July 3, 2017

How to harness the huge power of ecosystems

Jan Kyncl

Jan Kyncl, Tieto

Companies, partners, customers, inventors, research companies and many others – they all make up what we in IT refer to as an “ecosystem”. Tieto’s definition is as follows: “An ecosystem is a group of companies together creating value to customers through developing and aggregating repeatable solutions. Tieto both builds and orchestrates ecosystems, as well as engages in existing ecosystems orchestrated by others.”

The more people that are involved in mutual cooperation, the greater the potential for achieving excellent results. The same is also true for companies. The more companies share the same vision and the more they work collaboratively towards a common goal, the better the outcome will be. But why is this?

  • It is more logical to cooperate than to waste productive energy in pointless completion.
  • Each company (or part of the ecosystem) is stronger in some areas than in others. Why spend time and energy on things that someone else is already better at?
  • The synergy effect applies here as well. Companies that work in collaboration can achieve more together than they can individually.

Cooperation leads to co-creation

Within an ecosystem, you can not only cooperate but also co-innovate: co-create some new product with other ecosystem members, or modify the current product to better serve customer needs. As the IT sector is developing at lightning pace, it seems that the only viable alternative for most of the companies is to join different ecosystems - this maintains the high speed of IT development. Our customers can also gain huge benefits by participating in an ecosystem. Ecosystems can strengthen Tieto’s position, helping us to be more competitive and, together with other companies, giving us a bigger share of the market.

In 2016 I actively handled an internal Tieto project. This was an analysis and investigation of Tieto´s capability to boost the solutions offered by effective use of ecosystems. Our qualitative study was done in four countries (Finland, Sweden, Czech Republic, India). With online research/investigation, and through several interviews with Tieto employees and third parties, we discovered that:

  • The term ‘ecosystem’ is understood in different ways by different people
  • There is more focus on cooperation than on co-innovation in the ecosystems
  • The role of each company in the ecosystem is not usually clarified in advance
  •  The goals of each company are usually not aligned to a common ecosystem goal(s)
  • Interaction in ecosystems is based on agile methodology and on a freedom to contribute. On the one hand this can offer greater efficiency, but on the other hand it can be hard to measure the progress or success of the co-innovation or cooperation.
  • Usually there is lots of interaction happening in ecosystems but without a clear direction and follow-up
  • Many people still think in silos – seeing just their own box/area; involving other teams from Tieto or even another company is often simply not considered
  • The ecosystem group is not revised or updated as much as it should be – is there a company missing? Are some companies already redundant?

Thriving ecosystems equal thriving companies

Based on our project results, we came up with a few proposals on how to boost ecosystem activity:

  • Agree beforehand upon a clear vision/goal for what should be achieved within the ecosystem
  • Involve only companies which are open, transparent, trustful, cooperative, innovative, and have the time for such activity
  •  Informal facilitation and some governance could be beneficial
  •  Analyze regularly which companies should be part of certain ecosystem activities (involve new players, get rid of the old ones which are no longer bringing added value)
  •  Split the roles between each company
  • Clarify in advance who will hold intellectual property rights (IPR) for a new product, and define which market each company would like to focus on
  • You can measure the success via
    -  New scalable solutions to the market
    -  End customer/user satisfaction
    -  Amount of failures
    -  By business value for the end consumers

 Time to unleash the full potential

Tieto is striving to show the direction for other IT companies, and our use of ecosystems is central to this pioneering spirit. We’re perfectly placed to utilize our project findings and integrate these with ecosystems interactions.

By unleashing the full potential of ecosystems, we can make our jobs easier, our achievements even greater, and our focus on customers’ business needs stronger than ever before.

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