Technology Vendor Partnerships
The right collaboration between vendor and client can create strategic advantages that lead to exponential growth, possibly for both parties. It is this black-swan success with its exponential return, that technology partnerships seek to achieve.
Vendor partnership is not a status awarded (like a gold star) to recognize a vendor going above and beyond. It is not an expectation that the vendor wantonly exceeds the terms of the agreement, or that the client should take infinite reference calls.
Partnering is an action of co-investment outside of this-for-that contract language, and it implies both parties are rewarded. Partnerships come and go as investments are committed, realize their return, and fade.
Types of Vendor-led Innovation
Technology vendors are an ideal source of innovation as the breadth of their experience gives them greater perspective on a client’s challenges. There are four types of vendor-led innovation. (SRM)
New to Market Innovation
A vendor may bring to their client new offerings, which they developed for the market broadly rather than that specific client. These innovations are often impactful, but rarely groundbreaking. New to Market innovation is not an example of partnership.
Vendors may develop innovations with a specific client in mind. These innovations show the commitment of the vendor to the client’s success, but they can miss the target. Vendors rarely have full knowledge of the business’s needs or the solutions that are already in development.
Exclusively Coordinated Innovation
Partners are tasked and incentivized by a client to develop solutions for their specific needs. The vendor may be able to sell the technology or service to other clients after the first client is satisfied. This act of partnership requires intimacy between vendor and client with deep familiarity of the business problem, outcome desired, external factors, etc.
Collaborative innovation creates the deepest level of partnership. Both client and partner co-invest to co-develop a product from which they will co-benefit.
Creating a partnership
For a partnership at any level to be successful several factors must be present.
- Both sides must have a willingness to invest and take the risks implied with that investment.
- Both sides must be meaningfully rewarded for success
- The vendor must understand the client’s business and the outcome sought
- Executive sponsorship of the project is required to maintain its priority above the day-to-day
- The people involved must have an effective working relationship. They often have a personal relationship as well.
A technology partnership could be transformative for your business. Ideate with a preferred vendor on partnership opportunities to solve your business challenges and create differentiating innovation.