Small Is Mighty and Bigger Makes Things Better

I n the software industry, the next great innovation often emerges out of a darkened basement, dingy garage or disheveled dorm room. Momentous ideas arise from modest beginnings. The wunderkinds who write programming languages, develop operating systems and create wildly successful online games lack the infrastructure to scale upward — so they rely on larger, more established partners to sell their products widely.

These third parties or “channels” bring software innovations to market, forming the interdependencies that have incubated new ideas and propelled the industry forward for decades. In a business as disruptive as software, this model has remained surprisingly resilient. In fact, not only has it survived bubbles and bursts, but it has taken even deeper root in recent years.

Even bigger players who have the resources and scale to sell across markets leverage partners to extend their reach and the value they can deliver. Traditional service providers like Accenture, Deloitte, PwC and other consulting firms play a critical role in connecting their clients to the digital economy, carrying out enterprise-wide engagements ranging from resource planning and procurement to vendor oversight and customer relationship management.

Successful implementation of these cloud-based systems, often augmenting or replacing on-premise legacy platforms spread across multiple countries, requires a level of specialized expertise and sheer manpower that many software firms lack. By teaming up in the marketplace, software and consulting firms boost their competitive advantage and the value they create.

But with the advent of digital technologies, the channel partner model is evolving from merely a “sell my stuff and keep part of the revenue” relationship to “let’s collaborate to build new things that benefit our mutual customers.” And this is creating opportunities for new entrants to the partner ecosystem who are carving out a niche like app developers and integrators. Through open-source programming interfaces (APIs) and customer-specific extensions, these new partners do much more than sell software. They deliver innovation.

Thomson Reuters is perhaps best known as a mass media intelligence firm. But it also provides information and solutions that help companies manage global tax compliance. And it’s a partner to SAP. When SAP Ariba, the company’s business network, opened its platform two years ago, Thomson Reuters quickly signed on as a co-innovation partner and began using APIs to develop a new breed of digital solutions that companies connected to the Ariba Network can use seamlessly and in real-time to access dynamic, reliable, global tax content to manage global tax compliance.

The value in doing so? “Businesses are obligated to calculate, track, and remit taxes accurately when procuring goods and services as part of their day-to-day operations. Relying on vendor purchase orders, invoices or estimates is inadequate, and errors can put businesses into a penalty condition,” explains Chris Carlstead, managing director, Indirect Tax, Thomson Reuters. “By partnering with SAP Ariba to develop and deliver these new solutions, we can make tax simple for our customers as well as for all businesses that are part of the world’s largest ecosystem of buyers and sellers.”

Vertex, Inc., another leading provider of tax technology solutions and long-time SAP partner, went down a similar path a year ago, partnering with SAP Ariba to bring its solutions to the network via APIs. “As businesses strive to manage the impact of digital transformation and increased tax complexity, it just made sense as we can now help millions of companies simplify the tax calculation process and enable tax experts to provide more strategic value to their organizations,” says Paul Beirnes, managing director of partner development at Vertex.

It’s been said that “two heads are better than one.” And ecosystems are, pun intended, living, breathing proof. There’s strength in numbers and, even more importantly, innovation and value. As part of the right ecosystem, you can unleash value and profit from it. Find yours today and feed your growth.