Shikko Nijland
Shikko Nijland | INNOPAY
Shikko Nijland

Cash is king. Long live collaborative partnerships!


Cash is king. In fact, the COVID-19 pandemic has shown that cash – and particularly how it is managed – tightens its grip on the throne during uncertain economic times. Collaborative partnerships enable businesses to save costs, especially those related to the budget-hungry development, maintenance and adoption of digital products and services. However, reaping the financial benefits of a collaborative partnership calls for the right strategic choices and the right capabilities. In this interview Shikko Nijland, CEO of INNOPAY, explains how businesses can achieve this.

The idea of collaborating in projects with partners who may also be competitors can seem counterintuitive. However, the digital transformation has made it imperative for organisations to adopt a more collaborative approach. This is the only way for them to retain their market relevance, reduce the TCO of projects, de-risk investments, drive consumer adoption and raise the barriers of entry for new competitors.

“It's certainly true that a more traditional, 'individual' track is sometimes the right strategy to pursue. But in the right circumstances, you can reap significant financial benefits from working in partnership with appropriate players in your ecosystem, particularly in the digital sphere,” says Shikko.

The benefits

"The collaborative approach reduces your investments 'by design', because you can spread them across multiple partners," explains Shikko. "This can be very significant for big-ticket topics like innovation, where you can either share the costs among the partners or you can get access to existing technologies which you would otherwise have had to build yourself.”

“Collaboration enables you to shorten your time to market compared with competitors. By teaming up with other players in your ecosystem, you minimise the risk of fragmentation, increase consumer satisfaction in the product, and decrease your market’s vulnerability to entry by the Big Techs. Adoption rates will be higher if you have multiple partners involved at launch, and the ensuing network effect will help your product to reach critical mass more quickly. Additionally, marketing investment costs can be shared across your ecosystem."

Shikko also anticipates a positive impact on operational costs: "By design, the collaborative approach should reduce the level of running and maintenance costs due to the higher adoption rates when other partners are involved, plus these costs can also be shared among the partners. Moreover, higher user numbers should also indicate a better rate of success for projects, meaning that the impact of ongoing operational costs are de-risked."

The right strategic choices

Champions of the collaborative approach may initially face resistance. Others may question whether the collaborative partnerships are too large, too complex and too difficult to control, or how the company itself can win if it is sharing the initiative with partners – especially if they are competitors. Shikko believes that the answers lie in learning how to make the right decisions, adopting the right mindset and starting at a scale which suits your organisation's maturity level.

"It's fair to say that collaboration can be more complex than taking the individual track, and in some areas like governance the costs might be increased. That's why it's important to make the right strategic choices and select the right projects in which the benefits outweigh the extra overhead.”

“Products or services that are at the end of their life cycle or in a fragmented market – which is increasingly common in the digital world – offer opportunities to save costs, and the best way to be successful is to collaborate. Other examples of favourable circumstances for collaboration include when government regulation means that an entire ecosystem has to comply with new laws or standards, or when it is important to keep new competitors out of the market (such as the EU’s creation of European data spaces).”

The right mindset and capabilities

“Apart from making the right strategic choices, you need to move away from a traditional 'zero sum game' mindset. Particularly in the digital environment, we can create more value by collaborating. Many organisations believe they are already doing this, but the scope of their collaboration tends to be restrictive. I'm talking about something deeper and more sustainable. You have to truly want to do it together. That means having to relinquish control to the collaborative partnership and having to deal with uncertainties. You must be prepared to adjust involved processes, products, services, people, etc. of your organisation, all based upon the outcome of the collaborative partnership. You also need to make people who have the right knowledge and expertise part of the collaborative partnership and give them a mandate.”

“For a lot of organisations that’s a bridge too far, which is why we recommend starting small, in a non-competitive domain such as a shared HR system. Alternatively, you could start collaborating with partners from adjacent sectors who have similar needs and are done with competitors.”

Start small and learn by doing

Shikko summarises: “It’s a common misconception that collaborative projects are large-scale and complex. We know from experience that this is not the case. Whilst it's true that possible benefits increase with larger network sizes, organisations are wise to start with smaller projects which are easier to manage, less complex, less risky and involve a limited number of partners. It's usually sensible to begin with a pilot and learn as you go.”

"The key thing is to develop the right capabilities so that you can make the right choices and then execute them effectively. But this cannot be achieved overnight. We advise organisations to begin with a three-step approach which will give them the tools to start making the right decisions,” continues Shikko, referring to the following three steps:

  1. Familiarisation with the unique aspects and benefits of co-creation
  2. Fit-gap analysis of current opportunities with collaborative approach
  3. Exploration of possibilities in a collaborative pilot-project

"If a collaborative project is set up and implemented properly, it will deliver significant benefits in terms of optimising investments and reducing costs,” he concludes.

If you are interested in attending a free-of-charge personal introduction session about Collaboration in which we go through the 3-step approach so you can identify potential financial benefits and make the right strategic choices related to collaboration, get in touch with us.

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