Ambitions are high for IT and Technology companies around the world, in driving revenue growth from digital partner ecosystems — 37% expect an uplift of 11%+ in just two years, according to a survey from BearingPoint.
The bad news is, IT and technology companies are not changing fast enough. They are failing to seize the opportunity available to them today to build transformational new partner ecosystems.
“The survey highlights two important trends. IT and technology companies have incredibly high expectations when it comes to driving revenues, innovation and productivity through partner ecosystems. Yet, today, IT and Technology companies are almost myopically partnering with companies that look exactly like themselves. They are investing in sustaining innovation and not disruptive innovation, adding features to existing products rather than finding the “white space” and creating new products and services,” said Angus Ward, CEO of Digital Platform Solutions at BearingPoint.
“Our research shows us that the real opportunities lie in the “white space” between traditional industry verticals like automotive, banking and telecoms companies. Not just to enable digital transformation, but to create new sector-specific products and services that can leverage new digital technologies,” continued Ward.
“These sectors need this disruptive thinking as new digital technologies enable them to reinvent and move into adjacent markets. That said, these sectors are now being forced to go out and acquire the knowledge and capabilities themselves to become digital masters, meaning they will be much more self-sufficient in two years time. If IT and Technology companies do not act fast, they will find they have missed this valuable opportunity for immediate and future growth. The window of opportunity is closing rapidly.”
IT and technology companies are the preferred choice for companies in other sectors like automotive, banking, insurance, telecoms and media, and transport.
This potential partnership supports new cross-industry business models, as everything becomes connected and digital.
However, only 18% of IT and tech companies are currently partnering with organisations in other sectors, according to the survey.
Instead, IT and technology companies are opting to partner with established IT companies (60%), technology providers (53%) and with Internet of Things players (26%).
>Read more on UK tech ahead of the rest of the economy
“It’s great to see that business model innovation and new products and services are a top priority for IT and Technology companies,” said Henri Tcheng, Global Leader Consumer Industries at BearingPoint.
“The sector has clearly learnt from the past and the impact of highly disruptive new technologies causing flagship brands to fail overnight. Sadly, it is also clear that there is a growing disconnect between understanding what needs to be done and actually doing it. What gives this sector scale and enables it to undertake major technology R&D, also makes change that much more difficult.”
“This is worrying, especially for a sector that competes directly with superpowers like Amazon and Google. If they continue to lag in execution, many IT and Technology companies will become defunct like many leading technology brands in the past who failed to adapt to a rapidly changing business environment.”
Similar to the rest of the world, ambitions are high for UK IT and technology companies in driving revenue growth from their partner ecosystems – 40% expect an uplift of 11%+ in just two years. A further 35% anticipate 16%+ growth and, of that, 15% await a huge 21%+ revenue bump.
But only half (50%) of the UK IT and tech companies surveyed currently have a partnership ecosystem in place. The other 50% are still in the planning phases for both defining their digital strategy and introducing a partner ecosystem.
Also, only 30% of UK IT and tech companies are fully engaged in the overall development of business model innovation and new digital offerings.
To drive innovation in the face of digital disruption, 85% of UK companies in the tech space believe it is important to change business models to underpin growth – 50% see business model innovation and launching new products and services as a core part of their digital strategy.
It’s all about the tech
The challenge facing UK companies in managing and enhancing their partner ecosystem are technological in nature – 40% are struggling with a complex IT environment that cannot support the minimum viable product or fail fast concept needed to succeed.
A further 25% don’t believe that they have the right technology and platform to manage the partner ecosystem, despite 85% agreeing that this is an essential requirement for success.