It is evident. Maturity of a tech collaboration has significantly risen. Now, organizations look beyond just current year cash flows. They are looking 3-5 years from now. And the belief in a union of equals has emerged. Earlier, ‘big fish eat small fish’ was the thinking making organizations work as silos of expertise. In my personal opinion, there is a massive consolidation of strengths underway. More and more organizations are becoming cognizant of their strengths and accepting of their weaknesses. ‘Collaboration’ (which is being used as a buzzword for achieving impact internally) will be the buzz word of the next 7 years as organizations become more open, learn to work better and grow together faster than they individually could have.

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Leveraging the power of collaboration for a technology company
Tracing back to the advent of collaboration
From the year 2000, a massive shift occurred
quietly to most, but daringly to a few. A few large
organizations saw the change that was
occurring. In 2007, when I was consulting with a
large $Bn technology bellwether from my alma
mater, I remember how this disruption, so new
and so unique, was being viewed as the single
largest transformation in the industry way
before most of the world heard of this
disruption. This arrived with the perfect storm
co-created by cloud system deployment
capabilities and the penetration of high speed
internet. With these forces aligned, it created
the SaaS disruption. It took 10 years though for
its proliferation to be the product of choice for
all industries. It uniquely positioned itself to
productise systems and frameworks and create
workflow environments which were hitherto
accessible only to the big companies at a fraction
of the expense. It did something else which was
more succinct though. Now companies were
suddenly getting familiar with having open
systems and integrations and allowing outsiders
in – a fundamental shift in thinking which has
changed everything.

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How has this affected collaboration though?
A precondition to any collaboration is an open
mind. Where one can freely discuss synergies
than be worried about theft of intellectual
property by sheer discussion itself. With an open
system environment, companies began to see
how great technology could be accessed by
everyone for a fraction of the cost, establishing
that letting someone in can save money. Now
organizations needed a nudge to say that
collaborations can add business value. In 2009, I
remember how an acquisition by another big
bellwether of a small technology outfit in Europe
was of strategic importance to them. Making less
than 1% of their own top-line, this large
technology company was ready to take the
plunge of letting in a small team of engineers join
them rather than do what might come to them
easier – build their own team. A surprising move,
but it gave them access to a downward
integration possibility which could get them into
market 3 years sooner and maybe worth billions
in years to come.
Why would a tech company have this internal conversation though?
To understand how this conversation has moved, we need to understand the 3 phases of growing
maturity:
Phase 1 | Pre-2000 Phase 2 | 2000-2010 Phase 3 | 2010-2016
> Improve performance
Banking on economies of
scale to be able to provide
better profitability by
operational synergies and
far lesser redundancies.
> Consolidate and remove
excess capacity
Use the combined
workforce and bring down
bench strength and increase
utilization by looking at
leaner teams of support.
> Provide market access
Use relationships and
delivery capabilities to
enter a segment or market
where the other may have
significant leverage or
reduce time to market.
> Provide a new product/
service
Utilisation of the other
organization’s technology
so that they would be able
to use the same
relationships.
> Solve a current challenge
Use something that has
been perfected/ done
better by another
organization to be able to
apply the shared learnings
in its own company.
> Complete a cycle Use the
other organization’s
offerings to be able to solve
problems at a vertical level
above or below and
become a ‘one-stop’
solution.

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Phase 4 | TODAY
> Create new offerings
Leverage the potential of both organization’s offerings to be able to create a new product that will
solve a problem in another industry altogether. In early 2017, we advised a logistics company and
facilitated introductions to another block-chain implementation client of ours. Together, they
developed a POC (which we advised on) in the supply-chain logistics space which on deployment
would make the company one of the first in the country with capabilities to provide a future-ready
block-chain solution positioning it at the cutting edge of similar solution providers in the country. For
the block-chain company, they now had a product to resell and a test case in one of the largest
industries for block-chain disruption.
> Expand horizontally
Leverage a product’s offerings to be able to expand into new geographies. When we advised a mid-
size tech company on a potential collaboration, we felt the possibility of being on the delivery side of
the solution and having their share of the pie. While the move was inorganic, it also meant that the
company was on the winning side of a massively expanding foodtech industry. This collaboration
resulted in a large transition of the rewards of the technology they were building.
> Transform organization completely
Work together to completely transform the offerings to a new paradigm. We advised a company in
mid-2016 to be able to fill up their idle capacity. While one of the collaborators had approached us
for a sale of his business, the collaboration was able to lift up both their margins while reducing the
costs of them operating individually. After the addition of few new key management personnel, the
business had reached stability which allowed it to fetch a 2x improvement in valuation in under a year.

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Is this the next big thing then?
It is evident. Maturity of a tech collaboration has significantly risen. Now, organizations look beyond just
current year cash flows. They are looking 3-5 years from now. And the belief in a union of equals has
emerged. Earlier, ‘big fish eat small fish’ was the thinking making organizations work as silos of expertise.
In my personal opinion, there is a massive consolidation of strengths underway. More and more
organizations are becoming cognizant of their strengths and accepting of their weaknesses.
‘Collaboration’ (which is being used as a buzzword for achieving impact internally) will be the buzz word
of the next 7 years as organizations become more open, learn to work better and grow together faster
than they individually could have.
Original publish date: Sep 18, 2017
Author: Pradyumna Nag
The author is a seasoned finance professional with equal parts experience in Finance, International
Business, Management & Strategy.
He can be contacted on nag[at]prequate.in.
Disclaimer: This paper is a property and copyright of Prequate™. No reader should act solely on the basis
of any statement contained herein without seeking adequate professional advice. The authors and the
company expressly disclaim all and any liability to any person who has read this paper, or otherwise, in
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