Clearly, I am a bit biased here, but I do think that it is possible to get a good partner for digital transformation, as long as one understands what this means for their organisation.
Finding a good partner for transformation is tricky, as there are many ways of looking at it. I have spent 10 years of my career in procurement; buying huge global technology outsourcing contracts, which were in some ways transformative for the business (despite being entirely focused on tech). As a consequence, in my time at Arcus Global, I have worked hard to incorporate as many of the key learnings of being a good supplier into the fabric of the company, but I will be the first to admit – it is hard and does not always work.
Firstly – can there really be one partner? The short answer is no. No matter how big or global they are. Having a solid, multi-source approach is always a good idea. You may have to procure a large technology component in your programme, but transformation is about your business, not a tech solution, nor someone’s catalogue of services. The only things that need to be solid and singular are your organisation and your vision.
Trying to pick the right technology could involve multiple partners. Clearly, integrating things is harder when there are many elements, but modern technology and APIs should allow you to do this well. Set standards for those, and never break them. This is not to say that you should aim to have as many suppliers as you can, but a cohort of three to five key partners is probably a good idea.
It is not reasonable to expect a supplier to be a real partner to an organisation just because they have won a procurement, or said all of the right things. Nor is it sensible to rely on being ‘fair’ in the future, and agreeing to resolve all disputes at boards. As time passes, bias will creep in, and conflicts will escalate. Worst case scenario, a complete breakdown of relationship is entirely possible. If this happens late in the day, when a lot has already been invested with a particular partner, it can be catastrophic in terms of programme outcomes.
The thrust of your efforts therefore should be on aligning the incentives between the parties. If this is done well, then honesty maintains itself. If your success is their success, then great (this is not the same as ‘your failure is their failure’). Whether it is revenue or gain sharing, publicity, joint commercial opportunities, or follow on phases, it doesn’t really matter. Aligning incentives is key, as is maintaining trust and senior relationships. This is where the transformation leader, their team, and councillors should know the key personalities in the supplier world, and build that relationship in the good times, rather than just drag them up to be beaten up in the bad times.
I am assuming that other crucial elements like depth, experience, innovation, high research and development spend, excellent non-proprietary technology, and an eco-system (such as AWS, Azure, Salesforce.com, or Google) are all present and correct – if they are not, a good relationship is not going to be enough.
One final point: size is not as important. A company of 50+ people is big enough to be able to deliver a large part of a successful transformation to a customer which is well managed, has a vision and has several good suppliers in the mix, especially if they leverage a global technology platform. The obsession with tech behemoths is entirely unjustified in my view – while they may have 100,000 staff globally, you will only ever see about 20 (and not the best ones, after the supplier demo day). Your supplier team is likely to stay more consistent, be more dedicated and better trained if they are a part of a smaller organisation. Most importantly though, your success will genuinely be their success – your programme might be the most important thing to ever happen to their company – so they will care about it like it’s their own programme.
Originally posted here.