The art and science of brokering relationships in the digital economy

Tony Evans Profile picture for user tony.evans October 25, 2016
Summary:
Digital transformation requires a new kind of partner. As SAP's Tony Evans writes, you need a partner that can help you think differently about data - and challenge industry assumptions.

deal-making
For companies imagining the next chapter of their businesses, the digital future holds great hope and expectation. I have had the privilege of working closely with many companies, meeting with executives ready to transform their business. Time after time, conversations with these leaders are fascinating and exciting—and the attitudes towards disruption and change are different even from discussions we had only two years ago.

In the past, technology was the center of conversations. Most questions were answered with, “You need the right technology.” My team and I have a very different approach now. Enabling technology is only part of the solution. What we promise, and deliver, for companies that want to move to a digital model, or to drive transformation into their business, is to bring together the right people at the right time with the right experience to help them find answers.

In the digital economy, the technology that a partner provides is inherently valuable, but success depends on the relationships a partner can broker. Depending on who a partner can bring to the table to advise, to share, and to create the vision, can mean the difference between disrupting and being disrupted in a data-driven world.

Digital partners have the advantage of working with many entities that are in the process of transforming, and they have first-hand experience in the new business structures, rules, and models for success. Together, digital partners build a team with experts from lots of arenas, who understand best practices, models, and methodologies, plus they share both fears and war stories. These honest, boundary-pushing conversations spark the ideas that turn into innovative, creative solutions.

Change management is central to success. Creating a vision and a guiding coalition of people who will challenge, support, and innovate toward that vision, are crucial for mature organizations to be able to create lasting impact. Very often, the vision requires a pivot or fundamental change in the business model, whilst also fulfilling the needs of current customers and current employees.

Get this right, and not only does your data become your most valuable asset, but the historic antibodies to change, will be overcome by the momentum and belief, in the change in your model. I have always held John Kotter’s approach to change management in high regard. In his book “Leading Change,” Kotter refers to the eight-step process that successful change needs to follow. I recommend that you buy a copy and read the book – it’s a great blueprint for success.

Data is a catalyst for new value chains

As mentioned, data is central to a digital business, and it impacts everything that a business does. When businesses are data driven, they no longer view data as having a single purpose that supports CRM or creates finance reports. Data becomes multifaceted and flows into every business unit, often changing business models, creating new revenue streams, and improving operations.

To transform data from single purpose to multipurpose and realize its full business value, companies need to turn to a digital partner that can guide them toward their digital core and assist in quantifying the value that a digital core will deliver to their business. The key here is to understand that the first innovation rarely delivers value. Henry Ford, as he viewed the production line of Ford motor company, for example, could have foreseen the proliferation of the motor car. He could not have predicted the creation of Walmart.

Digital partners think differently. They don’t focus on fixing a single business process in a single layer of the company; rather they help you reimagine the business model and value chain—both intra-company and inter-company. The most successful transformations focus on the customer experience, operational efficiency, employee experience, or leveraging data for the betterment of the supply chain partners up and downstream of the transforming company.  Having partners with that kind of knowledge, first, helps you understand the end-to-end supply chain and all the impacted people, systems, and organizations.

Secondly, a digital partner brings together non-linear relationships that create new value chains. Let me explain what is possible. Recently, my team and I met with the transportation agency of state in Middle America to discuss how to improve the safety on roads and highways. The state has stood near the middle of the stats for its safety record during the past couple of years and wants to leverage its data to prevent motorist accidents and deaths to improve the citizen experience. It’s not the first time the state has turned to data to improve the quality of life for its residents, as data-driven decisions and root-cause analysis have been big factors in improving the state’s infant mortality rate during the past few years.

We joined the state’s department of transportation with the Association of Global Automakers, who focus on safety and innovation. Porsche Consulting (MHP) added their expertise, alongside Intel and other partners. After many discussions we have begun building data models and using data analysis for root cause analysis on the road incidents. More data than you can even imagine will be analyzed to understand what happens before and after road incidents so we can work with the state to prevent them, ultimately saving lives and improving the quality of living for the state’s residents.  (More digital transportation solutions are also at work keeping the roads safe throughout the world.)

The innovation that resulted from bringing this diverse group together would not have happened if we did not have strong, committed relationships with each of these parties in the supply chain. Digital partners leverage these connections to the betterment of every party in the chain. Partners don’t need to have their technologies in the middle of the companies; instead they need to be the middle of bringing them together.

In our new economy, digital partners engineer connections that cross regions, industries, technologies, and public and private sectors to create value chains that didn’t previously exist. They allow customers to start doing what they do well, which is imagining the next chapter for their business.

Old traditions can hold you back

One trend we’re seeing is customers solving massive problems and realizing their solutions are applicable to other companies. Solutions that are working in retail, for example, can cross industries and apply relevance in healthcare or financial services. The focus in retail may be creating a “segment of one,” in healthcare it may be “personalized medicine,” and in financial services, “know your customers’ customer.” The principles and methodologies will be similar, and each industry can, with the right mindset, learn from each other to the betterment of all.

Digital partners need to have the cross-industry awareness to recognize how a solution can be relevant in what may seem like an unlikely industry. Connecting a drill maker that has a predictive maintenance solution for oil and gas could have an impact on train transportation or consumer goods maintenance. When a digital partner can bring together companies that at first seem to have little in common, the cross pollination and new ideas that result are refreshing and impactful for all involved.

The world is changing, and my message to customers is, “No one technology is at the center of this picture—you are.” Find a digital partner that has an engine that will transform your business operations and drive unique relationships and create non-linear value chains. Instead of classifying yourself as, “I am a customer of…” what you need to do is to harness your team and resources and focus on transforming your business. As we all know at this point, if you’re not, somebody else will. Look for partners that can lead you to innovate and transform your business in non-traditional ways, and partners who are willing to challenge you, work with you, and expose your team to new industries and lessons… that’s when the magic happens.

End note: for more on the role of channel partners in digital transformation and the opportunity at stake, check my colleague Rodolpho Cardenuto's The $564B channel partner opportunity waiting in the cloud. I wrote about overcoming resistance to digital change in Five signs your business is ready for digital transformation.

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