From European competitor to strategic partner

This company was a leading manufacturer of distributed mini-computers and was transitioning into the becoming a player in the Systems Integration market.

One of its strategic manufacturing customers had just suffered the largest ever loss in corporate history, so announced a complete freeze in capital expenditure. Up till this time the computer manufacturer was earning $200,000 p.a. in Europe from sales to this customer via the customer’s own IT division, which was a leading global Systems Integration Company (SI) in its own right.

Unfortunately for the computer manufacturer, its move into the Systems Integration market was seen as a major competitive move by its customer’s SI division.

My role and challenge was to create a strategy to grow the computer company’s revenues with this SI, despite the senior management from both companies regarding the other as a competitor, especially in the manufacturing sector where both excelled.

I carried out a core competency analysis of both the computer company and the SI and produced a colour-coded map of each company’s skills and delivery capability within the manufacturing sector. Whilst both companies did indeed have SI capability, the SI company skills were predominantly at the applications integration level, whereas the computer manufacturer’s integration skills were at the shop-floor level, integrating cell controllers and robotics.

The manufacturer also built and supplied computer hardware and networking tools; the SI did not but did have excellent capability to manage the data centres and networks.

Whilst both companies had the capability to perform requirements analysis and solution design; this only accounted for less than 10% of the delivery requirement. The analysis showed a very clear cut division in skills and competencies for the remaining 90+% of a potential client’s needs.

On presenting this colour-coded skills analysis to both sets of management; it became very apparent that there would be great benefit in both companies working together as strategic partners rather than competing.

This new found spirit of co-operations resulted in the computer manufacturer growing its business with this SI from $200,000 p.a. to $42 million in just four years.