Building a partner ecosystem: cooperation above competition

April 4, 2024

Written by: Mani Jabble

Traditionally, the software industry has been characterized by fierce competition and big players aiming to gather as many capabilities as possible under the same roof.  Nowadays, this view can limit the ability to adapt to disruptive technologies and changing market requirements. This is where robust partner ecosystems, a growing industry trend, come in.

For decades, a common end goal for software service providers has been capturing the market by catering to every possible customer need, in an attempt to leave competitors out of opportunities. This approach, however, is becoming increasingly difficult as it results in large and complex infrastructures that, at times, cannot react quickly enough to incorporate new technologies and keep the pace with the current fast-moving business environment.

In contrast, a partner ecosystem approach disrupts the conventional notion of enterprise competition, shifting from intense rivalries to a more adaptable and cooperative route to achieving success. Establishing partnerships represents a resource-effective alternative for companies looking to expand their product offering and access the latest technology without heavy investment or maintenance. 

Complex demands call for a new, collaborative approach

On the one hand, the rapid advance of technology, with developments like automation and digitalisation, has increased what customers expect from service providers. As a result, there are greater demands in terms of connectivity, real-time visibility, reporting, and 24/7 support. On the other hand, as more governments and tax authorities worldwide implement new mandates to combat tax evasion, businesses are forced to transform their finance processes, raising the requirements to (and the pressure on) their service providers.

With demands becoming increasingly complex, it can be challenging for one company to meet all aspects of a given project, especially for smaller or niche software/IT Service vendors. For any business, engaging in an area outside of their expertise and strengths can negatively impact the brand and the customer relationship and take focus and resources away from what they do best. This is where a strong partner strategy comes into play.

Naturally, partnering to fulfil customer challenges is not a new concept for IT Solution Vendors – but historically, a partnership tended to be more of an informal relationship, consisting of ad-hoc, tactical responses to customer projects. In many cases, teams were not aligned, so they could not adapt and respond to client requests. The result would often mean presenting multiple services for what the client saw as a single requirement.

More than just outsourcing; part of the digital transformation journey

With the onset of digital transformation initiatives, customers want to move from the challenges of older and often disparate systems to newer, cloud-based technologies that integrate solutions. For example, they tend to look at source-to-pay (S2P), purchase-to-pay (P2P) and order-to-cash (O2C) requirements as a single, continuous project.

However, many vendors specialise in particular areas, as each component can be pretty complex. So, when vendors respond to a multifaceted request, they are often only capable of genuinely supporting one or a few partial element(s).

1+1=3: Ecosystems are greater than the sum of their parts

A partner ecosystem is a network of partners from the same or interconnected industries, collaborating to deliver solutions that meet client expectations via a single, effortless customer experience. As in nature, the different elements of an ecosystem are connected, but each brings and takes different things according to its capabilities and needs. In this way, no partner is required to own or run every part of a solution offered to a customer, but rather can provide a specific component of the service, contribute with a crucial skill for a project, or ask for support when needed.

As the popularity of the partner business model grows, more and more vendors realise the opportunities in presenting a joint solution with a carefully selected partner, or partners, to address more of the entirety of a customer requirement than they would be able to do individually.

Partner ecosystem strategies differ from ‘partner outsourcing’, where the more prominent vendor typically contracts with the client and then addresses individual component solutions. Instead, a clear and defined partner strategy enables the marketing of processes and capabilities as one solution from the outset. Each challenge is identified, and an optimum joint response is designed. Ultimately, the value achieved via collaboration is more significant than what each participant could have generated on their own.

Cooperation or competition? Welcome to the "coopetition" era

Adopting a partner ecosystem approach can revolutionize the traditional concept of competition, turning away from rigid rivalries towards flexibility and integration. Under this view, the focus is no longer on pure competition; it is all about "coopetition". While companies may certainly compete in some domains, if there are opportunities for collaboration there's every reason to engage in partnerships, even with traditional competitors. The ever-shifting business landscape calls for innovative strategies and when results prove advantageous for all parties involved, the case for investing in solid partner ecosystems writes itself.

It’s not competition, it's 'coopetition'. If results are positive for all parties, there is no reason why businesses shouldn’t collaborate.


Take advantage of new avenues for revenue growth

In general, leveraging a partner ecosystem can enable multiple benefits, from synergies and collaborative solution development to joint marketing and sales efforts, customer referrals, and knowledge sharing. But how can you tell if partnerships are relevant to your particular organisation? Let’s start with an exercise. Out of all the client requests you have received in the last 12 months, consider:

  • How many of those fit your company’s core capabilities well?

  • How many did your team review before concluding that the demands were not in line with what your company has to offer?

  • How often did you encounter customers with technical, legal or industry-specific requirements that would need heavy investment and new developments on your side?

Reflecting on these questions can help you assess a partner strategy’s need and relevance. One important thing to remember is that even if you start with a specific, tactical project, providing an exemplary implementation and delivery experience can lead to future growth with the client.

Another advantage is that your customer will view your company as a trusted industry expert – you are not trying to “shoe-horn” your offering to the client’s request. Instead, you are ensuring, via your partner ecosystem, that you can always recommend the most effective solution, guiding them through the sourcing processes and helping establish the proper decision-making criteria for each case.

Partnering with Pagero

To the more than 300 partners in our partner ecosystem, Pagero provides a platform built to adapt to the ever-changing business landscape, helping them (and their customers) stay ahead of challenges and the competition by accessing our Global Business Network. By partnering with us, you can offer your customers e-invoicing solutions, local compliance services and full automation across both purchase-to-pay and order-to-cash processes. Furthermore, our partner ecosystem will extend the range of capabilities available to your clients.

At Pagero, we believe that the future of business is connected and collaborative. Let’s cooperate to integrate services and extend our core capabilities into end-to-end solutions for shared clients, and build tomorrow’s industry, together.

This text was originally published 10 June 2022 and last updated 4 April 2024.


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