How building your tech ecosystem fuels innovation and growth opportunities

CIOs are making these considerations to create alliances with a subset of strategic suppliers.

Questions to ask:

• As you plan for your industry’s transformation (or future challenges), what capabilities do you or your clients lack?
• Where are your potential partners headed, and at what levels are they investing in new technologies?
• When will you be ready to migrate into that next level of trust relationship?

During times of change, those who are able to establish trusted relationships often emerge stronger, better able to adapt to future challenges. To keep up with today’s accelerated transformation and plan for sustained growth, business leaders must find ways to develop deeper connections within their communities and work with them to construct the tools they’ll need for the future.

The value of an alliance partnership quickly became clear at the beginning of the pandemic for EY and Microsoft. EY teams were able to leverage the Teams platform and deploy it at scale across the entire organization, rapidly developing an agile and trustworthy remote working environment that may have taken months longer to set up with a standard software vendor relationship.

As businesses build their ecosystems, chief information officers (CIOs) and technology leaders can find opportunities for innovation, transformed capabilities and new products or services, as well as identify gaps that limit the potential for future innovation or scalability. While suppliers will fill some of these needs, businesses can create more value in the long run by elevating certain partners who share their strategic intents.

Working together, the ecosystem creates a combined value for the customer that is greater than the individuals can provide alone. This requires relationship management, reputation management and a shared commitment to the customer.

Key question to ask: What capabilities do you or your clients lack, and could an alliance accelerate addressing those gaps?

Pick a partner, not a technology

Whenever companies are looking to create more value, the options are to build the tools in-house, buy from a supplier community or form a strategic alliance and fully leverage that company’s capabilities.

Until recently, most companies took one of the first two routes, but as technology hurdles have come down, the mentality has shifted, and the partnering model is now taking off. However, picking strategic partners today is about much more than the specific technologies they are currently offering.  It also involves evaluating if they are aligned with your company’s purpose.

• Can they readily integrate across the rest of the ecosystem that you’re building?
• Are they willing to dedicate engineering and other resources to collaborate?
• Does their commercial approach align with your overall goals and objectives? 
• And most importantly, do they have the capability and desire to actively participate in the innovation process?

Cloud and API technology is now powering the ecosystem economy, facilitating multi-party collaboration that is both rapid and cost effective. Also enabling this change are new opinions and practices around trust and data sharing over the past decade. Rather than being wary of sharing information, companies have embraced opportunities for making more data available for decision-making – up and down the value chain. As information flows freely, automation of services has brought costs down and created new opportunities for transformation. Getting a great rate from a supplier is one thing, but how they can help you differentiate from your competitors and become more resilient is key.

Key question to ask: Which vendors have the most reliable and least expensive services that can accomplish your goals or address gaps in coverage?

Managing relationships and setting expectations

An ecosystem differs from the hierarchical supplier world, where the parties meet periodically to discuss KPIs and make sure the service level agreements are met. Partners are interdependent peers who have made joint commitments to each other and toward common goals. Relationship management is key to building this trust and distinct value.

One trap we’ve seen CIOs fall into is sourcing suppliers and vendors strategically but then managing them in silos. Without group accountability for outcomes and the ability to solve problems on a bigger scale, this ultimately leads to suboptimal outcomes.

An ecosystem thrives because of the collective value of the brands and capabilities within it. If you run a small-to-medium-size enterprise and are looking to partner with a larger organization, that dynamic may feel mismatched. Working with a systems integrator or consultant can alleviate the imbalance. This can be highly valuable, as the integrator encourages the larger entity to bring more to the table and help you piece together the tools and resources that are available.