Business Misalignment Between Technology Providers and System Integrators

We are having a conversation on this very topic.? Come join us ?May 21, 2024, at 2:00 pm EDT for?Rumble in the Jungle in a LinkedIN Live event:

https://www.dhirubhai.net/events/rumbleinthejungle-episode2-busi7193753723167236096/theater/

The dichotomy between the business models of technology providers and system integrators (SIs) has long been a source of misalignment in their partnerships. While technology providers aim to acquire as many new customers as possible, driven by investor and board demands for growth, SIs generate most of their revenue through the "land and expand" methodology, placing consultants one by one into customer organizations with a plan to grow inside that specific customer.? I mean, “Why Wouldn’t You?”

?

Challenges and Pain Points

One major challenge stems from the lack of loyalty and brand commitment from SIs, who wish to remain agnostic and flexible in choosing the most appropriate technologies for their customers. This creates a lack of alignment with technology providers seeking to promote their specific products and solutions. Additionally, the introduction of new technologies, such as generative AI, has exacerbated the need for SIs to constantly upskill and adapt to meet customer demands for implementation support. This can strain partnerships as SIs struggle to keep pace with the rapid pace of innovation.

?

Successful Partnership Alignment Strategies

Effective partnerships have demonstrated successful alignment by sharing risks in marketing efforts and collaborating to find new business opportunities. This approach fosters a sense of shared responsibility and incentivizes both parties to work towards common goals. Engaging third-party facilitators can also help manage potential conflicts of interest and maintain balance between partners. These neutral entities can oversee opportunity identification, ensure fair treatment, and promote harmony in the partnership.

?

Adapting Business Models for Better Alignment

To address the misalignment and foster more successful partnerships, both technology providers and SIs should consider adapting their business models:

?

Technology Providers:

·????? Develop comprehensive partner programs that incentivize SIs to prioritize and promote their solutions.

·????? Invest in training and enablement resources to help SIs stay up-to-date with new technologies and implementation best practices.

·????? Explore creative revenue-sharing models or co-selling initiatives that align incentives and foster a sense of shared success.

?

System Integrators:

·????? Establish dedicated practice areas or competency centers focused on specific technology providers or solutions.

·????? Collaborate with technology providers on joint marketing campaigns, case studies, and thought leadership content.

·????? Participate in technology provider partner advisory councils to provide feedback and influence product roadmaps.

?

By adapting their business models and fostering closer collaboration, technology providers and SIs can better align their goals, share risks and rewards, and deliver more seamless and integrated solutions to customers.? IBM practically invented the concept of tech partnerships and has one of the most successful ecosystems capable of integrating everything IBM produces from analytics, to cloud computing, and AI. SAP has similar success with their ERP SI’s.? Microsoft partnership programs demonstrate strong commitments to their partners across a multitude of technologies and industries.

?

No program is perfect and all programs will never be.? Managing the complexity of these relationships, targeting solutions with industries and using smart sales strategies are foundational to keeping relationships strong and healthy.?