Scaling your business by growing a partner ecosystem

PJ Bishop, Vice President of Partners, Services for Africa and Middle East at Sage, explains how to scale the business by growing a partner ecosystem.

In today’s complex and fast-moving business environment, even the most prominent businesses know they cannot do it alone. Look at Amazon or Microsoft, for example, and you’ll see they depend on a vast network of resellers, integrators, independent software vendors (ISVs) and other business partners to succeed.

The idea of partnering isn’t new, but it has evolved to the next level in the digital economy. Digital technologies like cloud-based platforms, application programming interfaces (APIs), big data and modern collaborative tools like Slack and Microsoft Teams make it easier than ever for companies’ networks to cooperate to solve each other’s problems and those of their customers.

These intricate, interconnected fabrics of organisations that sometimes compete and sometimes collaborate are known as ecosystems. Investopedia defines an ecosystem as “…the network of organisations – including suppliers, distributors, customers, competitors, government agencies, and so on – involved in the delivery of a specific product or service through both competition and cooperation”.

The core idea that separates an ecosystem from the older business partnership and competition models is acknowledging that each organisation affects the other. Their relationships are constantly evolving, and each participant in an ecosystem needs to be agile and adaptable to thrive. Building and participating in the right ecosystems can thus be a significant competitive edge.

A Google Cloud survey of 1 000 CIOs of large organisations, conducted in partnership with Oxford Economics, found that ecosystem strategies deliver numerous direct benefits, including customer satisfaction rates, strong revenue growth, and better performance across processes such as supply chain management and regulatory compliance.

A robust ecosystem

At Sage, we rely on our growing ecosystem to deliver our products and services to the market and enhance our proposition’s value. We could not do what we do without our ISVs, strategic alliances, value-added resellers (VARs) and cloud service providers (CSPs), together with accountants and corporate partners.

The benefits of building or being part of an ecosystem are significant. Companies in an ecosystem can grow together, reaching more customers and delivering a complete solution to them in cooperation.

Benefits across the board

So, how does a business participate in an ecosystem? A first step is to audit the status quo – who are its customers, who does it partner with, which assets and propositions can it offer, which opportunities it misses because of gaps in its product set or channels to market? From here, business leaders can evaluate the broader market to understand who the competition and potential partners are.

It’s also essential to draw up a strategy for joining ecosystems or onboarding partners. For partnerships that will be core to the business, like choosing a core vendor to represent as a VAR, a company will want a robust contract with clear, mutually beneficial terms. Other ecosystem partnerships may be more transactional, for example, using APIs to create an app to sell through a vendor’s marketplace.

Here are a few practices to forming ecosystem partnerships:

• Seek partners where there is a definite win-win and a mutual interest in growth.
• Ensure compatibility of each organisation’s processes and culture.
• Trust is key if the partnership involves sharing of data.
• Clearly define each party’s role and responsibilities in the agreement.
• Be flexible and accept that change is inevitable.

Mastering the moving parts

There are numerous moving parts in today’s complex world, and few organisations can independently solve customers’ needs. Companies can accelerate time to market, scale up rapidly, drive innovation and enrich their value proposition by acting as an ecosystem. In fact, in the future, success won’t be down to a single company’s strengths alone – but the power of their ecosystem will determine it. Deciding which ecosystems to be part of is one of the most important decisions a business can make in the digital age.