Real Time Communications Featured Article

Digital Partnerships and the Real-Time Enterprise

November 11, 2015

Today’s business world is a dramatically different place than it was even five years ago. The conversion to cloud services, smartphones and other disruptive digital technology has meant that companies in older industries have had to change their operating culture and practices, just to keep up—while native online companies struggle to implement mature, profitable and sustainable business models. This has given rise to a slew of digital partnerships, according to a new report—and set the stage for mainstream adoption of next-gen real-time communications services.




According to a report from Australian telecom incumbent Telstra and the Economist Intelligence Unit, “Digital partnerships are allowing companies to make smaller bets on big things, gaining exposure to new technologies while sharing the risk,” the report noted. “A flurry of new partnerships should emerge over the next 12 months, as almost one-half of organizations plan to partner with a major technology platform company.”

The term “digital partnerships” can refer to many models: Contract-based alliances between two or three players to create intra- or cross-industry partnerships; large, loosely organized ecosystems based on a dominant technology platform; supply-chain partnerships; process partnerships; and information- or data-sharing partnerships. The Telstra report found that early adopters already have multiple digital partners and some belong to more than one form of partnership.

Further, the report finds that the growing trend for digital partnerships is already having a measurable impact for the organizations involved in them. One half of the 1,044 executives surveyed for the study believe that their digital partnerships have proven their value “beyond doubt.”

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Almost six out of 10 respondents (rising to 64 percent in Asia-Pacific) expect their partnerships to generate at least one-tenth of their revenue over the next 12 months. This figure is lower, however, among those with partnerships of longer duration, suggesting that greater experience leads to tempered expectations.

Still, the majority of executives feel that their partnership experiences have profound implications for their own business and business overall: about one-half predict a change to their business model, while a similar number (53 percent) believe that companies will have to be part of a network to be able to leverage technology trends in the future.

The Digital Customer at the Heart of It All

The drivers for partnership in the digital age boil down to one thing: Accessing the connected customer.

The drive to customer-centricity and greater levels of personalization is core to the digital-partnership strategy, and the primary motivation of all these partnerships is to develop new digital capabilities that enable companies to  serve the “always-on” end user; from savvy and discerning smartphone users to mobile-first customers in emerging markets. They want to do this through better use of data and analytics; through better targeting; and through better responsiveness and engagement.

Organizations are also feeling a heightened need for differentiation in a world where customer reviews, omnichannel communications, social media and more pit companies against each other in the brightest of spotlights. That in turn has forced many companies to hone greater specializations. Specialist organizations that do one or two things well will naturally rely more on partnerships to fill in the competencies that they don’t have in-house.

At the same time, companies usually have little time both to develop required additional expertise internally and keep pace with technology-driven changes in their own industry (or the neighboring industries they might be moving into). The confluence of these trends, and the need to access specialism at speed, necessitates more digital partnership networks that straddle multiple industries, Telstra noted.

Thus, data sharing is a feature common to many digital partnerships—even extending to disclosing details from existing patents. Close interaction with digitally native small businesses and start-ups is helping offline organizations to adopt a digital mindset, including adopting a more open attitude to sharing data. Yet concerns about risk, security and compliance remain prevalent.

Enabling the Real-Time Enterprise

In order for these digital partnerships to work in practice, organizations have had to embrace next-generation digital communications. This has created a perfect storm for real-time technology adoption, especially unified communications (UC), mobile and WebRTC-based video collaboration, “click-to-X” capabilities, real-time data sharing and more.

One key area where these next-generation technologies become tantamount for viability can be seen in the waning of regional focus when it comes to enterprise partnering. Proximity has historically been the secret sauce in many partnerships. The trust needed to build a successful alliance is easier to foster when partners are within the same time zone, or within relatively easy physical reach. Being close to partners also means being able to share ideas and communicate in real time. As Telstra put it, this “speaks to the enduring human element to these partnerships, from inception to ongoing management.”

But proximity has become much less of a requirement in the digital world, as companies take advantage of better-than-ever mobile (and wireline) data connectivity, and cost-effective voice and video services, to look farther afield to find the right partners and the right expertise to help their business prosper.

Ancillary to this is the fact that co-creation, crowd-sourcing and open-data initiatives are showing signs of maturity in developed economies, making the landscape more fertile for collaborative innovation, even between remote parties.

“[This] will not become the norm quickly, but over the next three years, survey respondents believe that networks will play a bigger role than traditional research and development in the best innovations in their industries,” explained the Telstra paper. “An early example of this is application programming interfaces (APIs). Originally designed for developers to experiment with each others’ software, APIs are now used to share information between partners of different types and sizes for the purposes of innovation.”

The bottom line? Traditional businesses and start-ups alike have something to bring to their various industry ecosystems; digital partnerships are the bridge between those worlds—bridges that are built via real-time communications.

“As every firm becomes an Internet company, online-only businesses are searching for new ways of connecting with customers and other stakeholders,” the report noted. “Hubris is giving way to greater appreciation of the value locked up in older, offline businesses - from strong brands and customer goodwill to established relationships with regulators and governments. Multigenerational partnerships should flourish as more executives view start-ups as potential business partners or sources of innovation, rather than as competitors or potential acquisitions.

Digital Partnerships in the U.S.

U.S. businesses in particular are positive about digital partnerships, the report found: Nearly half (48 percent) have already entered into a digital partnership as of more than 12 months ago. Also, nearly half (47 percent) believe that companies will have to be part of a network to maximize technology trends in the future.

These partnerships are beginning to pay off, with 48 percent of U.S. businesses believing their digital partnerships have proven their value "beyond doubt.” In fact, nearly a third (29 percent) of the U.S. businesses surveyed said that they expect that their digital partnerships to generate between 10 to 25 percent of business revenue in the next 12 months.

And, good news for real-time technologies, nearly 50 percent of U.S. businesses view themselves as embracing digital disruption.

“Most of our US businesses are looking to support their start-up community, with nearly a third (29 percent) of businesses surveyed viewing technology driven startups as a potential business partner,” the report said. “This is however lower than some of their Asia neighbors compared to the likes of China, where over half of their respondents feel that way.”

And finally, the survey found that U.S. organizations are mostly partnering in-country: Nearly two-thirds (58 percent) are most likely to enter into digital partnerships with companies from North America. But, there is ambition for slightly further expansion, with 15 percent looking to opportunities in Europe and 13 percent in greater China—a situation which is likely to be a windfall for conferencing and API-driven data-sharing in particular. 




Edited by Stefania Viscusi

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