organization’s resources.
- The Strategy must clearly define how to leverage partners as the go-to-market arms of the organization as well as product gap fillers, enhancers, and innovators. Partner ecosystems often involve co-opetition, and many organizations have yet to figure out the right balance, whereas others see partners as integral to customer success and growth. As an example of the importance of a well-thought-out strategy for the partner ecosystem, 90 percent of deal wins at Salesforce include partners.
- New Work Processes often need to be developed. A prime example is the strategic planning process that links the build vs. buy vs. partner decisions, making the right trade-offs to fulfill the growth strategy.
- Organizational Structure is also an important consideration. Should technology partners report into R&D? Should there be a centralized partner ecosystem team to increase functional maturity and provide focus? Or should it be distributed to regions or business units? And what about industry-specific partners? In the early stages we often see organizations centralize this function and as it matures it can successfully be decentralized for specific partner types.
- Roles & Talent dedicated to understanding how partners can contribute to the organization’s strategy, identifying potential partners, developing partner programs, and nurturing selected partnerships is required. Role specialization is often needed depending on the types of partners, such as technology vs. go-to-market partners. There are also functional roles required to support the partner strategy, e.g., partner marketing experts and partner specialists in the legal function.
- Information & Technology and programs geared to making it easy to partner with your organization and grow both your business and that of your partners are now industry standard expectations. For example, the Salesforce AppExchange provides app development partners with access to over 150,000 customers. Partner portals provide partners with quick access to the latest information, training, and collaboration opportunities. In addition, the ability to measure the success of each partner and partner segment is critical to continued investment in the ecosystem.
- Leadership Behaviors and Organization Culture often require a significant shift, which is often the hardest to accomplish. While many organizations have previously successfully designed and owned all intellectual property for their products and services, as your organization advances, innovation and growth can and will come from outside your four walls. This partner innovation should be admired and embraced as key to the organization’s success.
In today’s world, businesses need to respond quickly to changing marketplace demands. Building partner ecosystems – and aligning your organization to maximize their success – can be a valuable tool to keep your organization ahead of the game.