Leveraging the power of collaboration for a technology company

683 reads

Tracing back to the advent of collaboration

From the year 2000, a massive shift occurred quietly to most, but daringly to a few. A few large organizations saw the change that was occurring. In 2007, when I was consulting with a large $Bn technology bellwether from my alma mater, I remember how this disruption, so new and so unique, was being viewed as the single largest transformation in the industry way before most of the world heard of this disruption. This arrived with the perfect storm co-created by cloud system deployment capabilities and the penetration of high speed internet. With these forces aligned, it created the SaaS disruption. It took 10 years though for its proliferation to be the product of choice for all industries. It uniquely positioned itself to productise systems and frameworks and create workflow environments which were hitherto accessible only to the big companies at a fraction of the expense. It did something else which was more succinct though. Now companies were suddenly getting familiar with having open systems and integrations and allowing outsiders in – a fundamental shift in thinking which has changed everything.

How has this affected collaboration though?

A precondition to any collaboration is an open mind. Where one can freely discuss synergies than be worried about theft of intellectual property by sheer discussion itself. With an open system environment, companies began to see how great technology could be accessed by everyone for a fraction of the cost, establishing that letting someone in can save money. Now organizations needed a nudge to say that collaborations can add business value. In 2009, I remember how an acquisition by another big bellwether of a small technology outfit in Europe was of strategic importance to them. Making less than 1% of their own top-line, this large technology company was ready to take the plunge of letting in a small team of engineers join them rather than do what might come to them easier – build their own team. A surprising move, but it gave them access to a downward integration possibility which could get them into market 3 years sooner and maybe worth billions in years to come.

Why would a tech company have this internal conversation though?

There can be 3 different time phases which show the transition of this conversation:

Pre-2000

  • Improve performance: Banking on economies of scale to be able to provide better profitability by operational synergies and far lesser redundancies.
  • Consolidate and remove excess capacity: Use the combined workforce and bring down bench strength and increase utilization by looking at leaner teams of support.

2000-2010

  • Provide market access: Use relationships and delivery capabilities to enter a segment or market where the other may have significant leverage or reduce time to market.
  • Provide a new product/ service: Utilisation of the other organization’s technology so that they would be able to use the same relationships.

2010-2016

  • Solve a current challenge: Use something that has been perfected/ done better by another organization to be able to apply the shared learnings in its own company.
  • Complete a cycle: Use the other organization’s offerings to be able to solve problems at a vertical level above or below and become a ‘one-stop’ solution.

Today

  1. Create new offerings: Leverage the potential of both organization’s offerings to be able to create a new product that will solve a problem in another industry altogether. In early 2017, we advised a logistics company and facilitated introductions to another block-chain implementation client of ours. Together, they developed a POC (which we advised on) in the supply-chain logistics space which on deployment would make the company one of the first in the country with capabilities to provide a future-ready block-chain solution positioning it at the cutting edge of similar solution providers in the country. For the block-chain company, they now had a product to resell and a test case in one of the largest industries for block-chain disruption.
  2. Expand horizontally: Leverage a product’s offerings to be able to expand into new geographies. When we advised a mid-size tech company on a potential collaboration, we felt the possibility of being on the delivery side of the solution and having their share of the pie. While the move was inorganic, it also meant that the company was on the winning side of a massively expanding foodtech industry. This collaboration resulted in a large transition of the rewards of the technology they were building.
  3. Transform organization completely: Work together to completely transform the offerings to a new paradigm. We advised a company in mid-2016 to be able to fill up their idle capacity. While one of the collaborators had approached us for a sale of his business, the collaboration was able to lift up both their margins while reducing the costs of them operating individually. After the addition of few new key management personnel, the business had reached a stability which allowed it to fetch a 2x improvement in valuation in under a year.

Is this the next big thing then?

It is evident. Maturity of a tech collaboration has significantly risen. Now, organizations look beyond just current year cash flows. They are looking 3-5 years from now. And the belief in a union of equals has emerged. Earlier, ‘big fish eat small fish’ was the thinking making organizations work as silos of expertise. In my personal opinion, there is a massive consolidation of strengths underway. More and more organizations are becoming cognizant of their strengths and accepting of their weaknesses. ‘Collaboration’ (which is being used as a buzzword for achieving impact internally) will be the buzz word of the next 7 years  as organizations become more open, learn to work better and grow together faster than they individually could have.

If you think your organization is facing a similar set of dilemmas, situations commanding an understanding of Strategic Finance or you know you need to go forward while you’re still ahead, I can be reached on nag[at]prequate.in.

Trending

115
mashable's picture

Travel accessories to give you that first class feeling

Even if your vacation destination is amazing, getting there can be, well, another story. Between the Tetris game of packing your suitcase, the bustle of a full flight, and the dreaded middle seat, you might be exhausted even before you reach your
100
harvardbusinessreview's picture

Leaders Focus Too Much on Changing Policies, and Not Enough on Changing Minds

To achieve the outcomes you want, start by thinking about people and culture.
97
sethgodin's picture

If you need deadlines to do your best work

Make some up. There’s no shame in that. In fact, it’s a brilliant hack. Set up a method of reward or punishment with a third party. Money in escrow that goes to a cause you abhor. Public congratulations. Whatever the method, the point is the same:
214
sethgodin's picture

The shortcut crowd

There is no market. There are markets. And markets have segments. There are people who enjoy buying expensive wine. There are people who will save up their money to have a big wedding. There are people who pay to have a personal trainer… And within
200
johnsullivan's picture

A Look at What’s Ahead For Talent Management In the Middle East

Note: Hessa Al Ghurair, CHRO and head of corporate social responsibility at Commercial Bank International P.S.C., writes on the state of human resources in the Middle East. In this Q&A, she discusses the talent management issues facing
329
businessstandard's picture

In media innovation is outsourced, need more data analytics: Punit Misra

 You have spent about 20 years with Hindustan Unilever Limited (HUL) before moving to Zee. From consumer goods to media, what is the first thing that hits you?One, there are significant levels of consumer engagement. You use a shampoo or soap
333
johnsullivan's picture

5 Strategies For Getting Your Employees Excited and Smart About Open Enrollment

Communicating employee benefits is a year-round job –– making sure employees remember key dates, know how to make changes when they have a life event such as getting married, submit claims on time and so much more. But open enrollment...
305
businessstandard's picture

AI revolution and jobs in India

 We are all in a tizzy about what new-age “artificial intelligence” (AI) systems can do. Does this harm India's hope of large-scale labour-intensive production? The picture is more optimistic than meets the eye. The AI revolution is mere
242
johnsullivan's picture

3 Questions to Evaluate a Candidate’s Emotional Intelligence

When looking to fill an open position, a lot of factors go into the screening process for the perfect candidate. You want someone who has relevant experience; an acceptable number of years in the field; a solid work history; and,...