Businesses are realizing that they need to innovate quickly to adapt to the new digital world. A recent IDC study identified the best way to improve innovation capacity is through building partnerships and strong digital ecosystems. Digital transformation is well underway in all industries, with many companies experiencing challenges along with the myriad of new opportunities it brings.
According to the IDC InfoBrief, sponsored by Schneider Electric, “Using Partner Ecosystems to Accelerate Innovation,” companies should focus on building innovation with partners to create innovation ecosystems of alliance and technology partners.
As Schneider Electric Chairman & CEO, Jean-Pascal Tricoire highlighted in his digital economy blog, “A single company cannot operate successfully in a silo to serve its customers best. Instead, a successful corporation depends on an ecosystem of partnerships, including suppliers, system integrators, and innovation partners such as universities, startups, technology alliances, and more.”
What are the advantages of a digital ecosystem?
A digital ecosystem is a collection of companies or individuals with complementary skills and common objectives sharing knowledge to enhance and accelerate innovation. The ecosystem facilitates community interactions to discuss digital technology challenges together with a global network of peers.
The conversations generated in such a forum drive industry innovation and collaboration but what makes it truly digital innovative is the relationships established through sharing and exchanging data and APIs via one unified digital business platform.
This interactivity through a digital platform is essentially the soul of digital transformation. Data sharing erases boundaries which allow businesses to connect to stakeholders through robust partnerships. It also enables all existing and potential partners to drive value creation and identify opportunities.
Why are partners keen to connect in a digital ecosystem?
Firstly, it is the simplest and most direct way to accelerate innovation and business transformation. According to the IDC InfoBrief, all companies surveyed stated they experienced a 6 to 20% negative margin impact due to limited innovation capacity. On the other hand, improving innovation can lead to a 12% improvement in time-to-market and a 7% improvement in operational costs. Businesses within digital ecosystems achieve this through mutually beneficial relationships built with their innovation peers.
Partners across multiple industries, end markets, and operational scenarios bring unique capabilities and data. The richness and diversity of APIs and Artificial Intelligence/Machine Learning (AI/ML) models built and refined over the years are unprecedented.
Some have mastered the business models around new digital services, monetizing data coming from devices, and subscription-based software business models specialized to a number of industries. And, some have built a rich ecosystem of partners that can readily seed this ecosystem.
How does a digital ecosystem accelerate innovation?
With a digital ecosystem, experiments can run in parallel at a very large scale. New digital services, new AI/ML models, new software products. You can use the network effects to expand your reach to a large set of customers. You effectively accelerate the learning cycle starting from understanding customer needs, to producing minimal viable products, and then actual products to solve those needs.
On top of that, you can access a set of Industrial IoT skills that no single company can build. , as engineers, and professionals across multiple disciplines, bring specific skills to solve a common problem.
Digital ecosystems help companies that have a limited innovation capacity by allowing them to tap into capabilities, analytics, data and skills they don’t have in exchange for either their own strengths or commercial agreements. Over the long term, the nature of these partnerships can be scaled up – for example, once a data-model, a reference architecture, or a partnership business model is established, subsequent use cases can be replicated.
How to find answers to your technical and business challenges?
Schneider Electric Exchange is about the knowledge transfer helping companies solve their digital transformation challenges. It provides an open business platform for co-innovation on everything from SCADA and telemetry solutions, industrial automation, power distribution excellence, to partnership success stories, and insights for optimizing smart building environments.
As an example, Base Sistemas, a certified Alliance system integrator from Spain, posted a question in the Exchange community in order to find a specific cybersecurity solution for a large petrochemical client in Spain. Enigmedia, a technology company from Spain, responded and proposed their cybersecurity offer published in the Exchange marketplace. The two companies contacted each other through the ecosystem, leading to a collaborative transaction to solve the customer’s problem.
In addition, Accenture, the global management consulting and professional services firm, leverages Exchange to create customized solutions and develop digital business models.
Exchange is not just about knowledge transfer, but to accelerate and help companies and their customers transform digitally, enabling superior customer experience, enhanced operational efficiency and more profitable growth.
Digital ecosystems empower workforces
A key value is the communities created – people with different skills are solving common sets of problems. For instance, a software engineer can work with a mechanical engineer, or an electrician, without being in the same company.
Even if you are a small player, the democratization of data, analytics and APIs, means you can access resources you couldn’t access before. Empowered workforces everywhere can now engage with digital resources to solve tough problems and be more creative with less limitations or knowledge gaps.
How are digital ecosystems helping companies to co-innovate?
Manufacturing executives explained to IDC that it’s all about selecting the right mix of innovation partners within a combined ecosystem. This enhances the skills of current staff and provides access to talent from technology partners to increase their capacity to innovate. Co-innovation with partners supported by digitization is the answer to thriving in a digital economy.
There are three key benefits that manufacturing companies can expect after embracing collaborative digital ecosystems:
- Seizing data’s business value:Today, every company is generating vast amounts of data, and many are already turning this knowledge into business insights that improve efficiency, drive down costs, and reveal opportunities for innovation. As a result, businesses can cut costs and reduce their impact on the environment.
- Innovating and scaling business growth: Digital ecosystems offer manufacturers, opportunities to interact with startups whose services help complement their existing capabilities. Startups, in turn, can directly access a wide range of potential customers.
- Improving efficiency and sustainability:Sustainability is at the forefront of nearly every company’s business strategy today. Technology and innovations– especially IoT and predictive analytics – are equipping companies with the tools they need to better track their environmental impact, identify improvement opportunities, and deploy sustainability solutions without reducing efficiency.
Our strategic alliance partners complement Schneider Electric’s technology and knowledge to solve specific market challenges for energy management and automation.
Learn more on how you can leverage the full capabilities of your ecosystem in the IDC InfoBrief, “Using Partner Ecosystems to Accelerate Innovation” (free access for a limited time).