Myth Busters Part 3: Partners & Platforms – Which Comes First?

When you’re starting a digital transformation which comes first: a partner or a platform? That’s up for debate. Here is some background as well as an idea on where to start.

The Debate of Which Comes First

A digital transformation can be expensive, although it doesn’t necessarily need to be (see our blog titled Digital ≠ Expensive.) But it IS an investment of people, processes, and time. Digital implementations are significant expenses for most B2B companies. And getting it right is critical. Partners, and the digital platforms they integrate, are key players in a complex project with several issues at the core.

The Issues Driving the Debate

There are a few key issues that contribute to the “Which Comes First?” debate. The tilt towards choosing a platform or partner first tends to focus on these key areas:

• OOTB (Out-of-the-box) vs Customization
• Innovation – platform features & benefits and implementation
• Experience in Both Digital and B2B
• Permanency
• Costs

We provide rationale for which logically comes first and score the “winning” side, partners or platforms (or which leads best on that issue) based on perceived positional strength.

OOTB vs Customization

Many commercially viable B2B platforms come pre-packaged, often referred to as “out-of-the-box” or OOTB. Their inherent value is that they are ready-to-go and designed to integrate well with existing ERP or similar systems. But when you secure a platform, how do you know if it fits your needs?

We encourage clients to start with use cases that help determine fit. But many B2B companies are not well versed in the technical space and don’t know if the needs (use cases) and technology are well matched. If a B2B project will require significant customization, that’s helpful to know prior to the negotiation of any platform deal.

At the start, a partner can help you crisp up your objectives, strategies and use cases to determine the fit and then can help you to customize the platform for your unique business needs. Some of the ways that Xngage has assisted clients with expanded, customized digital commerce functionality include:

• Visual commerce “exploded parts diagrams” on Product Detail Pages (PDPs)
• Accessibility to Services that are complementary to the products

Competitively-advantaged customizations are typically not part of the OOTB platform product, so partners get the nod due to their adaptability and success with unique technical solutions. 

Score: Partners +1

Innovation

Innovation can come from anywhere. People who work closely with a solution often have the keenest sense of what’s working and what could be improved. While both partners and platform companies are well-versed in evolving needs, the platform companies have the benefit of statistical incidence: they see many more clients and their issues. They are often aware of what’s noise and what’s signal because of their constant scan across many clients and client situations. While partners often provide the tip of the spear to innovation, a platform company often has the broadest lens of how to increase the benefits of their own product.

Score: Platforms +1

Digital and B2B Business Experience

B2B specialization (and not just a reapplication of B2C) is table stakes. Both platform companies and partners MUST have a working knowledge of B2B operations to successfully advise their B2B clients. Even when B2C functionality finds its way into B2B ecommerce, partners and platforms must understand how to leverage the B2B value chain and customer journey. The core to a great B2B digital transformation is knowledge – amongst the client, partners, and platform companies.

Let’s use an example here around commercial decking, and illustrate by proxy how the sides compare:

• Building services companies act like the platform: they provide the means to procure lumber and authorize billing and delivery
• Designers act like the partners: they create tools to configure specific BOMs (Bills of Material) or offer unique plans for the size and style of a deck
• Contractors act like the clients: they know their core business value and what it takes to plan and execute a deck, and what happens on the job better than anyone

This last point is essential. It encapsulates the need for strategy and use cases. Why? Because the platform and partners are excellent, but no match for the years of direct experience that clients have. The platform companies and partners are there to assist clients as they digitize their own businesses.

Score: Tie for Platforms and Partners, Clients +1

Permanency

Permanency refers to the length of use. Our scores are based on how well each must support the client over time. Since installing a new digital commerce platform takes on average 9-12 months and the life cycle is typically 5-7 years, it is easy to see why a platform would “win” this match. The platform needs to withstand the business and personnel changes of multiple business cycles.

However, replacing partners too frequently can be detrimental to the lifetime value of the platform. An implementation partner gains a great deal of domain knowledge through the build. Their knowledge capital can be lost if they are replaced mid-life. It potentially means more time and money.

Still, given the necessary longevity of a platform within an organization, the edge goes to platforms.

Score: Platforms +1

Costs

The term “digital transformation” can conjure up notions of an 8-9 figure investment spending. In some cases, that’s appropriate for the size of the company and its digital strategy. And in truth, the biggest portion of the overall cost is usually attributed to the platform and renewable licenses.

Partners are essential for the potential cost-savings they can provide from the beginning to the end. Partners often look across many platform companies and can play the role of an objective or agnostic third party who can help guide a client through the selection process. While some platform companies are strategic in the upfront portion, partners tend to have more technical expertise through the entire scope of work. This is important when, deep into the project, the team finds complicated tech stack issues that weren’t anticipated. Because they are nimble with integrations, and costs, advantage goes to the partners. 

Score: Partners +1

The Tally: It's EVEN

There is never a perfect starting (or ending) point for a digital transformation. But prevailing wisdom indicates that the client should begin with clear objectives, a meaningful digital strategy and focused use cases. No matter how you add up the scores, the client always comes first.

When platforms AND partners are brought to the table simultaneously, though, there is a multiplier effect. Not only is the scope of work more focused, but both sides benefit from hearing a client’s directives together and clarifying them as a working team. When this happens early in the process, the multiplier effect is exponentially more valuable. 

When platform companies and partners are both seasoned B2B experts, they can provide potential cost-savings and recommendations on everything from new technical add-ons to organizational change management. For a digital transformation to be successful, all three legs of the stool (client, partners and platform companies) must be balanced and support each other.