A great deal of emphasis is rightfully placed on partners’ contributions to vendor revenue, but they can also contribute significantly to vendor cost savings.  A recent EY study of more than 800 business leaders leveraging at least one ecosystem business model revealed that on average, ecosystems drive 12.9% cost reduction, in addition to contributing 13.7% of their total annual revenues and generating 13.3% in incremental earnings.  By collaborating with partners and encouraging them to collaborate together, you gain the efficiencies of different viewpoints and skills, which can lead to cost savings and breakthroughs in product development, service and support approaches, and customer engagement strategies.

Cost Structure Optimization and Efficiency

While businesses must be more innovative, effective, and efficient than ever, they must also find ways to do more with less.  Ecosystem partners enable businesses to optimize cost structures and drive operational efficiency. By leveraging partner resources and capabilities, organizations can minimize capital expenditure and reduce the need for in-house investments. Partners can take on the burden of marketing, distribution, and customer support costs, allowing businesses to focus on their core competencies. The result is improved profitability and the ability to strategically allocate resources and drive cost savings throughout their value chain.

Recruiting, hiring, onboarding, training, and maintaining in-house sales teams at scale is expensive and not easily scaled. By contrast, by leveraging the partner ecosystem, vendors can drive down their internal costs while improving scalability. This requires motivating and enabling partners. Motivation can be accomplished through sales and marketing development incentives and a compelling ROI for partners. Enablement in the form of low-cost/no-cost training and certification is critical to building a compelling partner ROI.

Cost efficiency and scalability can also be enhanced for research and development. Sharing R&D resources, capabilities, infrastructure, technology, and best practice processes between vendors and partners can lead to cost savings and accelerate innovation. By collaborating with partners and encouraging them to collaborate, you gain access to different viewpoints and skills, which can lead to breakthroughs in product development, service and support approaches, and customer engagement strategies.

Leveraging partner ecosystems is an effective and efficient way to optimize your marketing investments. By sharing resources and assets with your partners, you’re essentially doubling your marketing efforts without doubling the cost. This collaborative marketing approach enables you to leverage your partner’s marketing channels and vice versa, resulting in a broader reach at a fraction of the cost.

Partner ecosystems also provide delivery cost savings. The shift in customer expectations from product delivery to the enablement of outcomes has resulted in vendors redefining their offerings and leveraging ecosystem partners to deliver solutions that are more effective and cost-efficient.  In their role as multivendor implementers, many partners have developed new delivery capabilities with faster and more extensive support for new solutions or use cases.

Key Services from Partners that Help in Cost Savings

Partners support companies to scale their delivery capabilities, reduce delivery costs, build complementary skills, and develop extended solution offerings. They provide key services that drive vendor delivery cost savings, such as:

  • Translate business requirements and customer pain points into a technology solution, and then deliver the solution to the customer
  • Customize support single/multiproduct solutions to customer needs
  • Support the adoption of solutions through training and customer success
  • Deliver services from offshore locations with lower costs while maintaining service quality

As vendors and partners strive for sustainable growth and success, partner ecosystems have become an indispensable force multiplier for increasing revenue and reducing overall costs.  The ability to expand market reach, leverage specialized expertise, enhance customer engagement, accelerate speed-to-market, mitigate risk, and drive cost efficiency makes partner ecosystems critical to sustainable growth and success.

This is the final part of our Partner Value Series, did you miss Part 4 of the series? Click here to read the article

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