Lax Gopisetty, Vice President of Business Applications & Digital WorkSpaces at Infosys, joins Chip today in this episode of Ecosystem Aces. In this episode, Lax talks about how partnerships became crucial for success in a post-COVID, post-digital, post-cloud era workspace.
Infosys is a technology outsourcing company specializing in digital services and consulting for enterprises. As a global tech giant with multiple big-name clients, Infosys witnessed various problems in the workplace in numerous leading enterprise workplaces. Such experiences allowed Lax and Infosys to recognize and enhance the catalytic role of the enterprise in influencing the industry dynamic.
Lax and his team attempt to answer how enterprises should adapt to new digital technologies to rethink their industries, business models, and products to cater to the evolving digital landscape. Lax and his Department of Business Applications & Digital WorkSpaces primarily focus on two things: (1) enhancing the tools for working digitally to better the employee working environment, (2) redefining business models in the evolving industry space.
In this podcast, Lax views the current industry through a GSI enterprise lens to talk about:
- The evolving enterprise workplace and partner ecosystems
- Creating enterprise value through a shared ecosystem economy
- Diversification of industry trends
- Creative go to market models
The evolving enterprise workplace and partner ecosystems
Over the past few years, workplace trends have been shifting with new generations entering the workplace, intertwined with the rapid changes COVID has caused. While each generation has different expectations for a workplace, companies still carry the heavy burden to make sure that their employees feel a cohesive environment in the distributed COVID world. They must be able to incubate, scale, and build quickly while adequately catering to the shifting trends and demographics of the workforce.
Creating a partner ecosystem is one valued solution to that problem, but it is not a new concept for the enterprise world. Lax has always been a firm believer in partner and interdependent ecosystems. “Partner ecosystems are not something new,” he said. “It has always been there because no individual enterprise could build an end-to-end stack by itself.” What has changed over the years is the magnitude of interdependency.
Ever since the 1950s, when rapid economic growth encompassed all sectors of the economy, the value chain between producers and consumers has consisted of multiple enterprises. Each constituent and entity played distinct roles, contributing directly or indirectly to add value through the chain. In a way, partner ecosystems have preexisted through the years.
However, the industry value chain in the early 1950s-what Lax calls Industry 1.0-had hype cycles with lifespans of decades, giving enough time for companies to adapt and cater to the evolving customers’ demands within themselves. Hence, there was limited exposure to dependency on their partners. On the other hand, the industry value chain these days-what Lax calls Industry 4.0-has compressed that same lifespan from decades to less than ten years. Those are the ten years that companies have to incubate an idea, scale that idea, build an enterprise, go after the market, and start looking for new opportunities to pivot to, on top of catering to evolving consumer demands. Such a short time frame with too many large-scale tasks made it nearly impossible for companies to go to market or build an end-to-end stack by themselves.
So what does a new value chain look like? Lax first addresses the emergence of new types of partners called capability partners.
During the earlier days, industry partnerships mostly took the form of a simple supplier-distributor relationship. As a result, enterprises in the chain rarely needed complementary assistance from adjacent players apart from sellers and buyers. Then with more focus on the need for partner ecosystems to be built, nurtured, and mutually coexist to raise shared values, capability partners came up with much more diversity than suppliers and distributors. They took the forms of Co-creation partners, influence partners, channel partners, and tech partners that leveraged each other’s capabilities to build the stack and share value across the chain.
The new value chain is no longer a monolithic value chain of things being added along the way. It is about different component pieces coming together with a lot more dependency on each other. Compared to the preexisting value chain that focuses on creating consumer value, the new value chain is about getting into a shared economy and creating enterprise value.
Creating enterprise value through a shared ecosystem economy
Shared ecosystem economies are the byproduct of the growing ecosystem interdependency between partners. They are about how enterprises collectively interact to create additional value, sometimes collaborating, sometimes competing, and sometimes doing both simultaneously.
How this system works is closely linked to the emergence of new forms of partners. On their value chain, companies integrate around 10-20 different capabilities from different companies. Each capability is pulled together to create a new solution, which is later bundled together.
Lax refers to the airline industry as one example. For a customer to board a flight, there are a myriad of partners behind-the-scenes that contribute to the value chain. The industry must bring together the pilot, flight attendants, technicians, ticketing agencies, air traffic schedulers, and fleet manufacturers who work under different schedules and contracts. If an airline company fails to bring together each and every one of these partners, the aircraft fails to fly. Although we, as passengers, don’t see this industrial machine come together, the shared ecosystem economy shares and distributes more equitable value than at any other time in history.
Another aspect of this new ecosystem that we must recognize is that the system requires a different structure with a larger interdependency and shared equitable values. There must be a higher level of governance, partnerships, and program management capabilities to deliver the outcome. This need penetrates through both innovation and selling cycles all the way to the end of the chain. Hence, the entire value chain shifts from vertical building to horizontal orchestration of services so that companies can adapt faster to the rapidly changing market.
Bringing different components together to act as a single process is easier said than done. Management becomes increasingly complicated as the process involves more and more stakeholders with different priorities, values, and expectations. A divided market of distinct entities is now merging with blurring lines between consumers and producers. The new open market consists of each entity freely moving up and down the chain, expanding and spreading influence.
Lax interprets this problem through the concept of the spheres of control and influence. When an enterprise handles a big chunk of the value chain on its own, it has a large sphere of control with predictable and manageable processes. However, with more partners being involved within the chain, companies realize that they have less control throughout the process. Rather, they need more control on management's sphere of influence dimension. So they build a governance structure to put the appropriate controls in place, where each component of the chain could come together to raise mutual values and commitments. This way, each partner can maintain control of the process while taking advantage of the more significant influence structure.
“Do a very early agreement to get an alignment on the vision and the approach,” Lax suggested. “Make sure the governance process is transparent and robust.” He believes that the same dependency that distributors had on suppliers during the earlier days should be on partners.
First, companies should put maximum effort into selecting the right partners for the mix. Then they must recognize and acknowledge the different dynamics around each other and respect each other’s different economic, customer, and credibility values.
“Partners must sustain these relationships in the perspective of loyalty,” Lax noted.
Diversification of industry trends
Traditionally the GSI space was divided into a service-based economy and a product-based economy. The service-based economy sector was mainly focused on people and their skill sets, while the product-based economy sector focused on tech-heavy products. With distinct partnerships and values, the two have maintained clear boundaries.
Nowadays, however, the spectrum is narrowing down with both service and product economies investing in solutions and platforms. Service-based economies now capsule the capabilities of people and package them into bundles of solutions, while product-based economies shift to the cloud to create additional value in the revolutionized digital ecosystem. In effect, new consumption models are introduced into the ecosystem, creating new forms of partner ecosystems. Industry ecosystems that used to be individual constituents now come together through technology as partner ecosystems. The evolution of industries, consumers, and technology led to new and larger partner ecosystems.
Consequently, today, most GSIs have a minimum of 200-300 partners contributing to the chain, with constantly changing relationships. This connects back to the intensifying magnitude of partnerships. Compared to the earlier days when companies had a small number of partners that were easily managed, multi-thousand partners competing and coexisting these days makes management harshly difficult. These partners need a system that could bring some clarity and manage this complex web of relationships.
Creative go to market models
The changing market landscapes also require new go-to-market models. Lax sees this issue in three dimensions:
+what kind of capabilities will we take to market
+how does the commercial model work for consumers to consume and operate into
+how does the model deliver services to consumers
Since product companies are moving onto cloud and consumption economies, go-to-market models are no longer sold; rather, they are delivered. And to sustain this model in the capability and commercial dimensions, it is crucial to keep the focus on the delivery process. Hence the model moves from sell-and-go to sustain-and-deliver. As anything in the Industry 4.0 era is, seeing this new model through the three dimensions is much more complicated and requires higher prudence.
Changing buyer behaviors is also something to note when building a GTM model in this era. Buyers these days have gone through multiple industry life cycles in the shifting and growing market. Such experiences make them smarter and more informed about the open market to ensure that they receive the services they want. So GTMs these days have no use in building awareness. For companies to create a competitive edge, they should provide contextualization, personalization, and tailoring of the influencing mechanism on the capability, commercial, and service delivery models.
Yes, it is a more complicated process, but lax sees beyond difficulties. “There are new things that people will behave differently,” Lax said. “The good part is that we have the opportunity to be creative, innovative, collaborative about this to create new models.” And an important takeaway is that no individual economy could cater to this; that is what makes partner ecosystems matter so much more than they used to.
Wrapping Up
Growing up in India, Lax has always felt the advantages of interdependent and shared economies to create a stronger collective value chain. During his childhood, society prioritized maximizing shared value over individual values. So when advising partners and customers, he expressed his strong beliefs in creating a network economy with everyone chiming into that shared multiplier values. To the audience today, he once again underscores the strength of shared value systems over monopolized creation structures.
To learn more about Lax and what his team at Infosys is working on, you can follow him on LinkedIn.
Links & Resources
- Learn more about how WorkSpan helps customers accelerate their ecosystem flywheel through Co-selling, Co-innovating, Co-investing, and Co-marketing.
- Subscribe to the Ecosystem Aces Podcast on Apple Podcast, Spotify, Stitcher, Google Podcast.
- Join the WorkSpan Community to engage with other partner ecosystem leaders on best practices, news, events, jobs, and other tips to advance your career in partnering.
- Find insightful articles on how to lead and get the most out of your partner ecosystem on the WorkSpan blog.
- Download the Best Practices Guide for Ecosystem Business Management
- Download the Ultimate Guide for Partner Incentives and Market Development Funds
- To contact the host, Chip Rodgers, with topic ideas, suggest a guest, or join the conversation about modern partnering, he can be reached on Twitter, LinkedIn, or send Chip an email at: chip@workspan.com
