Ahead of his participation in TM Forum’s Monetizing IoE InFocus event in Amsterdam in October, Nicolas Windpassinger looks at what it takes to develop trust in digital ecosystems. He shares more insights in his book Digitize or Die.
It is commonly believed that the internet of things (IoT) is a new technology that is part of a new world of science fiction, or that it is still far off in the undefined future. In fact, IoT is a buzzword that describes the rebranding of the existing machine-to-machine (M2M) market in a more open, consistent ecosystem and global landscape of organizations (manufacturers, software providers, system integrators, developers, etc.).
“Trust” and “brands” will be at the core of IoT differentiation. Co-creation, co-development, cross-expertise collaboration will be where the differentiation will happen. The technology is an enabler; the collaboration the accelerator.
Driving differentiation, growth and profitability
I had the chance, very recently, to participate in the latest event organized by Association of Strategic Alliance Professionals in collaboration with Paris-Dauphine University’s Trust and Management Chair on “Trust in complex alliances”.
One of the subjects we debated was the importance of trust in complex partnerships and alliances, and we discussed how trust is difficult to have and is built throughout the relationship but can be broken very quickly, leading sometimes to disastrous situations for both parties.
I highlighted how we have we have built tools, leveraging best practices in our EcoXpert partner program to build and orchestrate trust between Schneider Electric and our system integrator partners. This included:
- channel policy that clarifies the rules of the game and the lines not to cross;
- commercial policy that clarifies both the duties and the rights of each party; and
- local operational channel managers that localize our global guidelines.
The peace of mind given to our end users is the result of three main ingredients: clear rules, competency and business requirements. Here are some of the other things we discussed during the debate:
Trustworthy channels and ecosystems
Partners and associate ecosystems are key components of any channel strategy to enhance growth and differentiation. Effective partnerships can only operate if trust has been built between the different parties.
As stated previously, contracts, policies and written agreements are very often used to clarify the needs, rules, expectations and deliverables to build trust throughout the relationship. As bizarre as it may seem, an important component of those contracts is the ‘escape’ clause very often used when trust is broken between the parties. Ironically, it means that an effective way to build trust is also to clarify how the situation will be taken care of if the trust is broken.
Trust as a tool to cross the technology chasms
IoT will blur the differentiation lines between connected buildings, connected grids and so forth. Manufacturers are digitizing their portfolios to answer to the new financial and technology constraints as well as the evolution of the end users’ needs and expectations. Digitization is impacting both hardware and software providers as well as the partners who leverage those components/products to deliver differentiated solutions to their customers.
Software and hardware will find success in providing the conditions for its partners to not only built trust between their own company and partners, but also between the partners themselves.
I highlighted in a recent blog, IoT False Beliefs, two false ideas we all have when thinking about digitization:
- #1: You need to be the first one to succeed in any IoT related business
- #2: You need to be a digital startup to succeed in IoT
Digitization will require a blend of very different expertise to deliver the expected benefits to the end users. Some partners have taken the choice to expand their expertise, some others to excel in a specific area of knowledge. Even so, both will need to have the conditions to build partnerships with one another, in a trustworthy environment to differentiate themselves and be more profitable than their competitors.
Alliances, partnerships and IoT
Innovations are happening at speed so alliances are crucial for companies competing in the IoT space. This is true not only from a technical standpoint but also from a go to market and co-competition type of relationships between the different types of organizations.
As stated by Steve Steinhilber, author of Strategic Alliances: Three Ways to Make Them Work (Harvard Business Review Press, 2008): “Alliances and partnerships are not about dividing the pie that is not growing, but instead building incremental value and extending the size of the pie in order to grow as a result.”