Recently I was invited to facilitate a roundtable/workshop at the June 7, 2017 ASAP Tech Partner Forum in Santa Clara, Calif., centered on digital transformation. We heard from many experts and pioneers in the technology space about the challenges and changes they were navigating. It was like drinking from a firehose. The workshop on “Managing the Digital Experience” was an opportunity for the attendees to process what they heard and distill the nuggets of wisdom into action they could apply in their day jobs.
“How Does Partnering Change in the Age of Digital Transformation?”
We asked this in our roundtables and heard from many that partnering needs to be faster, more agile, at the Speed of Light, according to NVIDIA’s partnering model, to keep pace with the speed of digital transformation. On the other hand, others lamented that change is slow within their companies. Given the adoption rate of new digital experiences, that spells trouble for those organizations that aren’t keeping pace and don’t understand the impact on their business and subsequently how they must transform their partnering practices. Partnering is becoming more complex as customer solutions become more complex and requires the contribution of multiple partners to render a complete solution stack. As one workshop attendee put it, “It takes a village to help customers transform.”
Cloud has disrupted many traditional partners. Those partners that depended upon on-premise sales are seeing their business displaced into the cloud. The large cloud providers are serving as integration points of IT technologies and marketplaces. This also entails a business model transformation for IT purveyors as well as customers since all technology is consumable “as-a-service” and on a subscription or pay-as-you-go basis.
As traditional businesses struggle, a new generation of disruptive, new innovators is emerging. They are not just millennials, but a born-in-the-cloud generation of startups. The ease of application development in the cloud has enabled entrepreneurs to launch without all the burdensome investment in infrastructure. A good idea, industry expertise, and some programming skill are the necessary components.
We also see that applications are just razors for the channel. The channel partners who have successfully adapted to the cloud economy are delivering about four times the after-sale revenue in services over the lifecycle.
The net effect is that companies are assembling or joining ecosystems that enable customized solution stacks. These are highly verticalized and have to be relevant to driving business outcomes. A key concept that emerged from the conference discussions is that it’s not enough for IT companies to be focused on IT technologies. Business outcomes and digital transformation is dependent on deep expertise on operational technologies—in other words, the technologies that companies/customers need to run their business. Those technologies are unique and specific to each industry vertical. One example, given by GE Digital, was that of operating wind turbines. Operational technologies help orient turbines into the wind to maximize energy production. Sensors monitor the mechanicals of the turbines, to predict failure and wear, enabling the operators to be proactive in their maintenance—thus optimizing production time and managing parts and labor.
The dependence on operational technologies implies a very different partnering model for IT. It means they need the operational expertise in these digital transformation opportunities, and they need it by industry vertical. Since this expertise is so specialized, it means they need to partner. The IT expertise is still crucial, but it underpins the operational knowledge and needs to be translated in the language of business. In the wind turbine example, that means how energy production is maximized and operational efficiencies optimized.
There’s always more risk in the implementation with new technologies, so there’s more “try before you buy.” This changes how partners engage with customers. Many customers shy away from “proof of concept.” So some companies like GE Digital are casting these new applications as “first installation.” But given that the capital expenditure is lower, it’s still a lower-risk option versus the traditional model where customers make huge upfront sunk costs and pay a systems integrator by the hour until they get it right.
How are We Defining and Managing the Partner Experience?
If partnering is changing, are we, as partner managers, responsive to those changes? It seems tradition has a lot of inertia. Many traditional partners do not have the appropriate vertical industry presence, they don’t have the operational expertise, and they do not sell to the Line of Business. Vendors want to keep existing channels but they are not ready. Many vendors are going through a triage of identifying those who are committed to acquiring new skills and making investments with them but also recruiting new partners with the right experience and skills. These are often found outside of IT. They are consultants and solution providers in functional areas or industry specialists.
Traditional VARs are also accustomed to selling a pretty stable solution stack of components. Today these solutions are not hardened and highly customized, meaning not ready to scale. Cisco is addressing this through solution aggregators who package a solution for resale.
Partners need these stable solutions and host of tools and education to prepare them to address the needs of the new customer, the line of business. They need a path to ‘as a service’ business model, well programed enablement, intensive learning and funding.
There are tools and technologies available to help to manage this partner experience; however, it seems they are not applied to manage the partner journey in as sophisticated way as has been applied to the customer journey. It seems there is opportunity to digitally transform the profession of partnering.
