Curated by Vinay Prabhakar Minj
The key aspects that one needs to look at while choosing a partner are: differentiation, strong domain focus, trust and scalability.
Industry experts explain further on these traits: Read here –
A decade ago, the biggest news everywhere was the global financial crisis. But there was another thing happening silently and that was the growth of the number of things on the internet, which was growing bigger than the number of people on the internet. So, the financial crisis proved to be a blessing in disguise and invited a lot of big companies to focus on IoT.
The journey continues and it is projected to reach 50 billion by 2020. As of now, there are around 25 billion devices on the internet and the number continues to move towards the target.
Good stories so far in the IoT space
The cost of computation has dramatically come down and that has allowed people to store information in their private cloud, rather than going to a public cloud – says Rajarshi Banerjee, Head Of Customer Experience & Innovation, India Digital Leadership Team, ABB.
This has also enabled IoT solution providers to bring partners to complement their capability.
Moreover, the affordability and accessibility of IoT products has today helped IoT companies to scale their business to the global level, while providing commercial benefits to the customers in terms of cost reduction of production and increase of productivity.
Adding to that, Arun Budakoti – Industry Lead, Transportation, DTO, CISCO – shares an interesting example, which is that one of the largest European ports, the port of Rotterdam, has declared that by 2030, the port operations will become completely digitised. The work has started, and one will perhaps get to witness the first autonomous ship park itself at the port by 2030.
According to him, vertical centric approach is gaining popularity in the industry today.
He suggests, “Have a vertical centric approach i.e become a domain expert, understand that business well from the operation side, then build up a capability and find an ecosystem where you can build a complementing story for your business.”
However, digital transformation is not a simple step, Budakoti explains, “one needs to have a long-term vision and then probably break that down into smaller steps, find the right ecosystem partners and start implementing.”
“The vision has to be pervasive; you can’t have fragmented deployments within the system and claim that you have not transformed digitally. It has to be a long-term approach, but actions should to be taken in smaller steps,” he adds.
“Become a domain expert, understand that business well from the operation side, then build up a capability and find an ecosystem where you can build a complementing story for your business”
Traits of a Good Partner
According to Sridhar Sampat, Director – Ecosystem & Partnerships, MindSphere IoT, Digital Factory Division, the two key parameters that he will look for from a partner are – differentiation and a very strong domain functional focus.
“IoT ecosystem is very crowded and so it’s very important for a partner to have a crystal clear focus on what it is that they want to do, which industry are they focussing on, what kind of uses cases and what functional/domain expertise they bring to the table.”
“This helps to differentiate themselves from a multitude of partners out there and build business value with the end customer,” Sampat explains.
Meanwhile, Arun Budakoti is of the opinion that a holistic approach is critical to be successful in IoT industry today.
He says, “When approaching the market, a company needs to have a holistic approach towards business outcomes and understand the challenges that are being faced today such as digital disruption that is impacting all spheres of business operations. This can help them to align themselves better with the larger ecosystem partners and scale up their business.”
Above all, trust is the biggest attribute that one needs to look at while building a good partner ecosystem.
Sharing his view on this aspect, Rajarshi Banerjee says, the partners need to have the quality, gain trust and retain that trust. As long as the trust aspect is not fully honoured and respected, a lot of things can fall apart based on that.”
Scalability is another important aspect, as it can also cause a failure. If one is not able to scale at the pace at which the customer or the market is expecting, then trust is lost. And once the trust is lost, regaining that is a very long and difficult process.
Expectations of clients
When we talk about building a good partnership, two things always come to our mind: delivering value to the end customer and providing something good for the partners (i.e. a win-win-situation).
But what are the points that customers look for from the solution providers and the partner ecosystem.
Sridhar Sampat replies – What a large organisation or any organisation is looking for is a partner who can handhold them through the entire digital transformation journey.
Digital transformation is a long process, which can be looked as a three-step process: –
- Connect and Monitor solution: Making your entire product/operation smart i.e connecting them and enabling the flow of data into a centralised system.
- Analytics and Predictive stage: Derive value and benefits from the data that had been gathered first.
- Digital transformation stage: Transforming the entire business (conducting the business, dealing with customers, the kind of solutions and products that is offered)”
And organisations look for somebody who can be part of this entire process. Another important thing that a partner or a solution provider needs to do is help these organizations with the change management and culture management, in order to address any threats faced by them.
“India is among the leaders in the adoption of IoT and a huge number of startups are coming up”
Why POCs fail and where improvement area lies?
Researches have shown that more than 70 percent of the POCs (Proof Of Concepts) that get done in the industry today do not really convert into a deal for the IoT partner, or the organisation who’s providing the solution. There are multiple reasons why this may happen.
One of the reasons, Sridhar Sampat points out, is that there is a shortage of really sharp and focused solutions from the partner ecosystem.
Sharing his perspective, Arun Budakoti says that when addressing a specific industry vertical, his company identifies the challenging areas and converts them into various use cases. Next, for each of the use case, or the problem statement that the client might have, the company defines the business outcomes. Once those business outcomes are delivered, the success of that POC is determined and only after the company asks the client to roll it out beyond the PoC period.
“Instead of selling, start listening to the customers” – This is the strategy that Rajarshi Banerjee says ABB has been following since years and it led to many successful business deals.
Elaborating on this approach, he informs that ABB has also devised a toolkit which focuses on bringing in all the stakeholders, listening and finding out what all the problem statements are, what can be solved, how many can be solved. Further, they also find out how many need bespoke interventions and of those interventions, how many could be having RoI both to the customers and the organisation.
“This can bring about a change in the sense of competition and be very fast replaced by a sense of collaboration, where the definition of business and competition will undergo a complete transformation. And that is something we need to be aware of,” he opines.
Business transformation scenario for India
Rajarshi Banerjee considers India to be among the leaders in the adoption of IoT and also sees a huge number of startups coming up.
India still does not have the upcoming cutting-edge inventions or the disruptive technologies, but surely has those cutting edge and disruptive innovations which are solving problems unique to the country. Challenge lying ahead is how India can be a focal point of technology on a global scale, just like China. It is also to be kept in mind that India is culturally sensitive. So, before taking any major step towards a global technological advancement, we need to consider the above point.
Arun Budakoti adds that smart marketing is a great concept to start new business models and monetise from the infrastructure like smart parking and smart expressways. This journey is long but can help the government to achieve its plan of converting India into a digital country.
Continuing on that, Sridhar Sampat says that any ecosystem that can enable organisations to deliver innovative solutions to their customer is of great interest to the businesses today like selling water instead of water purifiers, selling kilometres instead of cars, or selling air instead of compressors, etc.
“A Capex-based operational model or a standard SLA is no longer working. It is the outcome-based, output-based or performance-based model that the customers are asking for today”
The market perspective of engagement and partnership models
When we’re trying to build up an ecosystem, and be a part of it, then we have to see what is the value that we bring to the table and where do we currently stand in that ecosystem. And then probably see how it can be scaled it up to offer an end-to-end solution to the customer – points out Arun Budakoti.
With the change in the business model, the customer expectation is also changing. A Capex-based operational model or a standard SLA is no longer working. It is the outcome-based, output-based or performance-based model that the customers are asking for today.
At the same time, it would be expected that the same ecosystem is supportive enough for the business owner to not use CapEx or OpEx.
“It is not a good idea to take everything (from payments to financial risks) upon oneself. It’s not only the big companies that have to take up this challenge, but the medium and small companies as well as they tend to slow down while adopting the archaic business models which the current market situation does not allow,” Rajarshi Banerjee adds.
How a mid-sized company works and sustains in absence of an ROI
Startups have their venture capitalists who can invest huge sums of money. Large companies can maybe go back to the banks and do the required negotiations. However, mid-sized companies are somewhere hanging in between. So, one needs to find out a method for structured financing and the right partner for it in their digital journey.
One of the reasons for this kind of a business model to exist today is because the entire IoT journey is very new, it’s new for the customers, for the solution providers, for the partners and for everyone else. So, waiting for an ROI or to keep investing in solutions is not a never-ending process. At some point, either this industry will die (which is very unlikely), or it will succeed. And when it succeeds, everyone benefits.
The risk involved in mid-sized companies as compared to large companies
It is important to identify the right ecosystem in which a mid-sized company can work along and bring a certain value to the table. For example, startups today don’t prefer investment from a venture capitalist which is not aligned with their vision, per se.
At the end of the day, when the ecosystem will thrive, then that’s how the overall success of the journey will be defined.
It is important to keep in mind that to be successful in business, one should never work on the outer limits, no matter how fantastic the smart solution is, the experts suggest.